The Newspaper eShops – 4 Types of Online Stores for Online Publishers

For a very long time publishers have been struggling to face a new, harsh reality: their business models becoming obsolete. As traditional customers were switching to the internet, publishers found themselves in a very tough spot. Their product, the information – became a commodity. Anyone with an internet connection and a blog became a potential competitor. News and content became freeware. It wasn’t quality content but people were reading it. For free.

Publishers lost ad and subscription revenue

Soon advertising money started to flow another way. More and more ad revenue got directed to internet companies by media buyers and marketing VP’s. Subscriptions kept dropping. People were now subscribing to these new thingies – RSS feeds and email newsletters and a bunch of other stuff. But they were all free.

Some publishers moved with the trend. Although a little late to the party, they moved online. They’ve opened web outlets and although it was a harsh decision – most had to give away content. They’ve tried to charge readers for reading the content they would otherwise find free. It was a failure.

Then came the freemium model and some had a bit of success with it. These were mostly financial-related publishers that addressed a information-hungry public ready to pay for quality content. The Wall Street Journal, Financial Times, Bloomberg built sustainable not-for-free online business. Others had to find new ways to get paid.

Classifieds and job boards helped online publishers diversify revenue streams

The classified ad model and the job board came first. The solution was right there for anyone willing to see it. The classifieds were a model that worked great online, combining the need for C2C advertising and micro-payments. Jobs – everyone looks for one at some point. So why not charge people to post their openings. And guess who could target those willing to pay for these models. That’s right. The publishers.

Large newspapers and magazines alike were popular. By going online their readership increased. Using classifieds software they used the otherwise unprofitable traffic to increase revenue streams. It worked great. In 2013 UK publishers registered almost 30% increase in revenue with recruitment and classifieds.

A new revenue model for publishers – the online store

But there was still room. The publishing industry noticed that a lot of those ads shown to their readers were ran by online retailers. With online retail you didn’t have to have the whole retail logistics to be able to sell stuff. You needed media and a partner to provide the right services.

As publishers saw their revenue switching hands, they too got ready to switch to new models. Below you’ll find a list of 4 models that now help publishers to sell merchandise to their customers. Some more than others.

1. The brand-endorsed, curated store

atlantic

The Atlantic decided to try selling merchandise online but was unwilling to build a whole logistics chain to handle sales, customer support and fulfillment. They did partner with Zazzle, a platform allowing on demand ecommerce fulfillment. The Atlantic forwards the traffic and endorses the store. Zazzle provides merchandise sourcing and fulfilment.

Among the products available on the store you’ll find clothing items, cards and postage, office products and even electronics.

2. The “Post a Logo on it and Sell it” store

cnn

CNN decided to go “big” with this whole ecommerce thing everyone’s talking about. Although it’s clear they’ve put a lot of effort in manufacturing a lot of stuff with the CNN logo on it – it really doesn’t feel right. Maybe it’s the 90’s web design or the CNN Store 9 to 6 open hours for the *online* store. These things really don’t cut it.

While it might not seem like a lot right now I bet the store was the bomb when people used to access it via dial-up.

new-york-post

While the New York Post seems to try harder than CNN, it’s still not proper. Although I am sure people just love to walk around in a $24 “New York Post” T-shirt , I doubt this is the right formula.

The merchandise listing is targeted at really die-hard fans of the New York Post… which I figure is not much of a market.

3. The Online Store Built for the Audience

cracked

Cracked.com is one of the most popular humor websites in the world and provider of fun to american readers for over 50 years. Their store is built around the audience. It features witty copy t-shirts that appeal to readers.

The store is clearly a very important revenue driver (at least is expected to become) for cracked.com as the publisher promotes it heavily.

newyorker

The New Yorker knows what readers love about it. It is The New Yorker’s style, elegance and wittiness that make it so successful. The store features products that people would love, just like they love the brand: elegant diaries, printed comics, beautiful covers and … well … umbrellas (?!).

vanity

Just like The New Yorker, Vanity Fair is a part of Conde Nast media holding. Its store is packed with beautiful premium photographic prints, illustrations and covers, items fans would love to own.

4. The Multichannel All – Rounder

national

 

The National Geographic is in a league of its own. Not only has the brand built a strong online store but it also features its own collections, it sells merchandise that appeal to children as well as adults. Its gifts are wonderfully presented and really in tune with the brand identity.

Moreover NG  runs a network of retail brick and mortar stores in the UK and US. As a multichannel retailer The National Geographic shows it can build a great retail experience, as well as provide the world with astonishing information on wildlife.

And that’s not all. Customer purchases enable The National Geographic to walk on a noble path. Its mission – to inspire people to care about our planet. It does that by helping cultural preservation, exploration and research and others you can find out about here.

Talk about a great selling proposition – buy stuff and save the planet. The National Geographic shows you can be a great information outlet AND build a great business model. It also shows the online store is a viable option for publishers trying to improve their revenue streams. If they try a little harder.

 

AliBaba decides to take its IPO to the US. Is it taking on Amazon and Ebay? Not just yet.

In terms of global Ecommerce, this was a very interesting day. The Chinese wonder, Alibaba Group Holding, has decided to take its IPO to the States. The company, founded by ex-english teacher Jack Ma in 1999, is now on track to extend its influence outside China.

