should publishers sell direct-to-consumer: challenges + opportunities
TRANSCRIPT
Should Publishers Sell Direct-to-Consumer?
Dominique RaccahPublisher and CEO
Deciding if direct-to-consumer is the right move
for you
What are the challenges and opportunities?
Online retail is still
around 10% of retail $ in
America
Book Busines
s Magazin
e Survey
Shoppers’ Top Priorities
Spending as little as possible Feeling like I got a good deal Having a stress-free experience Doing all/most shopping in one place Completing my shopping quickly
Omni-Channel is shaping what’s important:
Average Number of Retailers in Shoppers’ Networks*
Shoppers Eliminate Retailers from Their NetworksSTREAMLINING, SIMPLIFYING, AND ENGAGING IN “RETAILER RATIONALIZATION”
GREEN: TOTAL RETAILER PORTFOLIO; ALL RETAILERS SHOPPED IN ANY GIVEN MONTHBLUE: CORE RETAILER PORTFOLIO; RETAILERS SHOPPED EVERY MONTH, AT LEAST ONCE A MONTH, ON AN ONGOING BASIS
*INCLUSIVE OF VISITS TO STORES AND ONLINE SHOPPING WEB SITESSOURCE: KANTAR RETAIL SHOPPERSCAPE®, JANUARY–SEPTEMBER 2007, 2013, 2014
Total
12.4 5.8
Core
10.7 5.0
Total Core Total Core
9.7 4.6
Online, Especially Prime, Resets Shopper Expectations Across Retail
Penetration of Amazon Prime Membership(among all U.S, primary household shoppers)
How Prime Membership Changes Shopping Patterns
(among all Prime Members)
Source: Kantar Retail ShopperScape®, December 2011–2014, Kantar Retail estimates
Source: Kantar Retail ShopperScape®, December 2014
It’s very, very hard to create a destination site because we
don’t represent the entirety of the market.
Chantal Restivo-Alessi, Chief Digital Officer, HarperCollins
“”
Why Sell Direct-to-Consumer?
01 Generate More Brand Recognition
02 Adding a New Sales Channel 03 Communicate
Directly With Your Readers
Deciding if direct-to-consumer is right for you
What Are You Currently Doing?
What are your current capabilities?
How do you currently sell to and communicate with your
readers/customers?
Do you have a cart on your website?
Do you have someone who manages your website?
Do you have someone who looks at and interprets web analytics?
What Can You Afford To Do?Do you have someone who…
Can manage an ecommerce
website?
Knows Google Analytics?
Knows SEO? Knows about paid search?
Will be looking at the metrics to
optimize the site?
Can run an email marketing program?
“If we were to go direct-to-consumer, what additional tools, software, people, or knowledge
would we need? How much would it cost?”
These things don’t have to cost a lot of money, but they do cost time and knowledge. And they take time to ramp up…
What Are You Trying to Accomplish Strategically?
01 Brand Awareness/Recognition
02 New Sales Channel 03 Selling a product retailers aren’t set up for
04 Build Your Customer List 05 Something else?
IterateModel that’s different from traditional book publishing
Look at your metrics.
Listen to your customers.
Experiment and test based on what the data and your customers are telling you.
Then do it all over again.
How Are You Going to Tackle The Funnel?
The Conversion Funnel—Creating a Sale
Do they know about you?Do you have something that would interest them?Would they spend money on it?Purchase made, customer acquired!
Key Strategic Decision Point:How do you add value
without directly competing with your retail partners?
What Is Your Unique Value Proposition?
Why should readers buy
from you instead of one of your retail
partners?
Some examples…
F + W MediaMany different sites aimed at different enthusiast
audiencesBooks
Niche Publication
s
Community
Platform
Ancillary
Products
O’ReillyFiction Publisher
Books
Training
Events
Daily Deals
5.50M
Hay HouseNonfiction Publisher
Books
Training
Events
Ancillary
Products
532K
Berrett-Koehler PublishersNonfiction Publisher
Books
Digital Subscription Service
Community Center
55.7K
Baen BooksBaen Books. The best in Science Fiction and Fantasy publishing.
Books
Sell eARCs
Community
Platform
416.2K
Put Me In The Story:A Case Study in Children’s
Books
Could you create additional revenue for bestselling authors and brands
through personalized books?
How We Started
Marianne Richmon
dGregLang
“”
innovation is
iterationMichael Cader BISG Making
Information Pay 2008
The Lean Startup Model
What Do We Do Now + What Will It Cost = Version 1
+ =
Iterate—Creating a Keepsake
Developed in-
houseControl of
the Experienc
e
107.1K
Our Bestselling License Partners
Creating a
destination site
We continue to iterate with our partners to develop the best possible personalized experiences
Partnerships Within PublishingWe continue to iterate with our partners to develop the best possible personalized
experiences
Creating a
destination site
Creative PartnershipNew Methods of Customer Acquisition Through Retailer Partnership
CONFIDENTIAL
Barnes and Noble: Immediate in-store experience : Espresso Machine
Our direct-to-consumer websites are among Sourcebooks’ Top Customers
#3
#4
The #1 Personalized Books Site in America
The Internet Retailer Top 1000And the book publishers on it
Source: Internet Retailer, May, 2016
#802
#886
#926
“”
…nothing says 'transformation' more than revenue sources you didn’t used to have.
—Mike Shatzkin, ideolog, Nov. 5, 2015
Put Me in the Story adds significant value
0 10 20 30 40 50 60 70 80 900.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
PMITS % of Sales
PMITS % of Sales
AVERAGE 36%
On average Put Me in the Story
adds 36% NEW units
How Put Me in the Story Creates Value For
Authors, Agents, and Publishers
Creating a new channel for picture books, illustrated books, gift books for all occasions and non-book
products
Higher price point: $24.99-$39.99
Incremental sales dollars! Data indicates that our online
marketing of personalized books is lifting retail sales of non-personalized versions of those books (tens of millions of impressions in Q4)
As well as adding additional units
Put Me in the Story creates additional revenue for bestselling authors and brands through personalized books
The #1 Personalized Books Site in America
Creating an extraordinary customer experience
How Do You Make Sure You Are Not At A Disadvantage?
Data and Experimentation
eMail Marketin
g
Marketing Spend
Publicity
Metadata: Price
Metadata: Descriptio
n
Metadata: Covers
Metadata: Keywords
Should publishers sell direct-to-consumer?
Key Points to Consider
CONFIDENTIAL
1. What are you trying to accomplish, strategically?
2. What unique value are you adding?3. How are you going to tackle the conversion
funnel?4. What are your current capabilities?5. What can you afford to invest?