Will Ecommerce Drive Big Revenue for Publishers?
Consumer magazine publishers have fallen in love with ecommerce this month. At the beginning of October, Rodale announced the launch of its new ecommerce site Rodale Wellness. The site sells healthy lifestyle books and DVDs and combines that experience with content from Rodale News. Last week Time Inc’s People also launched a branded ecommerce platform, called People Shop. The store displays products picked by People editors and inspired by celebrities. And yesterday Hearst announced that it will be following suit with its new site BestProducts.com.
BestProducts.com, like the People Shop, is a collection of recommended products, curated by Hearst editors. Products span a variety of verticals, including beauty, food and drink, gadgets, and home, reports Digiday. Hearst editors will write product evaluations and share consumer feedback on the site. “It’s certainly an audience-first play as opposed to an editor-first play,” said Troy Young, Hearst’s president of digital, to Digiday, explaining why BestProducts.com will stand apart from Hearst’s other publications. “When you are singular in your mission, you get a better product.” BestProducts.com is expected to launch some time this week.
Despite the potential for revenue gains, ecommerce is not without its challenges. Refinery29, one of the first publishers to invest significantly in native ecommerce, dialed back its ecommerce efforts in 2014. Co-CEO Philippe von Borries told Pando that, “It took us a couple of years to come to the conclusion that we could provide a better resource to users by focusing on discovery ... versus getting caught up in the native transaction.” Additionally Borries anticipated 25 percent of Refinery29’s revenue would be driven by ecommerce. In reality, it only attributed to 5 percent of revenue.
Where Refinery29 struggled, handling inventory, transactions, and shipping, perhaps Hearst and Time Inc. can succeed. Experience in managing subscription transactions and magazine distribution may benefit these legacy publishers when it comes to running the back end of ecommerce.
And in terms of revenue, a few publishers have cracked the ecommerce code. Thrillist for example, drove over 80% of its revenue from retail in 2014. It credits much of that success to the acquisition of online clothing store JackThreads. F+W too has made heavy bets on ecommerce and expects over $65 million in ecommerce revenue in 2015. It will be interesting to see if publishers with broader consumer audiences like Time Inc. and Hearst can engage its readers as deeply and drive conversions.