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Analysis of ShopVogue.com

Vogue_march_2ShopVogue.com launched featuring 204 ad pages. Barneys New York, Target, and Kohls were the largest retailers among the participants.

In a nod to product placement, the Kohl's ShopVogue page tries to let browsers link to 22 different products featured in their three ad pages. Instead of product information, however, I got sent to Kohl's store locator.

Target itself had an 8 pages "insert" to push its Isaac Mizrahi line.

Assuming that the ratio of ad pages to editorial remained constant from March 2004 to March 2005, then there are 461 ad pages - up from 454 ad pages a year ago. This appears to be just over a 1% increase, or just under $1 million in new ad revenues. In a year without Olympics and politics, that's a pretty good performance.

If you're in advertising sales, this provides a nice opening for you to call up some of the accounts you haven't talked to in a while.

Link: Revisiting Shop September Vogue

Department Store Custom Publishing

ThisitOn the heels of the Federated-Macy's acquisition of its rival May Company comes coverage in the New York Times of Macy's launch of ThisIt.com, a teen micro-site. The content provides guides on fashion, music, and suggestions on how to make the most from the Macy's e-commerce site. Content is licensed from Teen Vogue and Universal Music Group. (click on the image for a larger view)

In my view, this has several implications. First, regional department store brands like Burdine's, Von Maur, and Lazarus are being phased out in favor of a single unified brand like Macy's. I never thought consumers really understood the difference between Macy's East and Macy's West, and even remixed brand names like Lazarus-Macy's, Bon-Macy's and Rich's-Macy's seemed a little forced.

Second, the involvement of Teen Vogue shows the power of custom publishing. Teens are clearly a sweet spot where retail and media content collide, but after you explore this example, one could see how online shopping guides like ThisIt could be created based on other traditional print titles like Elle, Lucky or Maxim. A separate site also creates distance from the main brand, and provides opportunities to take creative risks that a Macy's could never take. In a rapidly-evolving media world, this gives Macy's the ability to explore new store formats with the same speed that Lloyd Braun is able to explore new Yahoo! media partnerships.

Third, this kind of innovation isn't limited to Macy's. If you visit http://vogue.jerseygardens.com/, a web site maintained by Mallfinder Network, you can see how blogging print articles can help create awareness of certain stores within a traditional shopping mall. For this reason I believe there is an emerging sweet spot encompassing retail, blogs, and custom publishing. The reason for this is market intelligence. Since last year, hotels like Fairmont have stepped up their efforts to understand their customer. Teen consumer research leader Alloy Marketing has chosen to shift its focus from online retail to its message boards, polls and search results, and soon, RFID.

(Disclosure: I founded Mallfinder Network and developed the idea of combining print media content with mall property web sites.)

New Revenue Opportunities for Malls

Cellphone_2As mall managers like Simon Property Group look to new revenue opportunities like billboards, sponsorship consultancy IEG used its 20 years of knowledge and editorial research to identify emerging sponsorship categories. Specialty leasing managers looking to make their numbers may want to keep these ideas in their arsenal:

  • Cruise Lines. Malls can collect email addresses at a specialty kiosk, and publish a semi-monthly custom newsletter that promotes fun experiences at selected destinations.  
  • Satellite Radio. Sirius (1.2 million subscribers) and XM (2.5 million subscribers) are battling for subscribers as they experience explosive growth. IEG editor Kevin Knapp notes Sirius is more active in sponsorships as it tries to catch up on XM's head start. Demonstrating satellite radio in the mall - in particular some of the smaller, more portable units - is a natural fit.
  • Photography. Forty-two percent of U.S. households own a digital camera. Kodak is on an ambitious effort to reclaim leadership. Mall sites like Whatzbuzzin could feature consumer-generated photographs of cool products that are sold at the mall.
  • Telecommunications. The VOIP war between AT&T and Vonage is about to be joined by even more competitors. Just as Time Warner was successful in using malls to demo its Road Runner cable modem product in markets like Tampa, use that experience to sell Vonage on a long-term lease.
  • Dot Coms. "The industry saw the demise of sponsorships on behalf of dot-coms a few years ago, but it is coming back," says Chipps. Active areas include online travel, dating services and social networking. As use of texting goes up, services in these areas will look to demonstrate SMS functionality.

