IRC 2014 THE CONFERENCE How Condé Nast is planning its move into ecommerce
Condé Nast International will next year start to use ecommerce to sell goods to readers of its magazines. The publisher's titles, which include Vogue, GQ, Wired and The New Yorker, are sold in more than 30 countries, with digital editions that attract more than web traffic of almost 250m users a month.
Franck Zayan, president of its ecommerce division, was at Internet Retailing Conference earlier this week to explain how its transition into retailing will work in practice. Zayan, who was ecommerce and internet director at Galeries Lafayette Franck Zayan, president of ecommerce, Condé Nast International: What publishing companies have tried to do for the past three to four years is to find a way of bridging the gap between content and commerce. If you open any of those magazines, for page after page it basically talks about products. It does it in a very specific way – you don’t see a catalogue of products when you read Vogue but you do see the entertainment pertaining to the product and the purchase. Basically you see the magic behind the product.
Bridging the gap between content and commerce has been tried over the last few years by many publishers, and it’s been tried in different ways. Most of them have tried affiliate marketing and what they first discovered affiliate marketing they thought they’d found the holy grail. It was a great way of connecting all this content with the product. But the thing is affiliate marketing can’t be turned into a profitable and big business for publishing companies. Other schemes started emerging.
What Condé Nast has decided recently is to really make that connection with product by building a commerce division. What’s very interesting is when you look at ecommerce players, what they’ve tried to do in recent years is the same thing: to bridge content and commerce. They hired publishers and editors, to create that content, to bring it closer to the product because it brings authority and credibility and conversion rates go up. The reason why content and commerce are coming closer together is because creating a relationship with customers just on a catalogue of products does not make sense any more.
IJ: It’s all very well and good having interesting content and inspiration, But someone has to pony up hundreds of millions to buy the product and make it ready to ship. Are you saying to me that between buying print stock and modelling agencies you’re just going to buy 50,000 products and sell them?
FZ: The quick answer would be yes, we are going to be doing this. There are different ways. We’re not just going to buy a big warehouse and stock it with thousands and thousands of products. We’re going to build this in a process. Bringing commerce closer to everything you see in the Condé Nast magazines makes perfect sense because that’s what customers expect. They’re really asking for it, they want it.
IJ: How do you balance editorial integrity with clearing the warehouse of last season’s stuff? If as a Vogue reader I immediately think you’re pushing things you have left in your warehouse from spring/summer, or pushing trends that become a self-fulfilling prophecy, how will that work?
FZ: If you’re not able to clear your warehouse of last season’s stuff, then Vogue should not help in doing this. It’s extremely important that fine line between content and commerce be kept as it is. A commerce venture at Condé Nast will stand on a few very important pillars, and one is them is obviously the authority of the Condé Nast brands. It is that power of influence and recommendation that is absolutely key. The second you start fiddling with that integrity, then those brands will lose this power and the authority. It is extremely important to keep that line so that Vogue does Vogue and does not push products. Vogue talks about trends, about brands, about fashion, about style and that’s what Vogue should keep talking about.
IJ: So how will it work? How is it going to look to customers? What’s the change?
FZ: Ideally when a reader goes to Vogue and sees a product she’s interested in, we need to find a way of making that connection with that product so that it actually goes all the way through the transaction. Vogue will keep presenting its content as it is doing it today. But we will add a way of making that match between the content and products we are selling.
IJ: This is product you will have bought yourself and my credit card receipt will say bought from Frank at CN, it won’t say from an affiliate, a retailer.
FZ: Even if it goes through a process like a marketplace process, the brand we are building to create that commerce will basically hold the entire transaction process. The customer will basically have a customer experience with what’s going to be now Condé Nast Commerce.
IJ: How many products are you thinking about?
FZ: Ideally anything presented in magazines should be able to be purchased. We’re talking about hundreds, thousands of products. If we bring commerce to Condé Nast it means commerce should resemble Condé Nast. We’re not talking about fashion only. It’s beauty, high tech, travel – a very wide range of products. It’s a very large number of categories that should be made available to the readers of the magazines. It should be seen as a service, as something that is brought to the reader as a value-added service.
IJ: We’ve seen models such as readers’ offers in Sunday papers. Publishers have tried at least three times to integrate commerce and content and it’s never worked. When you look back and say the reason it was successful was 'x', what will you say?
FZ: Omnichannel is the ultimate convergence between physical and digital. What we’re building within Condé Nast is that convergence between content and commerce. We need to build this with the help of the editors, we need to build it with the whole editorial teams of those magazines on board. So it is really a process of working with them, and making sure that it is about a very knowing connection between an article and product. Readers’ experience with affiliate marketing is absolutely terrible. I don’t think I’ve ever seen one affiliate integration within content that is actually good for the customer. If it’s not a great customer experience then it’s not going to work.
In the Q&A session that followed, one questioner asked how Condé Nast would close the gap between print and online.
FZ: The problem is not technology, it’s the people. Building a commerce business for a company like Condé Nast, which is really not an ecommerce company to say the least, means we have to build teams able to do this. Building teams means we are actually hiring product people, developers, engineers and UX people.
We are starting this as a new company next to Condé Nast. We are bringing expertise internally to build this. We do need to rely on technology and the best tools we can find in the market. But we do have an advantage over the other players: we are starting very late. We can build something and learn from what everyone else has been doing over the past years. That’s mostly how it usually works, you build something on top of something else. When you build a mobile appication you build it on your ecommerce that you may have implemented three, four, five years ago or even longer. We are building from scratch, building the entire thing on the most recent, advanced technologies, the most efficient methodologies and again, we are relying on people who will be doing this over the next few months.
Another questioner asked how Condé Nast would make this profitable.
FZ: Ecommerce is very down to earth, it’s about getting a product from one point to another, and a lot of very basic things. The reason it’s complex is that every single one of those things need to be executed perfectly. The only way to do it is to bring extremely experienced ecommerce people to deliver that ecommerce vision/project.
IJ: What method do you have other than charm to get an editorial team to want to play in this ecommerce world?
FZ: I’ll just say two things. We need to make them part of this. They need to be onboard from day one, go along with the process, they will be on part of this.
IJ: And if not?
FZ: In the early days of ecommerce, physical retailers didn’t want to hear about ecommerce, they thought it was irrelevant. Because they were commerce. So by the time they actually realised that building a commerce business next to their traditional business and merging them into one big omnichannel business made a lot of sense, because it tries engagement, to build something where everyone does far more. Numbers drive decisions. The only one we need to build this for is the customer.
One questioner asked how Condé Nast would be able to bring its buying cycle and publishing cycles together.
FZ: Most of the things you see in Vogue are not available because they’re on the runway, they haven’t been made for sale. One way of going around that is to make that connection not only between the actual products that you see in magazines and the transaction, but between everything that’s around that. Vogue or any of those magazines are not about product per se as in a catalogue but they are about the entertainment behind the possible transaction that will come afterwards. They are about the magic behind the products. So making that connection between that magic of the product and the transaction, that’s the challenge.
A questioner asked if whether Condé Nast would still expect readers to pay for magazines. “At the moment if I buy one of your magazines, I’m paying. If you’re then running a commerce business off the back of it, will you still expect me to pay, and what am I paying for?”
FZ: You will pay for exactly the same reason you pay now – for the content. You’re not buying it because it has a list of products you can buy, but for what’s written, for the vision it can give you on what’s coming next, and what products you will find in the future. That’s what you pay for.
IJ: When will we see this?
FZ: We are working really, really hard to build this. Today, I can say it will happen, next year.
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