3 e-commerce success stories
[Updated with Techdirt comment.]
Despite an uncertain economy, e-commerce continues to grow. U.S. retail e-commerce sales surpassed $43 billion in the second quarter, up 15 percent year over year – the 11th consecutive quarter of year-over-year growth, according to comScore.
It’s time for more publishers to reach for a piece of this pie. E-commerce represents a natural extension of an editorial product and gives publishers another way to engage with – and monetize – their communities. comScore said digital content and subscriptions were among the top-performing online product categories in Q2.
A handful of media companies are already in the game, having built or acquired e-commerce businesses. Here are three that are making some noise with recent efforts.
F+W Media has been one of the more aggressive companies integrating publishing and commerce. The company operates more than 20 online stores in a variety of enthusiast categories, from and its e-commerce revenues have
doubled increased 83% over the past year. E-commerce is F+W's fastest-growing business and now accounts for a double-digit share of F+W's total revenue.
In July, F+W acquired Aspire Media, parent company of Interweave, which also has a robust e-commerce business in arts and crafts, with more than 350 craft books and other products that it sells through 10 online stores.
The company also hired Lucas Hilbert, a former Amazon senior product manager, to run its e-commerce business, further underscoring the division’s growing importance. Hilbert, whose title is VP of e-commerce, joined F+W on Aug. 6.
In a phone interview, Hilbert said his work at Amazon gave him a perspective across five key areas of e-commerce: customer service, operations, technical systems, online merchandising and marketing.
“It’s really important not just to have a website that takes orders, but to meet and exceed expectations in customer service and fulfillment,” he said. “That’s what makes an optimal experience.”
Another key element is the editorial content that turns a shopping site into a destination site – a competency that gives publishers an important edge against pure-play online retailers.
“Editorial curation and the opportunity to shop and buy online should be a single destination," said Hilbert. "We want to be first in line to provide that integration for our enthusiast communities.”
Thrillist Media Group
Thrillist began as a newsletter targeted at young, urban males before jumping into e-commerce with the 2010 acquisition of JackThreads. The company announced last week that it has secured a $13 million round of Series A funding, which it plans to use to explore media acquisitions while expanding its commerce and mobile offerings.
Founder Ben Lerer told AllThingsD’s Peter Kafka that the company is on track to take in $60 million in revenue this year (and be profitable), with about 65 percent of those revenues from JackThreads.
The company has “big plans for evolving the Thrillist experience on the web, as well as on mobile and in video,” cofounder Adam Rich told paidContent. “We also have significant aspirations to continue developing JackThreads into a lifestyle destination that doesn’t just sell products, but also perpetuates a lifestyle that we know our guys covet.”
Techdirt last week launched a new Insider Shop that entices buyers into its online store by connecting commerce with exclusive member perks. From its “Perks & Features” page:
Almost every purchase in the Insider Shop includes special members-only features that you can activate on your Techdirt account. There’s also a whole category of blog perks that you can purchase in various subscription and one-time packages.
For example, visitors who purchase an item receive in Insider Badge, a vanity icon that appears on Techdirt user profile pages and comments. A Crystal Ball feature – available only with certain purchases – provides exclusive access to unpublished blog posts.
The Insider Shop is an upgraded version of the "CwF+RtB" store Techdirt launched in 2009 as an “experiment” that generated $50,000 in sales the first year. “Since then, it's always been on the list of things to do to update the store in a big way, and a few months ago, we finally decided to focus in on it,” Techdirt editor Mike Masnick wrote in a blog post announcing the Insider Shop.
In addition to merchandise, visitors can buy member services directly. Crystal Ball access, for example, costs $15 a year. (It also has two “anti-Techdirt” offers: buyers can shut down the site for a day for $1 million or shut it down permanently for $100,000,001.)
Masnick considers the shop more of an add-on than a significant new business stream - at least at this early stage. "It's very much an experiment to learn from," he wrote in an email response to my questions about the store. "In the grand scheme of things, we're still a relatively small site. So we'd have to grow much larger to make this 'significant.'"
Masnick said his team does have some ideas for growing the store - which they'll have to prioritize around their day jobs of actually running the site. "But, for now, we're certainly not relying on it or even expecting the revenue to really matter for the company," he wrote.
What do these three publishers have in common? They’ve all invested in building super-niche, loyal communities who trust the brand and therefore are willing to buy merchandise from it. Techdirt even created a formula for the model: CwF+RtB, which translates to "Connect with Fans and give them a Reason to Buy." It’s a strategy that more publishers would be wise to emulate.