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.
