Magalogues vs. Catalogues 2.0

Publishers are becoming more about transaction than aspiration

Publishers are becoming more about transaction than aspiration

Historically, the magazine revenue model was simple: produce content and then sell advertising space next to that content to marketers, while letting the marketer make the sale to the consumer. A decade ago, at the height of the shopping magazine phenomenon, magazines like LouLou and its U.S. counterpart, Lucky, made the not-so-subtle link between magazine content and commerce more explicit, making their pages a more transparent showcase for the latest consumer products.

The only problem was that magazines’ role in the process was still limited to one of persuasion, meaning they weren’t getting a piece of the (trans)action. The next logical step? Shoppable content.

In the age of shoppable content, readers can now click on a link embedded in publishers’ content to purchase an item directly. Want to own the footwear featured in the “Super Summer Sandals” magazine feature? Just click to purchase them now. Once they ripped pages; readers can now click a mouse. It’s exactly the kind of e-commerce strategy publishers need in an environment where online competitors are bleeding away ad sales and readership and, perhaps more disconcertingly, brands have discovered they, too, can play the publishing game.

Merchantry, a New York company that works with media companies and retailers to create online marketplaces, predicted earlier this year that every publisher would offer an e-commerce solution within the next five years. Speaking at the OnMedia Awards in New York, the firm’s CEO, Tommaso Trionfi, identified the recent rise of custom titles, or brand magazines, as one of the key drivers of this trend: “If you’re a publisher, and you see your subscription and your advertising rates going down, and… people are still producing catalogues that look like magazines, that have beautiful content [created] by editors you used to employ, you may have a problem.”

In the U.K., for example, The John Lewis Edition, a publication produced by retailer John Lewis, is among the country’s fastest-growing titles. Trionfi calls these new retailer custom titles “catalogue 2.0,” a segment created with the sole intention of driving readers to retailers’ e-commerce sites.

Heather Marie, founder and CEO of the New York startup Lux72 (slogan: “Transforming publishers into retailers”) says the mass arrival of e-commerce solutions could arrive even sooner. “All major publishers are having very real conversations today about launching e-commerce,” she says. “Several [are] targeting to have e-commerce launched across entire portfolios of sites within the next year.”

Not surprisingly, this has created some consternation among the old-school publishing community. Even when shopping titles first arrived about a decade ago, one U.S. editor predicted – presciently, it turns out – that publishers would inevitably try to share in the profits from the sale of goods in their pages.

But while purists may decry the advent of shoppable content as a further erosion of the already razor-thin line separating church and state, the creation of a potentially lucrative revenue stream, particularly in the face of dwindling ad revenues, will likely override any qualms publishers may have about pushing forward.

Diversify or die is the informal mantra for many traditional media outlets in trying times, and the past year or so has seen a spate of activity in the shoppable content space.

Despite the apparent logic of linking magazine audiences with complementary brands, there is no guarantee such ventures will succeed. In late 2011, the men’s title Esquire announced an online partnership with J.C. Penney called CLAD, which would enable readers to shop selected items featured on a dedicated Esquire-branded site. The venture lasted a mere three months.

Yet CLAD is currently the only high-profile failure in a phenomenon that is growing in both the United Kingdom and the U.S.

Canadian publishers, too, are dipping a tentative toe into the shoppable content waters.

Since its 2004 debut, LouLou (which is owned by Rogers Media, as is Marketing) has been shaping the monthly shopping habits of its nearly 1.1 million English and French readers. According to internal research by Rogers, nine out of 10 readers purchase at least one of the approximately 600 items showcased within LouLou’s pages every issue.

“If you have a shopping magazine and nobody is ever inspired to buy what you’re presenting, you have a problem,” says Marie-José Desmarais, Montreal-based publisher of both LouLou’s English and French editions and the French edition of Chatelaine.

For all of its influence, however, LouLou hasn’t made a dime on any of the actual purchases it has inspired. Earlier this year, however, it launched a new online extension called LouLouShopping.com that enables readers to purchase items featured on the site directly from retailers.

