After Growing Commerce Sales by 67% Last Year, BuzzFeed Eyes a ‘Digital Shopping Mall’

BuzzFeed wants to think more like a retailer. Judging that the surge in online shopping is here to stay—even as stay-at-home orders ease—the site is investing in creating a more proactive, intent-based shopping experience. "The rationale is we know we drive a significant amount of demand through content, we have no intention of stopping that model, we want to close that loop and have people come back to BuzzFeed to shop by creating some sort of digital shopping mall,” said Nilla Ali, BuzzFeed svp of commerce. The venture-backed publisher has long had a strong content and commerce operation, but last year’s pandemic fueled online shopping bonanza led to an increase in total gross sales of more than 67%. In 2020, BuzzFeed's thousands of shopping articles garnered around 900 million views and drove over $500 million in gross merchandise value. In 2019, BuzzFeed’s commerce business generated more than $40 million in revenue, according to a memo CEO Jonah Peretti published in January 2020. “What is the digital version of window shopping?," Ali asked in an interview with Adweek. "No retailer does that so well. A lot of people love to shop for joy, that’s hard to quantify. We're thinking about how to create an environment conducive to that." BuzzFeed is far from alone The pandemic spurred a standout year for online shopping across the board. Rakuten Advertising, one of BuzzFeed’s affiliate retail partners, saw traffic across content publishers in its affiliate network jump 73% year-on-year from November 2019 to November 2020. This has prompted other publishers to turn their commerce operations into full-blown marketplaces. Among them, the Complex Shop, which launched in 2019 and Leaf Group’s Well + Good wellness shop. While this helps drive direct connections, some skills are beyond the average publishers' repertoire. “The big change is that publishers used to think, ‘If I put shopping as a tab on my site, people will go there,’” said Rob Ristagno, CEO of consultancy The Sterling Woods Group. “They have learned it’s not a build-it-and-they-will-come scenario. You need to hire or acquire commerce and technology experts. Run as a commerce shop with deeper integration makes sense.” I’m very bullish on shopping via video.Nilla Ali, Buzzfeed Details are slim but Ali said the marketplace will arrive midway through this year, bringing with it significant site changes. At a high-level, shoppers will be able to search BuzzFeed's catalog of more than 10,000 posts, browse its shopping content by category and shop directly from BuzzFeed.com using its native on-site checkout. Recommendations, videos and user-generated reviews will play a role and shoppers can save and share their shopping experience. Currently, BuzzFeed’s commerce content tends to focus on deals and affordable items across a number of categories, it also packages up guides for bigger-ticket items. Already, that's a welcome change. "Publishers' commerce strategies will get interesting when they can integrate the checkout experience into their platforms," said Jonathan Lewis-Jones, md of Publicis Commerce. This means providing "digital buying experiences more akin to shopping in the real world, seamless options to buy when browsing, peer-to-peer sharing mechanics and payment integrations." The marketplace will also lead to more ad units. As publishers flex their first-party data capabilities and fold them into their commerce offer, Ali added, the signals they can share with retailers to tailor shopping experiences in digital and physical stores will become more of a competitive advantage. The current affiliate model is broken In order to think more like a retailer, BuzzFeed is laser-focused on improving conversion, which has been steadily climbing for years thanks to making iterative tech tweaks. The efficiency of its affiliate program—calculated through conversions, click-through rates and average order value—has grown by more than 40% over three years. BuzzFeed wouldn’t say how many people are on its commerce tech team, who are stakeholders in its growth, Ali said. “I am obsessive about the idea that the affiliate model is broken for users,” she said, pointing to wrinkles like toggling between the publisher and retailer site, shopping for multiple items and comparing prices across products. To meet some of these demands, BuzzFeed introduced a Wishlist feature last year so registered readers can save products to purchase later. Confirming BuzzFeed's suspicions, internal research across over 2,000 shoppers found 52% of people use content as a guide to making purchases. Where the audience interest grows—like home improvements, pets, working from home and athleisure—BuzzFeed scales up the commerce content it creates. Over the year, the team limbered up to react at speed to the shifting pandemic-enduced trends, whether that was broken supply chains, plummeting affiliate fees and peaks in shopper demand. Content managers can read on-site signals in content consumption and what products are selling in near real-time, rather than relying on outdated historical data. The size of the pie has increased BuzzFeed works with more than 1,000 retail partners including with Walmart and Amazon. These partnerships range from simply plugging products into BuzzFeed’s affiliate engine, to deeper relationships leading to co-create products, like its partnership with sexual wellness brand Bellesa and McCormick co-branded spices. As retailer relationships evolve, they "should no longer be evaluated based on clicks and affiliate revenue but rather evaluated on the strength of the consumer buying experience" as well as revenue, added Lewis-Jones. As the pandemic recedes, new categories will open up. As such, Nilla is not expecting a drop in growth. Publishers and platforms are primed for commerce innovations in 2021, spurred by video. TikTok, Amazon Live Instagram Live and Facebook Live are all gearing up to better facilitate sales. “I’m very bullish on shopping via video, [but] there are limitations in making it frictionless," said Ali. "We’re doubling down on video formats and how can you drive impulse purpose, that ladders into live shopping. We’re closely watching this.” Read More: Ecommerce Was By Far the Biggest Retail Trend of 2020