Malls should also rethink about how they use their web sites, email and IVR systems as an adjunct to their in-mall signage to create even more saleable inventory.

From MIT Media Lab: Wireless Insights for Luxury Brands

NegroponteNicholas Negroponte stated that "The killer application in mobile service is decided by response time," going on to suggest that wireless handset manufacturers should embrace Swatch's concept of the second watch. (Swatch had decided to rethink the definition of a watch from the ground up, rather than bolting on additional functionality.)

Too many think that for luxury brands like Gucci to become more profitable they must invest in supply chain software and improve manufacturing efficiencies. This kind of lateral thinking is an example of trying to apply the lessons of Banana Republic to a Balenciaga. Unlike mass prestige brands like Banana Republic, brands like Alexander McQueen, Stella McCartney and Bottega Veneta are all about clientele marketing - which I define as "making sure you have local brand ambassadors that earn their way to becoming trusted confidantes of the most discerning customers."

In this context, luxury brands should be asking the wireless carriers how they can improve the ability of their local associates to respond more quickly to the needs of their clientele. How can retailers on Fifth Avenue or Rodeo Drive use this technology to provide VIP service to their very best customers?

It sure doesn't fit the classic model of trying to crank out as many handsets as possible from the same master mold, but it is a daring vision of what the world could be...and may ultimately pave the way for a more profitable relationship.

As T.S. Eliot once said, only those who risk going too far can possibly find out how far one can go.

Link: Negroponte Interview in Telecoms Korea (subscription required)

Continue reading "From MIT Media Lab: Wireless Insights for Luxury Brands" »

Search Behavior: Lucky No. 13

ClickzOn the eve of the Search Engines Strategies conference in New York comes new research that shows that consumers who ultimately purchased a product online conducted some 13 searches before ever making the purchase.

The majority of searchers in the study who ultimately purchased began by searching broader terms. Yet most search advertisers still believe they should primarily buy product-specific terms to reach buyers. Instead, it shows that most people search for broad terms like "camera", "computer", and "MP3 player" when making their decision. This is the first study that debunks the "search funnel" thinking that search engines needed to support increasingly specific search terms.

This study suggests that mall management companies like General Growth and Westcor, who have featured store search on their mall sites, would satisfy more customers if they would add information on where to buy products, without having to add information on specific brands or product SKUs.

Link: Clickz Article

In Memoriam: David F. Bradford, 1939 - 2005

David_bradfordThe New York Times published an obituary for David Bradford, widely described as an innovator in tax policy. He sought to find new ways of equitable tax, not only through his X Tax (essentially a flat tax that targeted spending, exempting savings) and through thoughtful analysis (Adobe Acrobat required) of how the goals of the Kyoto Protocols could be achieved through less draconian measures.

An expert on taxation issues, Bradford served under Presidents Ford, Reagan and George H.W. Bush. He was a member of Bush's Council of Economic Advisors from 1991 to 1993 and was deputy assistant secretary for tax policy in the Treasury Department in 1975 and 1976.

While at Treasury, Bradford played a key role in the study that resulted in the publication of "Blueprints for Basic Tax Reform," regarded as a precursor to the major income tax reforms enacted in 1986. "David's creative ideas have profoundly shaped tax reform," said Martin Feldstein, the Harvard economics professor and president of the National Bureau of Economic Research.

With cities and states facing an uncertain tax future (WSJ subscription required), people like David Bradford are in short supply.

On Rotisserie Chicken and Flavored Search

The New York Times featured America's growing passion for roast chicken: Zankou's garlic-flecked Armenian chicken in Los Angeles; Chicago's famous Brasa Roja's chickens with con más salsa verde, and in Dallas, Cowboy Chicken uses leftovers from its hickory wood-roasted chickens for delicious Tex-Mex enchiladas.

For Google to grok 'Roast Chicken' in all of its delicious fullness, there are few purely online game plans. Instead, Google would need to survey receipt data from restaurants and grocery stores across the country.

Just as "roast chicken" means different things in different places, so too do definitions of luxury. Haute couture - and all that comes with it - means something different on Michigan Avenue in Chicago than in Oklahoma City. Shopping centers, their retailers and associated brands are useful proxies for "thin slicing" what luxury means in various locales. (see the book Blink for more on 'thin slicing')

As Google, MSN and others press forward with their local search plans, such proxies are going to be increasingly useful data sources, helping to ensure search quality.

