Fashion Magazines of the Future

With magazines loosing sales they look for ways to make up revenue. Consumers are tech savvy and are going online for information and shopping. Magazines have great information, but are losing customers who prefer to go online.

Vogue and Elle have long influenced what clothes and handbags image-conscious consumers buy. Now, in a bid to reverse flagging sales and stay relevant, fashion magazines may sell the products they feature in their articles.

As Apple Inc.’s iPad and other mobile devices change the way people stay informed and shop, e-commerce is creeping onto editorial agendas. Fashion magazines that have gone as far as to add links on their websites to online vendors such as Yoox SpA, may integrate the reading and buying experience, a move that would transform the likes of Vogue and Elle from just trendsetters into virtual shopkeepers.

Gone are the days when consumers want to flip through the back of a magazine to find an index. Combining retail and editorial is natural from an economic standpoint and natural from a consumer standpoint.

Hearst Magazines, publisher of Cosmopolitan and Esquire, will introduce a series of e-commerce partnerships this year. Vogue, Conde Nast Publications’ flagship fashion title, allied last month with Yoox, the Italian Internet clothing and accessories retailer.

Fashion magazines, grappling with a slide in circulation and advertising revenue, are looking to claw back ground lost to shopping websites such as Asos Plc and Net-A-Porter, owned by Compagnie Financiere Richemont SA, that are winning sales and influence. Fashion brands are also elbowing their way into the market, introducing digital titles like LVMH Moet Hennessy Louis Vuitton SA has done with Nowness.

About $1.57 billion was spent last year on apparel and accessories ads in U.S. magazines, down from more than $2 billion in 2008, as luxury goods companies cut budgets or put funds elsewhere.

Both Hearst and Conde Nast closed magazines during the global economic crisis. At Time Inc., the publisher of InStyle and Essence, publications’ ad revenue plunged 22 percent in 2009 and rebounded only 3 percent last year. Paris-based Lagardere SCA, which owns Elle, saw a similar weak recovery in 2010 after a 24 percent drop a year earlier.

Fashion magazines’ print circulation is flat or falling as more readers move online. Vogue’s circulation fell 1.5 percent in 2010 to about 1.25 million. Elle’s slid about 0.5 percent to 1.11 million, Audit Bureau of Circulations figures show.

Meanwhile, sites such as Net-A-Porter are gaining ground. Founded in 2000 by former fashion journalist Natalie Massenet, Net-A-Porter was acquired last year by Richemont and features catwalk footage, style tips and designer interviews as well as a catalogue of clothes and accessories.

Turning into e-tailers may be challenging for magazines. In addition to logistical and technological hurdles, magazines may have to contend with an erosion of editorial independence. Fully integrating shopping into editorial content would mean allowing readers to jump from a handbag or shoe in a photo spread to a page offering it for sale in a single click, rather than forwarding them elsewhere for purchases.

Adding content to e-commerce is easier than adding e-commerce to content. EBay Inc. hired a former editor at Conde Nast’s Lucky and Heart’s Harper’s Bazaar magazines as creative director for its fashion portal. Building the logistics and technology required for e-commerce would be a substantial challenge for Vogue. Vogue isn’t built to sell products. That partly explains why magazines haven’t done more than add links to fashion brands’ e-commerce websites.

Harper’s Bazaar partnered with Net-A-Porter last fall to pick out bags, shoes and clothing available from the shopping site with a single click. Vogue Italia and Yoox followed last month, focusing on products by young designers that could be bought from Yoox’s multi-brand shopping site thecorner.com. It’s not clear how revenue from the online transactions will be divided between the partners.

Because readers trust recommendations by magazines, they have to find the proper ways to monetize that. Yoox will benefit from increasing e-commerce and luxury demand growth because of rising global wealth.

Determining who gets control of or access to user information, credit-card details, addresses, and surfing and shopping histories that can be used to target advertising and offers, may represent a major hurdle. Retaining data from a significant number of people means you’re in business for anything you want to sell.


It is too early to tell if e-commerce is the magic answer to lost magazine revenue. It is clear that this cannot be the sole initiative by magazines. They must diversify their strategies to keep up with technology and the advanced consumer.

comScore: $20 Billion In Holiday E-Commerce So Far

BizReport

The holiday shopping season continues chugging forward and etailers continue to reap the benefits. According to the latest numbers from metrics firm comScore the online holiday spend is nearly $20 billion with almost two full shopping weeks until the big day. So far this holiday season ecommerce has grown by 4%.

The official total is $19.9 billion and both Cyber Monday (November 30) and Thursday, December 10 saw shopping revenues reach $887 million and $853 million respectively. Some experts expect to see a new all-time high for single day online shopping (more than $900 million) before the holiday season ends.

