Q&A: CRO Pamela Drucker Mann on Conde's New Structure
Excerpts from a Fashion Week Daily Q&A with Pamela Drucker Mann, chief revenue and marketing officer at Condé Nast: On Condé's new structure: "At our corporate summit in November, we made a big statement that we were transitioning from a publishing company to a full-fledged media company. We make a lot of content for our owned-and-operated platforms, but we also make a ton of content for Facebook and Instagram. We’re YouTube’s biggest content partners. So we needed to create a structure that matched the way we were connecting with our audiences every day. I wanted the person who was running fashion for the company to be able to go to see one client and talk about 10 things, as opposed to 10 different people from my company going to the same client to talk about those same 10 things. So we organized our company by three divisions, and now we have three CBOs--chief business officers--who manage a collection of brands... Look at them as brand managers. They’re creating the go-to markets; they’re like the faces of the brands. Susan Plagemann runs style—she’s got Vogue, GQ, Glamour, W, Brides, and Allure. Separate of that, she runs beauty and fashion on behalf of the entire company. She’s talking to the CEO of Gucci all the time, and what a great opportunity for her to share with the CEO of Gucci all the ways that our company can be a better partner. The CBO who runs Bon Appétit also happens to own the home and [consumer packaged goods] categories. We can also bring scale as an advantage to a lot of the new ways that we’re working with our partners. So we just move a lot faster. I can use the word “agile,” and it actually is a real thing." On the current trends/buzzwords: "Marketers are realizing that technology is enabling them to get closer to their consumer than ever before, but what do you say to them when you get in front of them? I was at CES [the Consumer Electronics Show] in Las Vegas, and there was a massive discussion about how when content is not scarce, the scarcity becomes good content. “Content” isn’t just about the content we make; it’s also the content our advertisers make. What does it really mean to earn attention? You’re seeing a different approach and a different level of investment. Of course, people are still talking about safety and data breach, and how the customer feels about that." On Condé's video business: "We launched our entertainment division five years ago, and we were nowhere. By the way, the marketplace wasn’t a big digital world yet. YouTube had a huge head start, especially around user-generated content. If you think about digital video content in general, it wasn’t really good content... The video digital space is getting a lot more competitive, which is way better for users. Consumer habits are changing, and we’re getting more comfortable with watching long-form content on our smartphones. We just completed our first upfront, and we’re competing with all the broadcast networks for the first time. We’re not trying to be the biggest; we’re trying to be the best."
Non-Food Magazines Offer Dining Experiences As New Revenue Channel
Folio: "Presented with the opportunity to create new lines of business by expanding their brands into real-world dining experiences, Garden & Gun, Time Out Group and Vice Media went all-in creating a restaurant, a cultural market and a food hall, respectively. So far, the Garden & Gun Club, which opened its doors in April 2018, and the Time Out Market in Lisbon, which launched in 2014 and is soon to be followed by five more locations this year, have been successful in terms of driving revenue for their respective brands, and serving as another, deeper touchpoint for audience engagement.Based on partner interest already, John Martin, publisher of Vice Media’s Munchies vertical, expects that the Munchies Food Hall, set to open in April of this year, will not only serve as a strong revenue stream, but it will put the Munchies brand in front of millions more eyeballs than they currently experience.The Munchies Food Hall will exist within the American Dream mall—whose long-awaited opening in New Jersey’s Meadowlands Sports Complex is scheduled for April—and will serve as the retail center’s high-end dining option"... In-depth article details how the ventures were created, investments required, and business models.
