Local retailers need e-commerce, so let’s give it to ’em

The 2015 Top 500 Guide, now in its 12th edition, ranks the 500 leading web merchants in the U.S. and Canada by 2014 online sales and other key metrics. (PRNewsFoto/Internet Retailer)

A recent email from Internet Retailer grabbed my attention.

Its purpose was to plug their new annual Top 500 Guide — a huge directory packed with stats on who’s big in e-commerce, who’s growing market share and who’s not.

But what caught my eye was their take on what’s new in the data.

For years, it said, previous guides had shown big-box stores getting drubbed in e-commerce sales by web-only e-tailers.

“But,” the email said, “…that began changing in 2013, when the chains closed the gap by growing their online sales by 16.7%, taking market share away from manufacturers and catalogers….

“(T)he retail chains grew their share of the e-commerce market again last year by growing their e-retailing operations by expanding and streamlining their online operations and promoting services that allow customers to shop online and pick up or return merchandise in stores.”

There’s more:

“The web sales of the 154 store chains ranked in the 2015 Top 500 Guide grew 16.5% last year, more than a full percentage point faster than the growth of all e-commerce in the U.S. and more than five times the growth rate of sales at retail stores.” (Emphasis added.)

Okay, good for them. They’re fighting hard to beat their internet competition, and they’re showing success.

But for those of us whose paychecks come from local media businesses, there are two big “uh-oh’s” here:

  1. As the big-box stores grow online sales, this could mean further reductions in preprint spending.
  2. As consumers buy more online from the big boxes, they’re likely to shift more spending away from local businesses.

It’s a double-whammy for local media.

We’ve been losing ad dollars from the big local chain stores for years, to the point where local retailers now make up the large majority of revenues for most newspaper companies.

Anything that 1) further reduces chain spending and 2) hurts local retailers demands our close attention.

What are we going to do about it?

If there’s a fix for #1, it’s not obvious. The best we’ve come up with at Morris Publishing Group is a redoubled focus on keeping Sunday and mid-week household preprint distribution penetration high. We’re delivering more and more free “Sunday Select” style packages to households in neighborhoods that the big boxes want. It’s helping, but it’s not enough to offset the declines.

To deal with #2, newspaper companies need to change their game. We’ve got to help our local advertisers fight fire with fire.

Right now, most local retailers aren’t even showing up for the fight.

Some don’t have websites. Among those that do, many aren’t mobile-friendly. And few — whether mobile-friendly or not — are set up to sell products online.

When a consumer does a search for something that’s available from both big boxes and local businesses, she can see the inventory available at the big box, read the descriptions, see the photos, make the purchase online and either have it shipped or pick it up in the store.

If the local retailers even show up in the search, their inventory items usually aren’t shown online. The shopper can’t tell what’s available, can’t see pictures, can’t read descriptions, can’t make purchases. The local retailer only has a shot at getting the business if the consumer has the energy to get in the car, drive to the store and walk around.

And for any retailer who’s depending on that model, recent stats from WD Partners — delivered at a big retailer conference in January — deliver a cruel blow: Consumer in-store visits to retail stores had fallen at least 5% every month for the past 30 months.

For local media, that’s a great tip on a new business model: Developing compelling in-store events for local businesses. I blogged about that in January.

But local retailers need to compete online, too, not just in the store. And that’s where we come in — or could, if we’re willing to branch out into yet another business model.

And we better be willing. If we’re serious about helping local retailers succeed, we need to take them the solutions they most need.flat-buttons

Fifty years ago, print advertising was a pretty complete answer. Today it’s only a small part of what they need, and we need to be deadly serious about learning to provide the others.

To do e-commerce, a local retailer needs to photograph her inventory, write descriptions of it and post all that content on her website. The website needs to be able to display it attractively, and it must have easy-to-use, secure e-commerce sales processing.

It also needs to be promoted effectively on the web, so the shoppable content shows up in searches, in social media and in a good email marketing program.

Most local retailers aren’t doing any of that today. They don’t know how, and they don’t have time to learn. And most feel they don’t have time to do the continual labor required to keep it up.

That’s where we come in.

I believe that every local media business has the opportunity to become an e-commerce agency, providing the know-how, the needed DIY solutions, the hands-on help and the digital marketing that will enable local retailers to get into the game.

On top of that, we need to be creating and marketing our own local e-commerce marketplace, filled with products from local retailers. We need to do that to create wider exposure for them, and to earn a share of each transaction — a new revenue stream for us. And we need to be obsessive about driving traffic to that marketplace from our own high-traffic local websites.

Can we do these things from within our existing sales organizations? Nope. It takes specialists who understand e-commerce. I see us starting small, but gradually developing a local e-commerce agency to provide the tech and marketing solutions local retailers need.

But synergies will happen as our existing sales teams are able to offer these solutions to their customers.

By July, the first of Morris Publishing Group’s 11 local newspaper markets will be up and running. By October, we hope to have the rest in the game — just in time for the Christmas shopping season.

Local media companies don’t have to reinvent the wheel. There are vendors out there who can provide the technology and the online marketing know-how to support those who want to do this.

Our part of it is to take the solution to the streets and show our local retailers what we can do for them.

We’ll be helping to insure our own future, even as we help to insure theirs.

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Posted on June 16, 2015, in Advertising, Audience, Consumer revenue, Content, Digital media sales, Disruption, e-commerce, Media business model, media management, Mobile, Revenue, Sales and tagged , , . Bookmark the permalink. 4 Comments.

  1. Great post, Steve.

    I think you’ve hit on a key opportunity for local media companies.

    By aligning themselves squarely with local businesses, minimizing their reliance on national retailers, and building an online marketplace and tool set, local media companies can build a highly defensible business that can compete with the likes of Google, Facebook and other online marketing opportunities.

    We’ve developed a turn-key model to generate significant recurring revenue while providing the community with a trusted and valued local online resource.

    One of our communities does more than $250k in subscription revenue with one sales rep and less than $10k in annual marketing spend, in a community of 17,500.

    There’s a huge opportunity for local media companies with existing trust, sales & marketing assets and audiences to leverage this model to replace lost print revenue and cement their future in their communities.

    Would love to discuss this further with you Steve and with any of your readers.

    Like

  2. This is excellent, Steve!

    Looking for emerging opportunities like this to help our clients and our communities will be essential to evolving our client relationships from “just another vendor” to a true partnership.

    As trusted partners to our clients, and experts in our industry, it is our responsibility to identify these trends, develop and present a solution to our clients as one component of a robust digital strategy, and customize those solutions to each client’s unique needs.

    Thank you for the insightful post. I look forward to reading more!

    Like

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