"Although this most recent week of holiday shopping did not produce the first $900 million spending day, we saw above average growth rates including a strong end to the week," said comScore chairman Gian Fulgoni. "Monday, December 14 - otherwise known as Green Monday - is likely to produce our heaviest online spending total for the season and represents our best opportunity to finally surpass that elusive $900 million spending threshold. The early part of this upcoming week should bring us the heaviest online spending days of the season before consumers refocus their attention on brick-and-mortar retail locations to finish up their holiday shopping."

That $900 million day could happen this Monday, December 14. The Monday ten days prior to Christmas Day, traditionally called Green Monday, has been the highest spending day for the past few years.

The days immediately after Christmas and New Year's also often see a spur in retail sales driven by the demand for household durables such as Christmas tree storage bags.

This holiday season has also seen more European consumers hit online shopping hubs than in previous years. According to the report ecommerce site visits increased by about 35% in the UK (Month of November), by 39% in France and by 17% in Germany.

GSIC: Minding The Store For Toys 'R' Us

Business Week

Parents who shop on Toysrus.com this holiday season likely won't know that a company called GSI Commerce (GSIC) is managing the orders behind the scenes. But GSI is ubiquitous: It runs retail Web sites for some 100 brands, including the NFL, Bath & Body Works, Ralph Lauren (RL), Aeropostale (ARO), and Toys "R" Us. All told, the company processes $3 billion in annual sales, from which it takes a commission.

GSI Commerce, based in King of Prussia, Pa., may be invisible to shoppers, but it's attracting attention on Wall Street. Over the past 12 months the company's stock has shot up 236% as its founder and chief executive, Michael G. Rubin, has gone on an acquisitions rampage. GSI, which lost $16.9 million on nearly $967 million in revenue in 2008, now has $242 million in debt. While the company has been profitable in the past, analysts expect it to lose money again this year. But the 37-year-old Rubin, who practically grew up running the place and saw the company through the 2001 dot-com bust, insists he has no choice but to keep growing. His goal is to make GSI one of the biggest Web retailing companies in the world. Skeptics wonder if the bets will pay off.

While his footwear brands would never rival Reebok or Nike, e-commerce was still anyone's game

Many chief executives say they feel personally enmeshed in their company's fate, but few can say they've felt that way since age 12. That's when Rubin started the business that eventually became GSI, adjusting and fitting customers' skis out of his suburban Philadelphia basement. By age 22, he had enough cash to acquire two small shoe brands, which he sold through major sporting goods chains.

It wasn't until 1998, after hearing his sporting goods clients worry about the complexity of selling products online, that Rubin says he recognized his "huge opportunity." While his footwear brands would never rival Reebok or Nike (NKE), e-commerce was still anyone's game. "It was the first time I could be No. 1 in a market," he says. Rubin sold the footwear brands and, under the name Global Sports, persuaded his clients to let him manage their Web stores.

Most of GSI's clients are traditional retailers who ring up only 5% to 10% of their sales online. But Rubin believes that online sales will become a bigger part of their businesses and that retailers will still pay someone else to handle plenty of complex Web tasks. So in addition to opening offices overseas, Rubin has bought an array of Internet service businesses over the past two years, including an e-mail marketing company, an affiliate marketer (it recruits people to drive sales to clients' sites in return for a commission), and a Web design firm, which he uses to bolster an interactive marketing agency. On Oct. 27, GSI agreed to spend up to $350 million in cash and stock to acquire Retail Convergence, which owns the sites Rue La La and SmartBargains.com, giving clients an easy way to liquidate slow-moving inventory.

Customers seem satisfied. Greg Ahearn, e-commerce czar at Toys "R" Us, worries about GSI's expansion plans. But that didn't stop his company from re-upping with GSI through 2019. General Nutrition Centers, Ralph Lauren, and Dick's Sporting Goods have renewed their contracts, too.

All the same, trouble may be brewing on Wall Street. After GSI's heady performance this year, short sellers are gathering: A full 15% of shares available for public trading have been sold short. Rubin is unperturbed. While GSI will continue to lose money, he says, it remains cash-flow positive. "We think of ourselves as the worldwide leader of e-commerce for consumer brands," says Rubin. "And this is just the first quarter of the football game."

Internet economy could shrink in 2009: OECD

As posted by: AFP

PARIS (AFP) - The Internet economy could shrink in 2009 because of the worldwide downturn, the OECD warned Monday in a report that forecast contraction of the semiconductor industry and cutbacks by corporate customers.

The Paris-based Organisation for Economic Co-operation and Development said that "with the outlook for the global economy worsening and business and consumer confidence plummeting, growth will remain flat or decline in 2009."

The report also forecast growth of four percent in the IT industry this year and said some sectors such as software, outsourcing, Internet sales and infrastructure investments would "weather the storm better than others."

The report said the semiconductor industry -- seen as a leading indicator for the information technology sector -- would fall nearly six percent in 2009 after weak growth of 2.2 percent in 2008.