Atlantic Study: Gen Z, Millennials Have Different Media Preferences
MediaPost: "A message to media brands and advertisers: millennials and Gen Z are not the same audience.That’s based on a new study conducted by The Atlantic’s creative marketing group, Atlantic Re:think, in partnership with Comscore and Harvard College Consulting Group.The study found media that appeals to millennials (25- to-39-year-olds) does not do the same for the next generation (18- to-24-year-olds).The goal of the white paper ("Gen Z Doesn't Love You...Yet") was to showcase Gen Z’s preferences as a user, consumer and decision maker. Gen Z-ers actually reported twice the favorability for news outlets established before 2000 than for emerging media companies. The 13 outlets mentioned in the study included The Atlantic, The New York Times, The New Yorker, Time, Washington Post, WSJ and CNN, as well as BuzzFeed, HuffPost, Cheddar, The Outline, Ozy and The Intercept. One respondent noted: 'Some of the more Gen Z oriented news sources are pretty patronizing…in a way that presumes that people who are young are also stupid.' Gen Z-ers' content and format preferences when interacting with their favorite news media brands also differ from millennials.' They are more likely to interact with video, have a greater affinity for art and design, entertainment and advice content, and less affinity for sports content. Gen Z has higher expectations for media brands than millennials, and they are less likely to be brand loyal. 82% of Gen Z respondents said social responsibility was a very important or important characteristic of their favorite brands. When discovering new brands, Gen Z is most influenced by a recommendation from a friend or peer (55%) and a brand’s social media activity (48%). Influencers held more sway than celebrities (36% vs. 24%), but both were more important for Gen Z than for millennials. And the younger generation has more of an eye for diversity: 61% are more likely to buy brands that have spokespeople who are diverse (vs. 52% of millennials). When it comes to sharing their data online, 42% of Gen Z-ers called privacy “very important,” compared to 54% of millennials. The study surveyed 1,000 Gen Z-ers and 1,000 millennials, and conducted focus groups and interviews with 10+ students at Harvard and surrounding colleges between October and November 2018."
Rachael Ray Releases 2nd 'Like A Boss' Issue
Release: Rachael Ray Every Day's second annual "Like A Boss" issue will hit newsstands tomorrow. This year's issue "highlights women shaping the food and beverage industry this year, including chefs, bartenders, business owners, bakers and more. The cover stars, along with Rachael Ray, are Daniela Soto-Innes (of Cosme and ATLA in New York City), Anita Jaisinghani (of Pondicheri in Houston and New York), Nyesha Arrington (of Native in Santa Monica, California), and Angie Mar (of the Beatrice Inn in New York)." To promote the issue, Rachael Ray will host a panel discussion on women in food on February 27 at Pondicheri in New York City... Like last year, the South Carolina Tourism Board is a marketing partner for the issue.
The brand is encouraging readers to post pictures supporting women in the food industry on Instagram with the hashtags #LikeABossEveryDay and #RRMagFan, go to a female-owned restaurant or bar, and post tributes to (or photos of products made by) friends in the food industry.
U.K. Titles Show Largely Stable to Up Print Circ
WWD: "Digital circulation continues to grow, as print remains relatively stable at the big British magazine publishers, according to the latest round of figures from the U.K.’s Audit Bureau of Circulations. In the July to December 2018 period, Condé Nast reported an increase in its circulation figures, with British Vogue witnessing a 1.1% increase in combined print and digital circulation to 192,152. Tatler’s combined print and digital circulation reached 79,029, a 1.2%t increase YoY. By contrast, British GQ saw a slump in total print and digital circulation figures of 4.3% YoY to 110,063. Condé said the title had struggled with its print performance on newsstands. “Even as our digital and events audiences expand, it is gratifying to still see a solid aggregate print circulation across the business, with subscription growth helping to offset a difficult newsstand environment,” said Condé Nast Britain managing director Albert Read. Condé Nast Traveller saw its circulation figure climb 3.7 percent to 81,002 in the period, while Vanity Fair declined 2.7% YoY to 70,080. Elsewhere, Elle witnessed a 6.9% growth in the July to December period with a combined circulation figure of 162,243, while Harper’s Bazaar remained largely flat, with a 0.5% YoY increase to 116,339. Cosmopolitan saw a significant drop in combined circulation figures of 20.6%. According to Hearst U.K., this was due to the price of the monthly glossy having doubled from one pound to two pounds. 'Our print ABC is positive for us, our total audience reached 14.2M per month. I’m delighted that our total revenue is in growth, Hearst continues to go from strength to strength,' said James Wildman, CEO of Hearst U.K."...
Roitfeld Pulling Back from Running CR Magazines
WWD: "Carine Roitfeld is letting a new generation take the reins of the magazine she founded. Mostly. Like the new logo for the biannual CR Fashion Book print magazine Roitfeld founded in 2012 after leaving French Vogue and has been the lead editor and stylist of since — now a much smaller, more refined “CR” that hovers in the top left corner after being a nearly cover-size signature — Roitfeld is reducing her role, and will now oversee editorial after years of leading it. Vague as that description may be, the fact is Roitfeld doesn’t actually have a new title and there is no one replacing her as editor. But she will be doing far less styling of shoots (she only did one for the upcoming spring/summer issue; before she did all of them) and curation of magazine editorial going forward. Instead, Roitfeld will focus more on other projects, like collaborations and work for a growing roster of clients for her creative studio and brand consultancy CR Studio. There’s Chanel and Karl Lagerfeld and Tom Ford, of course, but also a recent campaign for Jordache, which Roitfeld handled from beginning to end"...
