Today’s digital publisher needs a variety of revenue streams. For many, though advertising remains a monetization pillar, it has been in a steady decline. Subscriptions or memberships are also generally a strong monetization strategy. But as the need to diversify revenue methods continues to grow, many publishers are looking at new strategies — such as e-commerce.
Justin Choi, founder and CEO of Nativo, says that commerce companies are the publishers of the future. “A new breed of publishers is emerging to challenge traditional open web publishers for ad dollars: commerce companies,” he writes at Exchange Wire. “Commerce companies already have a leg-up on traditional open web publishers when it comes to their first-party data and user relationships. Their delayed entrance into the ad game will also prove fortuitous, as they are not dependent on ad-tech incumbents and will be able to take a clean slate and can employ the lessons of their predecessors when it comes to integrating ads into their user experiences.”
Those that have dabbled in e-commerce or already have it firmly in place are considering new ways to increase its revenue production, while others are looking to add the strategy to their overall revenue stream. For many digital publishers, e-commerce could become a key part of those emerging strategies.
The growth of the e-commerce model
Across platforms as a whole, e-commerce is a growing trend worldwide. In the United States, it grew by 15% in 2018, becoming a more than USD$515 billion market. The largest and fastest-growing e-commerce market, however, is China, which saw nearly USD$2 trillion in sales in 2019. India and Indonesia are also fast-growing markets.
Global e-commerce is up 18% year-over-year, with 2019 sales of nearly $3.5 trillion*. This accounts for more than 14% of all retail sales worldwide, and experts predict that by the end of 2020, those sales will surpass $4 trillion, with more than two billion digital buyers.
Benefits of e-commerce for publishers
- Publishers can develop stronger relationships with their consumers that are made clear with a tangible value exchange.
- It’s often low-risk and low-investment.
- Provides a strong logged-in user base.
- Brings in healthy first-party data.
- Offers the ability to scale.
Let’s take a look at some of the e-commerce strategies that have been most successfully implemented by digital publishers.
It is expected that mobile commerce will represent a 72.9% share of e-commerce by 2021.
The social media factor
Consider some other stats from eMarketer around social media e-commerce:
- One in four companies sells items via Facebook.
- Around 40% of retailers are using social media platforms to generate sales.
- Online shoppers think that social media platforms benefit their purchasing decisions.
- Around 30% of interviewed consumers said that if they like a product they would order it through social media platforms.
According to Big Commerce, online retailers that have at least one active social media account make 32% more sales than online retailers that don’t use social media platforms.
The emergence of shoppable ads, either through social media or directly on a publisher’s website (such as BuzzFeed’s new Shopping Showcase), offers several benefits to a publisher:
- Cuts out the middleman and reduces the path to purchase.
- Allows the brand to personalize its products to its audience.
- Has visual impact. According to Google, half of the online shoppers say images of a product inspired them to buy it.
Diversified e-commerce options
The first thing that most people think about when they hear the term e-commerce is an online retail shop. However, the field offers myriad methods for e-commerce players. The typical e-tailer market has moved beyond retail goods to include digital goods (think podcasts, streaming services, digital downloads and the like) as well as services.
Branded content and brand licensing, for example, are avenues that digital publishers such as Time and Conde Nast are taking. The Nation magazine runs a travel program online as a revenue source, selling organized trips to destinations around the world (admittedly impacted due to COVID).
The Denver Post’s online store sells photographs of Colorado scenes taken by its photojournalists, while the Seattle Times sells wall art, keepsake reprints from their archives, photographs, and coffee table books.
Publishers’ e-commerce ventures might also be surprising. Take Dennis Publishing in the U.K., for example, which runs an automobile sales site that sells between 250 and 300 cars each month. It works with its titles, Auto Express and Carbuyer, and the company reported to make $138 million in revenue from this venture in 2019.
The large U.S. publishing conglomerate Hearst has launched several e-commerce strategies that complement their digital content. These include cookbooks for sale from their Delish food site, online workout classes from Women’s Health. These offerings not only are natural extensions of their core publishing business, but also provide an opportunity to repurpose content for monetization.
These content-to-commerce strategies are a path that many digital publishers will be looking to get into, as they offer a valuable revenue diversification approach and build on the publisher’s existing core business. Publishers might want to take a look at the International News Media Association’s new report, Content-to-Commerce Brings Revenue in Post-Advertising World, for key considerations and strategies in building this line of revenue.
Amazon still dominates the e-commerce market, garnering 49% of all U.S. e-commerce sales in 2018 — a figure that has certainly grown. The Amazon app is the most popular shopping app in the U.S., with a reach of more than 75%. With the company growing more ambitious with its private labels, these numbers are expected to skew further in the e-commerce giant’s favor, according to CNBC.
But there are still ways in which other e-tailers can garner a market share and succeed in spite of Amazon. Consider this stat from Digital Commerce 360: the number-one reason consumers decide to shop on a marketplace such as Amazon, instead of direct with a retailer, is the price tag. Other decisive factors are free or discounted shipping, speed of delivery, and a broad range of products.
In closing, let’s take a look at some of the best practices that digital publishers should consider when devising or expanding their e-commerce strategy.
- Offer free shipping on retail goods. When it comes to factors that consumers consider when making an online purchase, free shipping is the most important. Timely shipping is also a deciding factor; around 40% said that the reason they didn’t make a purchase was that it wouldn’t arrive on time or the delivery date was not precise.
- Have a good, easy and clear return policy. The ease and cost of returns is the second-most important factor for online shoppers.
- Accept credit cards. While PayPal, BitPay and other payment methods are good to offer, most online shoppers prefer to pay with credit cards.
- Abandoned shopping carts are a big problem, with an abandonment rate of 68%. The Baymard Institute offers 39 ways in which e-commerce businesses can improve their check-out processes.
- Provide details, reviews, and supporting tools such as explainer or how-to videos. 85% of consumers conduct online research before making a purchase over the Internet, and the more a retailer can do that work for them, the more likely they are to make the sale.
- Invest in the user experience. The Global Consumer Survey Report 2019 suggests this should be a priority. Aside from measuring ROI (return on investment), companies should also start measuring ROX (return on experience) and determine how an increase in customer satisfaction scales their businesses.
- The e-commerce strategy must be built on the strength of the publisher’s brand, which must have a purpose and a reason to exist for the consumer. It needs to be authentic, possesses an emotional quality, and present a personality.
“If a publisher meets this high bar, then it can begin the work of developing a commerce strategy because its content connection to a purchasable product will be valuable to consumers.
*All monetary figures are in U.S. dollars.