Online commerce shops aren’t turning out to be the golden ticket to revenue diversification that some publishers were expecting. But the media companies that are still operating storefronts on their owned-and-operated sites are not trying to compete with the Amazon model of having everything for every reader.
The shops launched by BDG and Group Nine (now a part of Vox Media), for example, were not runaway hits with shoppers as intended, and Group Nine has shifted focus entirely away from the mobile shopping platform it launched at the end of 2020. Hearst and Hodinkee, on the other hand, have found success by leaning into editorial expertise to create products that both feel authentic to their identity, but also by creating content that will make products go viral within their respective audiences.
Out of necessity, a wave of people started shopping online during the pandemic when stores were closed or too risky to venture into, increasing the likelihood that they would be in the mindset to make a purchase while browsing online. Some publishers, noting an increase in commissioned revenue from affiliate links, of course wanted to increase their share of the market and invested in building owned-and-operated online storefronts and marketplaces.
But two-and-a-half years later, people are back to shopping comfortably in person, eliminating the need for as many online shopping outlets. This poses a problem for the publisher shops that don’t feature exclusive products, discounts or added bonuses to entice readers to purchase items through their specific platforms.
Take BuzzFeed, for example, which redesigned and relaunched its shopping tab on its website mid-2021 in order to give readers a single location to browse all of its affiliate content by product type, brand name or editorial shopping guide. Everything from workout gear to makeup to sex toys are available to purchase through affiliate links. Despite investing in this user shopping experience, the media company still reported that its commerce revenue was down by 22% from Q2 2021 (right after the relaunch) to Q2 2022.
But BuzzFeed was not alone in launching online commerce shops and marketplaces. A slew of digital publishers, including the aforementioned BDG and Group Nine, also created shopping destinations aimed at being “frictionless” and easy to use in discovering products.
The intent problem
In April 2021, BDG launched its onsite commerce initiative called BDG Shops, first on Bustle.com and later on The Zoe Report’s and W Magazine’s respective sites.
The Shops were widgets placed within the article pages of editorial content and either recommended retailers’ products related to the story’s content or other items that may be of interest to readers. As audiences read, they were given the ability to build a cart of products from several brands and retailers and ultimately check out once, all without leaving BDG’s sites.
The retailers featured in the Shops – including Hampden Clothing, Showfields, Linda Farrow and E.LF. Cosmetics – were all signed up directly by BDG, who was looking to give its advertisers more transaction-based campaign opportunities.
“We’re being held to different KPIs around conversion [by advertisers,] and we’ve done lots of experiments. Most haven’t worked, some have,” said Jason Wagenheim, CRO and president of BDG, who added that these commerce shops ultimately ended up being the biggest of those experiments that didn’t work. “While we’ve driven a lot of pageviews, and a lot of clicks on product cards, we’re not driving as many conversions as we forecasted.”
BDG declined to share conversion rates and number of transactions driven through the Shops on Bustle, W Mag and The Zoe Report over the past two years, however the Shops are still up on the sites, according to a spokesperson.
“God knows we’ve given it the old college try but there are barriers to getting consumers around the mindset that our sites are a place you can actually transact,” said Wagenheim.
Part of the blame goes to the types of brands that were signed up, including small- to mid-sized retailers, as well as exorbitant shipping fees, taxes and duties for international brands, and the shipping time it took to actually get the products in readers’ hands, he said.
Despite the Shops not driving the desired number of transactions, affiliate content is still a promising area, according to Wagenheim, but it relies on distributing those editorial and branded stories across several platforms to get enough awareness from readers. Ultimately, the bulk of conversions are still happening directly on the retailers’ sites, he said.
Swipe.Shop was Group Nine’s attempt at creating a mobile-first shopping platform right ahead of the 2020 holiday season that was supposed to replicate the swiping-based motion made familiar by apps like Instagram, TikTok and even Tinder. The marketplace was monetized through sponsored placements or through affiliate links, but less than two years later – and after an acquisition by Vox Media – a spokesperson for the company said the team has “shifted focus from Swipe.Shop to other performance and commerce related offerings like VM Connect and the Cut Shop.”
The mobile shopping platform still functions as a website, but the most recent posts are from the end of 2021.
Social media platforms are also scaling back their commerce experimentations, with bad user experience as the scapegoat. Meta shut down Instagram’s affiliate commerce program in August, and next month, it will be shutting down Facebook’s live commerce shopping program. Meanwhile, The Financial Times reported that TikTok was abandoning its plans to expand its commerce business in the U.S. and Europe.
The evolution of content and commerce
Not all publishers are failing at getting readers to complete a purchase on their site, but with trial and error comes the need for offering a reason to buy an item that another platform cannot offer.
For watch enthusiast publisher Hodinkee, the next step beyond writing about timepieces and giving readers a platform to talk about their collections was actually the watches and accessories themselves. In 2016, the 8-year-old publication launched its shop, and in 2021, it decided to acquire a company that specialized in reselling pre-owned watches, Crown & Caliber.
By the end of last year, Crown & Caliber sold 35,000 watches, doubling the number of transactions Hodinkee Shop earned on its own for a total of about 70,000 sales, according to the company. The company’s total revenue reached $100 million last year.
??“I’d rather have a beautifully curated business in a niche industry than everything for everyone,” said CEO Jeffery Fowler.
For publishers that aren’t quite as niche as Hodkinee, creating virality around products using content is crucial.
Hearst is on track to hit 500,000 transactions this year across its 20-plus brands shops, and the average conversion rate across all of the Hearst Shops is about 30-50% higher than the industry average of 2.5-3%, according to Sheel Shah, svp of consumer products and partnerships.
While all of the brands in the company’s portfolio have a shop, the priority has been developing Hearst’s service brands (the ones focused on hobbies), including Men’s and Women’s Health, Prevention, Delish and Good Housekeeping, as well as on Oprah Daily.
These shops are not only an extension of the brands’ preexisting affiliate commerce businesses, but they also provide an opportunity to expand the catalog of direct-to-consumer branded products and licensed merchandise that Hearst has been developing for its brands for several years, like Cosmopolitan’s wine and perfume and Oprah Daily’s The Life You Want planner.
Even with the exclusive DTC products manufactured or licensed by Hearst, Shah said it’s not going to be guaranteed success. “You do have to take a bunch of swings at the plate before you find yourselves super successful on every SKU, and it might take a lifestyle media [brand] 10 SKUs before you have a runaway hit,” he said. “You have to have that magical moment where that piece of content really takes off and then that product rides that viral success.”
To achieve that virality with Oprah’s planner, Shah said members of Oprah Daily are also given access to monthly group journaling sessions with Oprah Winfrey over Zoom.
Affiliate products are only added to shops to fill in the gaps that Hearst’s branded products don’t fulfill, such as Truff hot sauce on the Oprah Daily Shop. As one of her favorite condiments, it makes sense to carry, despite not being manufactured by Hearst or branded with Oprah’s name, said Shah.
“You want to be strategic about the merchandising of affiliate products in your own shops. There are certain products that we’re not going to develop in-house and because we don’t have those products, the customer will most likely leave our world,” said Shah. “We don’t want that behavior, what can we do to help serve that customer? It’s more [about] working backwards.”