Forbes Launches Blockchain/Crypto Newsletter
MediaPost: "Earlier this year, Forbes began to send a new premium-subscription digital newsletter called Forbes CryptoAsset & Blockchain to select Forbes customers with the intent of deepening its blockchain coverage and further establishing itself as a voice in the field.The newsletter is edited by Jack Tatar, an investor and co-author of “CryptoAssets: The Innovative Investor’s Guide to Bitcoin and Beyond.” Forbes’ stable of journalists will contribute to the monthly publication, interviewing notables from the field like Ripple’s CTO David Schwartz, cofounder and CEO of Zcash Zooko Wilcox, and Morgan Creek Capital’s Mark Yusko. The newsletter costs $595 a year or $195 a quarter, and is not supported by advertising. It's "geared toward educating potential investors in blockchain and crypto, and the goal is to provide actionable and profitable advice,' says Matt Schifrin, VP and managing editor of Money & Markets at Forbes. In the coming months, said Schifrin, the outlet will publish its first-ever Forbes Blockchain 50 list that covers the most important companies in the space. Schifrin said. “As crypto-mania subsides, we believe many of the biggest advances in blockchain technology will come from enterprises that have been quietly embracing this nascent technology.”Nina La France, senior vice president of consumer marketing and business development at Forbes, reports that early engagement with the first issue is high and retention among the first batch of subscribers is solid. Soon, Forbes will roll out marketing campaigns across email, social, webinars, Forbes.com and the magazine to attract new newsletter subscribers."
Media Industry Job Cuts Jumped Last Year
WWD: "Companies operating in news, broadcast news and publishing, television and film and music cut just under 15,500 jobs last year, an increase of 281 percent over 2017 when 4,060 jobs were cut, making it the worst year for jobs in the industry since 2009, according to a study from industry outplacement firm Challenger Gray & Christmas Inc. In 2009, media companies cut about 22,350 jobs.As though news hasn’t had a hard enough time of it in the last decade, the study found that roughly 11,880 of the jobs cut last year were in news organizations alone. This year could be another record of cuts, as already newspapers and digital media companies like Vice and Buzzfeed have revealed layoffs totaling more than 2,000. In January alone, announced job cuts were already up 49.6 percent compared to the beginning of 2018, according to Challenger Gray. Challenger pointed to issues news publishers face in building revenue, like ad-blockers and the ability of Google and Facebook to leverage years of compiled user data to created targeted ads, which advertisers are willing to pay for. He said the sector’s troubles ultimately boil down to getting paid for content. 'The quality of the country’s news will start to decline if we as users refuse to pay for it,' he said. Although legacy publishers like The New York Times, The Washington Post and The Wall Street Journal have been successful with digital subscriptions after being relatively early adopters of paywall or subscriber models, many digital-first brands that relied on click-bait, free content and often third-party platforms, like Facebook, to drive traffic and advertising revenue are being forced to rethink their business models as profits and platforms alike prove unreliable. The word on many a digital publisher’s lips the past few months has been paywalls, but there has been little talk of their limits"...
Facebook Watch Program to Fund Publisher Shows Starring Influencers
Digiday: "Facebook has created a new funding program where it would work with publishers and influencers on new shows for Facebook Watch. Over the past few months, Facebook has been meeting with publishers and studio production partners in an effort to solicit pitches for shows that would be funded by Facebook, produced by the production partner and starring influencers with a huge number of followers on Facebook, Instagram and other social platforms, according to sources familiar with the matter. This incubator program spans verticals including entertainment, news and sports. The creators would be in charge of the actual production of the show, with Facebook providing funding and other support services, sources said.Facebook did not comment by press time. Facebook is looking to fund as many as six to eight shows per publisher or production partner, though there is no guarantee that the platform would fund just any project that’s pitched to them, said two sources who have been briefed by Facebook. The general framework of the deal would be that Facebook would pay publishers once it has approved the show. It’s willing to pay around $200,000 for an eight-episode series, said one source.To be clear, shows produced as part of this program would not be Facebook-owned “originals,” sources said. Facebook would license only a limited window of exclusive distribution — roughly three months, one source said — after which those rights would revert back to the production partner"...
