What Publishers Can Learn From Online Retailers

What does content mean for online retailers, and how can publishers successfully work commerce into their websites? Those were the questions discussed at a Financial Times panel in NYC last night. “There are lots of things that merge between media businesses and 2.0 commerce,” said Susan Lyne, chairman of Gilt Groupe. “We’re all competition for each other in that we’ve got limited time to spend on something besides work and family.”

Rob Grimshaw, managing director of FT.com, alluded to the challenges that lie ahead for publishers: “Just because we’ve opened a shop doesn’t mean we’ve become retailers.” The lessons are worth learning: In the slightly tongue-in-cheek words of moderator Andrew Edgecliffe-Johnson of the FT, “We’d all rather be Amazon (NSDQ: AMZN) than some boring old newspaper company.”

Some takeaways:

The Single Thing With the Biggest Payback Social networking is not a panacea: “We get traffic from the social channel, but more from either e-mail or from people just having bookmarked the site,” said Gilt’s Lyne. “Personalization is probably the single thing you could focus on that will have the largest payback.” Some of that, she said, is self-generated: “Asking people to self-identify as liking ‘x’ brand, or wanting to read more about this or that.”

But Gilt has also started heavily personalizing all of the e-mails it sends out. There are now “literally hundreds of thousands of versions of the e-mails,” Lyne said. “It starts when you come in; we separate you by being male or female, and where you live. But over time, we look at your browsing behavior and your buying behavior–anything you’ve tried to add to your cart and not been able to, anything you’ve waitlisted–to get a sense of what your sizes are. We layer that on top of vertical data, so we get more data. We run it every night, so the next day your e-mail has been ordered in such a way that the brands you’re interested in and the sizes you wear are at the top. It’s all automated.” This process hasn’t yet been extended to Gilt’s website, because that is such a big undertaking. But “if we could change the site 800,000 ways, we’d do so,” said Lyne. “And in time, we will.”

Beyond Product Descriptions. “The type of content we seek to provide has to meet the needs of a parent or grandparent.,” said Andrew Kovan, chief of marketing and digital commerce at toy company Melissa & Doug. ” There used to be less emphasis on content, specifically, and more on content in general: Product descriptions, or four images. Now the content has to accomplish something, and it’s moving into the realm of video. How do we make sure we’re providing the right content in the right places to get that conversion–which may happen offline in our case.”

The Value of Niches. “As we’ve started to get more information about how people read articles on the site and the journeys they then take, what has started to become clear is that the value is not necessarily where you think of it,” said Grimshaw. “Some of our more niche content about commodities, for example, is actually incredibly effective at convincing people to subscribe. When you have that info, you start to look at those areas in very different ways and think of additional content to put around them–it’s not just a backwater. Picking out niche opportunities is key to getting this right.”

Lyne agreed. “When we do a sale on shoes, we end up with the women’s size 5 1/2 and 11 at the end of it,” she said. That used to be a “challenge, the leftovers.” Then “we realized, wait, we’ve got ‘x’ number of people we know wear a size 11. So why not create a private sale for them?”

What Content Means For Retailers “We photograph almost everything that we sell ourselves,” Lyne said. “At the forefront, we’re investing in styling clothes that will make them appeal to a certain consumer. So take certain brands that may have been perceived as a little more old-fashioned–by breaking up Carolina Herrera suits, showing the top with a pair of jeans and a great T-shirt–suddenly Carolina Herrera becomes a cool brand for 25-year-olds.” Moderator Edgecliffe-Johnson broke in–something he did more than once when Lyne was speaking about something interesting–to ask if Gilt is in competition with magazines. “Yeeeeeeeah,” said Lyne slowly. “It’s part of our sell to vendors: We’ll bring your brand to a new market base and bring back business intelligence to you. We give vendors a [free] breakdown after the sale, with the demographics of who bought what and which things were most popular.” In other ways, too, Gilt has evolved its sites after watching news sites. “Gilt Taste has a very heavy content component to it and we brought Ruth Reichl in to be the editor,” Lyne said. “Our thought was, let’s engage with that foodie community and celebrate artisanal food producers, so that over time people who come initially for content will also use us as a source for food.”

For Melissa & Doug’s Kovan, a large part of content is “the user-generated piece–images, videos, Facebook comments. I believe we have a responsibility to ensure that that content sets the stage for what happens when the customer buys the product.” Melissa & Doug just signed a content share agreement with Grandparents.com, and Kovan said he’s open to other such partnerships, which he believes can add value to both brands participating.

For The Financial Times, Small Changes Meant Twice As Many Subscriptions. “Customers are very sensitive to small things,” said FT.com’s Grimshaw. The company tested different subscription “barrier” pages–changing only some wording and content and keeping the price and package the same. “After two months of experimentation, we were selling twice as many subscriptions,” he said. “It was an astonishing revelation, that small changes in the design of one stage of that process could make such a big difference.”

Shopping As Entertainment. “We take a lot from media in our commerce business,” Lyne said. “We program our site every day and it’s new every day. We launch at noon with a completely new set of vendors. It’s the idea of being ready for an audience and trying to put your best face forward every single day, and assuming that at least a part of shopping is also entertainment.”

Loyalty Means Something Different Now. “The traditional way of looking at loyalty doesn’t match the ways people engage with brands anymore,” said Irving Fain, CEO of brand engagement software company CrowdTwist. “People may engage for days, weeks or months before a purchase is made. Now all the interaction that people have with content is a transaction that has value–watching a video and seeing a product in action, or sharing a link.”

The “real currency” now may be a shared e-mail address. “Getting people to say ‘Yes, I would like to receive e-mail from you’ is increasingly difficult, because, as you all know, your inbox is a nightmare,” Lyne said. “Every deal site in the world is offering you the best deals on the planet, there are multiple newsletters coming at you. Inbox clutter is an increasing challenge to anybody trying to develop an ongoing relationship with a consumer.”