Should publishers sell direct-to-consumer: challenges + opportunities
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Direct to consumer is not for every book publisher. As publishers grapple with the decision of direct to consumer, what are the things to consider? What are the needs? What are the advantages? What are the investments that need to be made? If you choose not to sell direct, what can you do so you are not at a disadvantage? This talk, given at IDPF 2016, discusses some of the pros and cons, the decision-making process, thinking through your value proposition, examples of book publishers selling directly, the data implications, as well as a Sourcebooks case study.
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Should publishers sell direct-to-consumer: challenges + opportunities
- 1. Should Publishers Sell Direct-to-Consumer? Dominique Raccah Publisher and CEO
- 2. Deciding if direct-to-consumer is the right move for you What are the challenges and opportunities?
- 3. Online retail is still around 10% of retail $ in America
- 5. 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:
- 6. Average Number of Retailers in Shoppers’ Networks* Shoppers Eliminate Retailers from Their Networks Streamlining, simplifying, and engaging in “retailer rationalization” Green: Total Retailer Portfolio; all retailers shopped in any given month Blue: 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 sites Source: 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
- 7. 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
- 8. 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 “ ”
- 9. Why Sell Direct-to-Consumer? 01 Generate More Brand Recognition 02 Adding a New Sales Channel 03 Communicate Directly With Your Readers
- 10. Deciding if direct-to-consumer is right for you
- 11. 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?
- 12. 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…
- 13. What Are You Trying to Accomplish Strategically? 01 Brand Awareness/Recognitio n 02 New Sales Channel 03 Selling a product retailers aren’t set up for 04 Build Your Customer List 05 Something else?
- 14. Iterate Model 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.
- 15. How Are You Going to Tackle The Funnel?
- 16. 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!
- 17. Key Strategic Decision Point: How do you add value without directly competing with your retail partners?
- 18. What Is Your Unique Value Proposition? Why should readers buy from you instead of one of your retail partners?
- 19. Some examples…
- 20. F + W Media Many different sites aimed at different enthusiast audiences Books Niche Publications Community Platform Ancillary Products
- 24. Baen Books Baen Books. The best in Science Fiction and Fantasy publishing. Books Sell eARCs Community Platform 416.2K
- 25. Put Me In The Story: A Case Study in Children’s Books
- 26. Could you create additional revenue for bestselling authors and brands through personalized books?
- 30. What Do We Do Now + What Will It Cost = Version 1 + =
- 33. Our Bestselling License Partners Creating a destination site We continue to iterate with our partners to develop the best possible personalized experiences
- 34. Partnerships Within Publishing We continue to iterate with our partners to develop the best possible personalized experiences Creating a destination site
- 35. Creative Partnership New Methods of Customer Acquisition Through Retailer Partnership CONFIDENTIAL
- 36. Barnes and Noble: Immediate in-store experience : Espresso Machine
- 37. Our direct-to-consumer websites are among Sourcebooks’ Top Customers #3 #4
- 38. The #1 Personalized Books Site in America
- 39. The Internet Retailer Top 1000 And the book publishers on it Source: Internet Retailer, May, 2016 #802 #886 #926
- 40. “ ” …nothing says 'transformation' more than revenue sources you didn’t used to have. —Mike Shatzkin, ideolog, Nov. 5, 2015
- 41. Put Me in the Story adds significant value 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00% 100.00% 0 10 20 30 40 50 60 70 80 90 PMITS % of Sales PMITS % of Sales AVERAGE On average Put Me in the Story adds 36% NEW units
- 42. 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
- 43. Put Me in the Story creates additional revenue for bestselling authors and brands through personalized books
- 44. The #1 Personalized Books Site in America Creating an extraordinary customer experience
- 45. How Do You Make Sure You Are Not At A Disadvantage?
- 48. 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?
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