October 19, 2015
In a recent Forrester-Shop.org study, we found that 70% of online retailers are investing in “content” in the coming year. What sort of content you may ask. Usually when they say “content” retailers mean videos, blog posts and magazine-like content that is best for consumers at the top of the shopping funnel. This type of content though is notoriously difficult to monetize though. A number of companies like Babycenter in the late 1990s were the first wave of content-driving-commerce digital players to try this. They quickly realized it was not only difficult to do but that top-of-the-funnel content was easier monetized through advertising.
But we’re in a different era now and that’s kicked up the possibility of new success from content. We now have ubiquitous mobile devices with web connectivity, social networks like Pinterest and Instagram that thrive on content, and the disruption of the entire content industry (RIP, Lucky Magazine which was one of the hottest media properties in 1999).
But are things really that different now? For all its attempts to drive commerce, even fashion darling Refinery29 could never make shopping happen. One of the more recent torchbearers of content-commerce synergies, Thrillist-JackThreads, decided the businesses are better split apart than together.
While few content-driving-commerce successes exist, the idea isn’t impossible. As I’ve studied the topic, I ran across four companies that have interesting approaches to content and commerce and have some viable early sales to show for their efforts too:
- Net-A-Porter. Net-A-Porter is the London-based pureplay high fashion site that sells the likes of Jimmy Choo and Balenciaga. In 2014, it introduced a glossy fashion magazine with editorial features, and more importantly pretty photos of items sold on the site. Consumers, many of whom are already Net-A-Porter shoppers, pay to receive the magazine (it’s reported about 40k subscribers do so) and many of them end up spending more time (up to 2 hours with the magazine) and money on the site (125% more) after they subscribe.
Lesson: This is essentially a catalog disguised as a magazine, but the ends justify the means. Everyone knows a catalog to your house file is one of the best investments any merchant can make. Additionally, much of the endeavor likely pays for itself because brands buy advertising while the content makes the “catalog” irresistible to shoppers. Without more subscribers, it may not be around for the long-haul but if it’s even break-even which we suspect it is, it is a worthwhile experiment.
- Dollar Shave Club. In 2012, Michael Dubin took YouTube by storm with a commercial that essentially broke many of advertising’s rules. It was way more than 30 seconds and it starred himself (admittedly, he’s a stand-up comedian) and a bunch of his employees. Yet, it’s received more than 20MM views since the release and that video alone launched a company that is now estimated by industry insiders to have 10% of the men’s razor market. Other YouTube sensations have also taken pages from the same playbook (eg PooPurri, Blendtec) .
Lesson: Drop dead brilliant content (commercials are a great format) can drive awareness and trial of fringe products. But that content is hard for even the brightest minds to replicate. Nothing for instance Dollar Shave Club has released since has been as well-received as its initial commercial.
- Thirstie. Thirstie is a smart new player in the eCommerce space. It’s a site and an on-demand app that is essentially a marketplace for fast, local alcohol delivery. Think Seamless Grubhub but for craft booze. One of the challenges in the alcohol space though is that it’s highly regulated and traditional advertising has a number of restrictions. So the Thirstie team created content in an editorial property called The Craft. Does it work? You bet. They say they see 80 percent of Thirstie’s users coming through The Craft with close to a 20 percent conversion rate. The Craft is also are able to keep content costs down by working with freelance writers in-between bigger gigs.
Lesson: Content can be a more lucrative customer acquisition tool when traditional marketing tactics can’t or don’t work. Even better, if you can integrate lovely photography, social networks like Instagram can be helpful customer acquisition tools. For companies in the early stages of business, this can be powerful. The mattress company Caspar launched a similar venture called Van Winkle’s with similar goals and objectives. I suspect that JackThreads grew to the point that dynamic mass digital media (eg paid search, retargeting) is now more effective and cheaper than editorial content.
- Ricardo Media. Few Americans have heard of Ricardo Larrivee, but in Quebec he’s known as the French-Canadian Martha Stewart. A charismatic chef with a TV show and a magazine, he’s also got a popular website with cooking videos. And of course he sells cooking utensils and wine. Nearly a million units of his branded products have sold over the years (primarily offline), an impressive amount given that his target population is really the 8MM citizens of Quebec. Disney and the Food Network have found similar (and bigger) success with a licensed merchandise formula too over the years.
Lesson: Popular personalities or properties can drive commerce through licensed merchandise if the products being sold are relevant to shoppers.
While companies continue to explore the interplay between content and commerce, we expect to see pockets of success like the ones above. Heed the lessons from the few success cases that do exist and see if they apply to other businesses as well. For other similar businesses to these above, content as a commerce-driver isn’t easy, but can be a viable strategy.