eCommerce and publishers; key findings and recommendations

eCommerce and publishers; key findings and recommendations

Group Commerce, the leading ecommerce platform company, recently commissioned Forrester Consulting to evaluate the way companies in the publishing, broadcasting, and media industry view eCommerce as a tool to drive online revenue. During the ecommerce event Think Commerce in December, Group Commerce and Forrester presented their findings. The following is an overview. The full research paper can be found here.

Forrester studied how prepared publishers are to add eCommerce to their portfolios. Here is a summary:

Digital platforms are a necessity and a norm for media companies today, but the opportunity to monetize the efforts has not been taken advantage of. Digital revenue streams mimic that of print (traditional ad sales) despite the enhanced
features that can be offered digitally. eCommerce proves to be one of the most profitable options for media companies to create a new revenue channel, enhance engagement with their audience base, and differentiate themselves from
every other media company with a digital channel. The transition from exclusively offering content to offering retail alongside content is a daunting challenge for most companies — and one that won’t even be considered by top management — but vendor solutions exist that will make the transition manageable and lucrative.

 

KEY FINDINGS:

  • eCommerce is a priority initiative for media companies, but few have the necessary support. It is acknowledged in the media industry that when done well, eCommerce can enhance consumers’ interaction with digital content, which in turn drives audience loyalty and revenue. However, few companies have successfully incorporated retail into their site as a result of budget constraints and business models.
  • Contrary to assumptions, consumption of digital content brings positive business results. Traditional content providers have been leery of the jump to a digital platform, but media companies reported that as a result of the shift to digital content, there has been an increase in the number of paid print subscriptions, audience base, market share, and revenue generated from advertising. This gives businesses a solid platform of advertisers that they can partner with and an audience base that they can engage with to drive eCommerce on their site.
  • Technological solutions are in demand. Media companies recognize that advanced website functionality is a key opportunity for driving revenue and report that implementing and managing a technology platform is one of the key services they would like to see from vendors.

 

KEY RECOMMENDATIONS:

Media companies have an opportunity to create a revenue stream while enhancing customer engagement. Successful players will:

  • Consider where they will be in five years if the investment is not made now. Media companies that do not move into this space soon stand to lose more than revenue. Digital media companies are increasingly innovative and move fast. Within the next five years, consumers will favor media companies that enhance the online experience by fueling information and product discovery.
  • Realistically assess in-house capabilities across all dimensions of eCommerce. Sourcing products, marketing online, managing product content, brokering orders, handling customer service, and preventing fraud are just the top-level operational and technical capabilities required to provide an exceptional eCommerce experience. Media companies must mindfully evaluate their ability to drive a retail experience. In many cases, companies will initially benefit from working closely with partners as they develop and mature their offering. Over time, those capabilities and business processes may be brought back in-house as cost and operational considerations warrant.
  • Integrate the content and commerce experience. Simply adding a retail tab on your website and expecting customers to find product sales is not a likely path to success. Commerce must be woven into the content and editorial experience and across all communication channels in order to bring awareness to the offering. It is essential to do this to enhance and not disrupt the consumption of digital content.
  • Be patient. It may take time to see the real benefit that adding eCommerce to a media business has on the bottom line. Customers must grow familiar and comfortable with the marketplace while companies work to perfect the experience. It is also important to remember that online retail of any kind will capture smaller margins than traditional advertising models.
  • Focus on curated offers. For those interested in a daily deals model, note that among consumers and advertisers alike deal fatigue is an issue. Highly relevant deals in specific interest niches are the products that most resonate.

The full research paper can be found here.

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