Content and Commerce: Risk and Reward

Marta Wohrle

Monday, February 28, 2011 When I worked in magazines, we talked about such passion points as cars, fashion, cooking. What magazines do very well is address those passion points. When I started my beauty Web site, I assumed it would be similar. But, in fact, it turned out to be something a little different and even more powerful.

There is a strong emotional engagement with beauty products, particularly if they are in the anti-aging niche (coming to terms with looking older is a difficult emotional process for many women). Harnessing that emotional engagement is enabling my Web site to build both a community and an e-commerce business. Members of the community share their skincare concerns and the solutions that they have tried. My job is to create a trusted voice, a fun and informative environment, and a marketplace to find uncommon goods at the best possible price.

Community and commerce is the digital world’s latest buzzword, spurred in large part by the phenomenal success of Groupon and the “members only” model of Gilt, Rue La La and others. Groupon has created a platform for volume discounting and for promoting local businesses. It isn’t exactly a community, however, and there is no engagement between customers and the Groupon brand, or with one another.

When people think of Amazon.com they mostly attribute its success to efficiency of the experience (relevant product recommendations, one click processing etc). But Amazon, I would argue, has actually created a commerce business from good content and community. I buy books almost exclusively on Amazon because of its community of reviewers, as well as the prominence given to the objective and erudite reviews from Publishers’ Weekly (the “trusted voice”).

As a boutique, I go one step further by actively curating. The key is to appear to be not selling so much as sourcing. The content – objective product reviews – serves the purpose of curation by sorting the wheat from the chafe and finding products that can’t always be found in a drugstore, department store or the online equivalents. Creating content that is credible as a curator takes time. It becomes something very valuable, but it isn’t going to make me an overnight sensation.

The commerce side of the business gets results quickly and you can see and pull the levers in real time. There are risks, of course, such as holding too much inventory or having a less than streamlined consumer experience. And without proprietary content, the marketing costs would be very high.

I came across something the other day that Thrillist co-founder Ben Lerer wrote, and it seemed to sum it up, or at least the goal: “So what you get with commerce is more risk with more potential reward. What you get with content is a little less risk and less reward. What I love with the combined content-and-commerce model, then, is that you can package a predictable, high-margin business with a slightly more unpredictable, high-upside business. When you combine them, you have a business that is better prepared to weather storms, grow really fast and -- I think, if you do it right -- have the best of both worlds: huge upside with reduced downside.”

But before I start feeling too smug about this cool business model I have hit upon, I need to keep remembering why my customers come. In the words of one member of the community, “at last I am able to make an informed decision… and you have given me hope.”

Minsider columnist Marta Wohrle is president of Accord Media and the publisher of Truth In Aging, among other digital content titles. Previously she was SVP, digital media, Hachette Filipacchi Media U.S., and director of Mercer Management Consulting.

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