Can Publishers Make E-Tail Pay? | Adweek
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Can Publishers Make E-Tail Pay?

To succeed, print brands need to take risks

In an age where print media is trailing digital growth but display ads still aren’t pulling their weight, publishers are looking to e-commerce to drum up some extra revenue.

But while plenty of media companies are making an effort—whether it’s Harper’s Bazaar launching e-boutique ShopBAZAAR last fall, Better Homes and Gardens’ new shopping channel or Lucky recently restructuring its executive team to focus on digital commerce—many are still struggling to find a profitable model. Veterans of the space say it’s a lot harder than it looks.

One fatal flaw of many media-driven e-commerce sites is that they lack a merchandising strategy as meticulous as their editorial strategy, said Ben Lerer, the co-founder of Thrillist, which bought men’s flash sale site JackThreads three years ago. “Understanding editorial and merchandising curation is not the same,” he said. “Most of these media companies don’t have a single merchandiser in the building.”

That’s why rather than starting a commerce arm of Thrillist from scratch, Lerer decided to acquire JackThreads. (Lerer said he made the decision after seeing the enormity of the JackThreads warehouse operation.) Since integrating JackThreads in 2010, Thrillist Media’s revenue has risen from $14.6 million to between $50 million and $60 million for 2012, Lerer estimated, with about 75 percent coming from commerce.

Another major difficulty in combining e-commerce with content is getting consumers to transition from browsing to buying, said Tyler Thoreson, vp of men’s editorial, creative and customer experience at Gilt Groupe. “You need to remember what the reader came there for and what’s their headspace,” said Thoreson. “From my experience, I’m not 100 percent convinced that it’s all that easy to turn a reader into a customer.”

While Gilt is the leader in the flash sale category, having been one of the first sites to bridge the content/commerce divide by hiring established editorial talent like Thoreson (a GQ vet) and former Gourmet editor Ruth Reichl, even it has struggled to become profitable. Take into account that many magazines only recently managed to create a substantial digital presence, and expecting them to compete on the level of seasoned e-tailers becomes even more far-fetched.

So, whether any publisher will manage to create a full e-commerce experience, from inventory to customer service, is still up in the air. As it becomes harder for media companies bringing in millions of unique visitors every month to make a profit from display ads, however, they may eventually be forced to start thinking more unconventionally.

“Right now it’s a waiting game,” said Lerer. “A lot of people are taking really small steps in commerce, doing everything through partnerships, and not buying or holding inventory. Without the risk, it’s really hard to get the reward.”

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