Guide Michelin vs NYT/About

Michelin_nyFor all of our seeming differences, we and the French really are like deux pois dans une cosse - peas in a pod. Michelin announced its plans for a New York version of its famous guide, scouring 1200 restaurants and dozens of hotels to find those establishments worthy of one, two or three stars. Michelin executives note:

"The places that make the cut for the final 500 will be revisited at least once more. After an inspector has completed his dining visits, another inspector follows up, presents his calling card, asks to see the kitchen and obtains more details. Hotel inspectors request a backstairs tour after having paid their bills." (emphasis added)

I think what we are seeing here, as we may be seeing with the New York Time's purchase of About.com, is the rise of something that is half mainstream media, half blogging and perhaps a frisson of the controversial Marqui Payblogger program: paid analysts. I have to believe that one of the initiatives of the New York Times/About program will be to aggressively shore up traditional newspaper strengths, such as restaurant reviews.

It appears from reading the coverage that Michelin thinks American reviewers - like Zagats - focus too much on decor and not enough on the gastronomic experience. With an explosion of choices, both online and off, there is a huge need for tools that help brands with reputation management. Shopping destinations, media companies, and bloggers alike - can do this, but only if consumers know exactly what they stand for.

Links: PaidContent's coverage of New York Time's purchase of About.com; New York Times article on Michelin NYC (registration required)

Acting Like Teenagers

Matrix_phone_1The availability of color screens and cameras and ringtones on phones are making otherwise well-behaved adults act like, well, teenagers. And it seems that the new shenanigans enabled by this technology are not limited to impish pranks.   

The Mobile Technology Weblog was the first place I read about the Shag Phone:

"I heard someone (honest) talking about their 'shag phone' the other day. He was a married man having an affair with a lady who was also married. It seems that one of the first heady rituals of the affair was to purchase a 'his and her, pair of pre-pay shag phones."

"...Only they knew each other's number, so when the phone rang, they could answer in an appropriately passionate way. While much the same effect could be achieved with caller recognition (assuming they were mobile literate), there was more than just a romantic gesture involved with this behaviour."

Any boss watching their corporate intranet traffic understands that younger workers gravitate towards sites like Match.com and sites for TV shows like The Bachelor. Indeed, dating-related applications seem to be the fuel driving much of the SMS growth in the United States, and indeed have become a substitute for the news for many young adults.

This example shows that matchmaking applications aren't limited to clumsy adaptations of existing personal classifieds. There are lots of creative ways to bring people together, and perhaps as we design these services we can find new ways to incent people to spend more time with us and perhaps buy a few things while they're getting to know each other.

But it's important that would-be mobile app developers understand that no carrier wants to be the target of any negativity arising from these applications. While they like incremental revenues, it's nothing if it costs them subscribers.

The Second Life of Content: The NYT/About Deal

AboutJay Rosen's done a bang-up analysis of the NYTimes/About deal. I'd like to highlight a point he makes about content economics:

"...The second life of content, made possible by search, is of critical importance to journalists whose work is on the Web. (That's almost all journalists.) The very phrase 'on' the Web tells us that things may land on the surface of the network and not get woven into it. These stand a very poor chance of surviving and having a second life, where there are probably more readers available than in the first."

In other words, the purchase of About is going to let the New York Times develop new ways to resell existing content.

This is huge.

I'm reminded of what happened when movie studios really started to understand VHS: the arguments suddenly switched from "are consumers going to prefer recording their TV shows on VHS or Betamax?" to "How quickly can I move my most popular movies onto videotape, and by doing so, make even more money for my shareholders?" It's amazing what kind of value you can unlock once you start asking the right questions.

Microsoft has delivered outstanding returns to its shareholders by finding new ways to repackage the same code, over and over. While some of its efforts never saw commercial success (such as a real-time energy pricing trial with PG&E that I managed back in 1994), this template for success is one I'm glad to see the New York Times emulate.

I'll know the other shoe is about to drop when the New York Times starts to revisit how NYT/About content could be used in custom publishing.

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