Jack Ma - founder of Alibaba.com
Jack Ma – founder of Alibaba.com

The company started as a way to connect Chinese manufacturers to the western buyers. It than evolved a B2C and C2C approach, an online payment solution (AliPay) and even an investment fund, Yu’e Bao.

The company’s growth has been mostly fueled by its B2B division, one very important gateway to China’s manufacturers, and its connection to Yahoo. The american company, although not in its best year, was lucky (wise?) to invest in AliBaba, when it was just starting. Although the group has been buying back Yahoo’s stocks, it is still largely (24%) owned by Yahoo.

Given AliBaba’s growth, Yahoo’s stocks have been bumped up. Some analysts suggest that 21$ out of Yahoo’s 37$ stock price come from AliBaba. The future looks great for both Yahoo’s stocks and AliBaba. In the IPO the Chinese company is expected to raise $15 billion, at a valuation north of $140 billion.

Is AliBaba ready to take on Amazon and Ebay?

The answer is … probably not. This might not be its target. As mentioned in an announcement on the corporate blog, AliBaba initially intended to be listed on the Hong Kong exchange. Its management structure, however, would not have the same influence in the case of a Hong Kong listing. Senior management, owners of 10% of the company are not willing to bend to Hong Kong’s rules and have thus decided to switch markets.

“We wish to thank those in Hong Kong who have supported Alibaba Group.  We respect the viewpoints and policies of Hong Kong and will continue to pay close attention to and support the process of innovation and development of Hong Kong.” – Source

Even though the company says it wants a global approach and a more transparent communication to the market, its senior executives still want the full control.

AliBaba needs two things right now: cash and popularity. It needs cash to keep up with its historic growth, as China’s economic growth is slowing down. It is still based in China, its main assets are Chinese manufacturers and it is China where AliBaba controls 80% of ecommerce. But Jack Ma was wise enough to share its company’s growth with Yahoo, which was a bless in terms of global reach and brand awareness. The company now needs to go a little further. The global media has its eyes on the New York stock exchange and AliBaba needs to show it is more than just another Chinese company.

It doesn’t matter that the company is already listing a tenfold increase in B2B transactions or the fact that the Chinese ecommerce market will reach$655 billion by 2020 . The spotlight is somewhere else. And AliBaba needs to be there.

The P2P (Peer to Peer) Banking Revolution. Can The Big Online Retailers Take on Banks?

Banks are one of those things people take for granted, whether they understand them or not . Their systems and inner workings are unknown to most of their customers. Their influence has, to some extent,  shaped the modern world. Strength, rigidity and, until recently, stability have been the common attributes for banks.

Change rarely, if ever, happens in the banking sector. When it does, it’s usually for the worse. Recently, however, something seems to have been shaking its very foundation: the evolution of electronic markets and peer to peer cooperation.

Commerce has been liberalized by the likes of eBay, Amazon and AliBaba. These companies are responsible for shortening the supply chain from manufacturer to the end consumers. As recent developments show, the banking sector is next. Who knows, maybe the companies that changed retail will also be those able to change banking.

Lending for the People: Top Peer to Peer Banks

Although just recently launched, some new companies have been taking the banking world by storm. These companies match lenders and borrowers, through a common marketplace platform, usually using auctions.

225px-Zopo-logoZopa, UK’s leading P2P lending company, offers a 5% return to lenders and charges 5,6% on personal loans. Apparently it works great as overall acceptance has been steadily rising. In the past 6 months alone the company has lend 100 million pounds, 25% of the total lend since it was founded in 2005.

Among the things responsible for a growth in P2P lending acceptance was the fact that traditional banks’ risk aversion that slowed lending to a halt. Savers have also been ignored by banks so they had no other choice but to turn to new methods of growing their savings. “UK savers seem to have been forgotten by the banking establishment, so it is not surprising more people are giving Zopa a try”, says Giles Andrews, CEO of Zopa.

isepankur-logoIt’s not just the UK or the western world that seems to have an appetite for P2P lending. IsePankur, an Estonian based P2P banking startup, has just added lending options to investors outside Estonia. The company was accepted quickly as an reliable financial player and now it lends money to 60 000 people. Although it tackled the  acceptance issue, it still has to deal with higher risks than UK-based Zopa. It manages this issue with the help of a high return on investments (aprox. 22%) that seems to be enough for everyone willing to lend against a default rate of 3%.

Source: Wiseclerk
Source: Wiseclerk

lending-club-logoGoogle itself is pretty interested in the P2P area as it purchased a share of Lending Club, valuating it at $1.55 billion. The company, based in San Francisco, is boastful about providing loans in 43 states and earning its investors more than $300 mil so far.

Lending Club was founded in 2007, 2 years after Zopa, by Renaud Laplanche and it has lend more than $2 billions in 2013.

lending club
Usual destinations for loans contracted on Lending Club

Deposits are also being disrupted. AliBabab.com shows a growth rate of 1211%

AliBaba.com, China’s main digital company, the biggest online retailer in the world has joined the banking digital revolution. It has recently launched the Yu’e Bao (“Remnant treasure”) fund , that allows its customers to capitalize on AliPay’s growth by depositing money in this fund.

Customers will use money parked in their accounts. Their funds can thus increase with the company’s development. Although it is taking on some of the largest and richest banks in the world, it shows an outlandish growth rate. “Yu’E Bao fund reached 4.24 billion yuan (USD 693 million) in Q2 2013, growing by 1211.33% in Q3” it is reported.