What Retail Can Learn From Publishing as the Industry Transforms
If anyone was hoping 2019 would be a gentler year for brick-and-mortar retail, those hopes have been dashed. A recent New York Times report showed that closures in the first few months of 2019 exceeded those for all of 2018, itself a tough year.
Retail chains still face the migration of dollars to online and cost bases that are out of sync with consumer preferences, not to mention the rise of dynamic direct-to-consumer brands. Still, their brand value and name recognition remains remarkably durable. So, how do you turn that into revenue?
Retailers would do well to consider another industry that has gone through a similar wringer: publishing. In the 1990s, ad dollars went to the Google/Facebook duopoly and the industry struggled with declining revenues year after year. Today, there are a few bright spots — legacy and new media brands from the Financial Times to Vox Media have learned the secret to delivering viable business models: focusing on brand first, and building in multiple revenue streams on top.
Hindsight and Scarcity
In hindsight, we can see parallels between the retail and media industries in the pre-internet era. However, back then scarcity was a key point of their offering. Consumers could only buy from stores within close distance to their homes, and the number of publications that offered valuable audiences to advertisers was much more limited. The internet upended scarcity in both industries: volume of content exploded, and any consumer with a credit card could purchase from any retailer's website.
Successful players combined brand value with greater data usage to understand their consumer. The New York Times moved to a subscription model, and has grown to over 4 million paying subscribers while layering in businesses like its brand studio and WireCutter. Newer brands like Vox Media and Axios built brand recognition with a specific audience and then layered on ways to monetize with events, podcasts or selling their CMS technology. For the first time in decades, there are signs of life in media.
The Lesson for Retail
For some retailers, a world without scarcity could mean actively working to narrow the focus of who they sell to — i.e., identifying a core group of users or potential users and catering to their preferences, with a focus on data-driven marketing, curated products, and brand consistency across multiple online and offline channels. A good example would be "competitor conquesting" using location data — what people actually do, not what they say they do on surveys or on social media.
When the hard work of defining your brand is done, revenue experimentation can begin. An obvious example is a membership program that creates direct, regular revenue from the core consumer to the company. This requires retailers to think creatively about what services would justify this kind of membership. Bed Bath & Beyond, for example, is the place to go for kitchen basics, so it could offer members-only cooking classes.
Retailers should also be providing more personalization in-store. Recent Blis research showed growing demand for automation and personalization in shopping, whether in-store or online. Media brands recognized this long ago. For example, my news homepage reflects my browsing habits as much as the day’s news. Anticipating consumers’ needs from their previous purchases and online activity could translate into a ready-made basket of goods upon arrival. Either would make the in-store experience more compelling at a time when foot traffic is at a premium.
Publishing and Retail: The Data Difference
Crucial to all of this is data. Like media outlets, retail chains have endless touchpoints with customers, from browsing for clothes via desktop to how long they spend in-store before making a purchase. The key is learning how to turn one-off data into real-world insights to understand what consumers want, rather than creating new products and hoping they resonate.
For retail leadership, this requires a level of confidence and risk taking — none of which will be easy. But like the publishing “revolution,” those that take initially painful steps to diversify offerings and streamline the customer experience with a data-led approach will thrive in a changed landscape.
Related story: How Technology Has Radically Transformed Retail
Dave is responsible for driving global revenues, and delivering the required revenue mix at Blis. A veteran of the media and advertising industry, Dave has a successful 35 year track record. Most recently he was MD of Exterion Media, the second largest OOH media operator, where he was in charge of a £300M turnover and 440 employees.
Previous to this he spearheaded the commercial side of the Telegraph Group for 12 years as Executive Director, was MD of Emap Advertising and headed up investments for Carat where he deployed million of dollars worth of client billings across the media mix.
Outside of work Dave is busy with his family and they all share a keen interest in sport — football, tennis, cricket, skiing and golf — all at varied levels of competency! He was fortunate to be selected by his employers to attend senior executive programmes at both Harvard and Stanford and also, made a brief appearance on BBC’s the Apprentice TV show as an industry expert.