It transforms the nine-year-old title from a place to merely “window shop” to an online shopping destination where users can currently purchase up to 150 different items (the list is being updated on an ongoing basis, says Desmarais). “It’s our first step towards e-commerce,” says Desmarais, who claims that the venture is a first for a Canadian publishing brand. “There’s a lot of interest in the market because we’re the first ones there,” she says.

LouLouShopping.com launched in partnership with Montreal-based fashion retailer The Aldo Group, which is sponsoring a dedicated section of the site called the Shoe Lounge.

Aldo has exclusivity in the shoe category for three months and the section features “hundreds” of Aldo brands.

While the partnership with Aldo is not constructed around a revenue-sharing model yet, Desmarais says it is something they hope to do someday. “It’s certainly an interesting avenue for magazine brands, because magazines do influence shoppers a lot.”

In the modern era, these big-growth areas often come into direct conflict with the increasingly slippery notion of editorial integrity, observes Lynn Cunningham, a former magazine editor at titles including Toronto Life and Canadian Business, and now an associate professor at the school of journalism at Toronto’s Ryerson University. She says such initiatives would likely never have existed even a decade ago, before readership and advertising revenues began falling.

“The revenue issue is clearly a factor,” says Cunningham. “It’s not a development that’s going to be applicable to every category of magazine, and women’s magazines really have been skating close to the line for years, but you think ‘What’s next, putting items for sale on the cover of the hard copy?’ All under the explanation that revenues are hard to come by.”

In its 2013 outlook, the IPG Media Lab boiled the phenomenon down to the fact that the purchase funnel is now being “squeezed at both ends” as companies look to satisfy the increasing consumer need for instant gratification. “Content and commerce used to be different,” the report stated, “but now we are starting to see the two come together more and more.”

That trend is reflected in the partnership Harper’s Bazaar struck with upscale fashion retailer Saks Fifth Avenue to launch ShopBazaar.com. According to media reports, Saks is supplying approximately 80% of the merchandise featured on the site. Harper’s has a revenue-sharing agreement in place with Saks, although terms of the deal have not been disclosed.

“Our ultimate goal was to leverage Bazaar’s unrivaled fashion authority and stake our claim as the first-ever, true content-to-commerce venture,” says Wendy Lauria, executive director, brand development and integrated marketing for Harper’s in New York. Harper’s Bazaar editors handpick each item available on ShopBazaar.com, ranging from a pair of US$4,485 Noor Fares earrings to a $325 equivalent.

A feature called “The Wait List,” which enables users to pre-order sought-after items before they arrive in stores, has also proven “extraordinarily successful,” says Lauria.

Ryan Trotman, digital media strategist with Rogers, says a revenue sharing model to monetize LouLouShopping.com isn’t in the immediate plans. “Taking a share of purchase would be new to us, and that’s certainly a little outside of where our past strengths have been,” he says. “We’re trying to focus on areas that are our strength.”

Like ShopBazaar.com, the LouLouShopping.com site features editorially curated content that features complementary products, including beauty products and accessories, as part of a complete outfit. Presenting items in a contextually relevant manner is a key part of the business strategy, says Desmarais.

“It’s a natural extension of what LouLou is all about,” she says. “It’s a destination where we curate merchandise and present it to our readers, but this time they can click and go and purchase the merchandise.”

The venture is a natural progression for LouLou, she adds. “Some women will go directly to our website and buy online, other women can take their first step with the magazine, learn about the shopping destination we’ve created, and then buy online.”

Rogers’ extensive repertoire of consumer titles means the LouLouShopping.com model can be extended across multiple publications, says Trotman.

The women’s title Chatelaine, with its emphasis on home décor, fashion and beauty, will experiment with a similar model, he says. “We’re looking at it across a lot of our brands right now; certainly the women’s brands are presenting the strongest opportunities versus our news and business [publications].”

“This is a big growth area for our brands.”

There’s more! For more insight into the changing magazine industry, plus a look at which publishers are pushing products, subscribe to Marketing. Check out our print magazine and its iPad counterpart, and be sure to stay in the loop with our twice-daily e-mail newsletters.

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