OTHER NEWS OF NOTE:
Amazon Drops Plan for HQ2 in NYC
WaPost: "Amazon canceled plans to build a campus in New York City with at least 25,000 high-paying jobs on Thursday because of resistance from local politicians, unions and community activists who said a project initially hailed as an economic triumph was a lousy deal. 'There are a number of folks on the ground who oppose our presence,” Amazon spokeswoman Jodi Seth said. “We don’t think there’s a path forward in terms of working with them over the long term.' The company issued a statement shortly before noon saying it did not intend to reopen its search for a second headquarters at this time but would continue with plans to put at least 25,000 jobs in Arlington in Northern Virginia and 5,000 in Nashville. The decision was a stunning reversal for Amazon, which badly miscalculated how it would be received when it said it would put half of the 50,000 jobs promised in its much-publicized HQ2 search in the Long Island City neighborhood of Queens. While Gov. Andrew M. Cuomo and Mayor Bill de Blasio celebrated the announcement, and opinion polls showed large majorities in favor of the deal, a strong backlash quickly developed. Opponents, including freshman Rep. Alexandria Ocasio-Cortez (D-N.Y.), protested that the influx of Amazon employees, to be paid an average salary of at least $150,000 a year, would cause housing costs to skyrocket, drive out low-income residents and worsen congestion on the subway and streets. They also objected to up to $3B in state and local incentives promised to Amazon, which they said should not get such subsidies given that it is the world’s most valuable company and headed by Jeffrey P. Bezos, the world’s wealthiest person. Ocasio-Cortez, who has attracted national attention for her strong liberal views, hailed Amazon’s announcement. 'Today was the day a group of dedicated, everyday New Yorkers & their neighbors defeated Amazon’s corporate greed, its worker exploitation, and the power of the richest man in the world,' she tweeted. Others expressed disappointment, saying Amazon should have worked with the community to address its concerns. 'Amazon showed its true colors today and every American should be outraged,” Marc Perrone, president of the United Food and Commercial Workers International Union, said in a statement. 'Jeff Bezos had the opportunity to listen to the voices of working families and support the good-paying jobs New Yorkers deserve. But now we can see this is all about blind greed and Jeff Bezos’ belief that everyday taxpayers should foot the bill for their new headquarters even as the company actively works to eliminate millions of American retail jobs. No company that refuses to invest in hard-working men and women should be allowed to stuff their pockets with taxpayer-funded subsidies. Make no mistake, this fight has only begun,' Perrone said"...
December Retail Sales Plunged 1.2%--Worst Decline in 9 Years
MarketWatch: "Sales at retailers fizzled in December and posted the biggest decline in nine years in a worrisome sign for the U.S. economy, according to a long-delayed government report.Retail sales sank 1.2% in December, the U.S. Census Bureau said Thursday. It’s the largest drop since September 2009, a few months after the end of the Great Recession.Economists polled by MarketWatch expected sales to be flat. The disappointing drop in sales battered stocks in Thursday trades, but many economists were skeptical that sales were quite the disaster the report seemed to indicate. Retailers faced plenty of headwinds in December, including a stock-market meltdown, sudden talk of recession, the start of the partial government shutdown and a bout of unusually poor weather. Yet the large decline in sales appears to go beyond that and offers more proof the economy slowed toward the end of 2018. Sales fell in every retail category except auto dealers and home centers. Sales fell the steepest, 5.1%, at gas stations, but that was not unexpected. Gas prices have been falling since last fall. What’s was surprising was a 3.9% reported decline in sales at internet sellers. That would mark the sharpest drop since November 2008--the middle of the last recession. Yet by all industry accounts, online merchants led by Amazon and eBay reaped big sales gains. Less surprisingly, sales tumbled 3.3% at department stores that have been losing ground for years to mainly internet-based competitors. Traditional brick-and-mortar chains such as Macy’s, Kohl’s and Nordstrom posted disappointing sales in December. Sales also fell at bars, restaurants, apparel stores, grocers, home furnishers, pharmacies and outlets that sell hobby items such as books and sporting goods. Sales rose 1% at auto dealers while home-center sales edged up 0.3%. Big picture: The sales slump in December will weigh down gross domestic product. Economists had estimated GDP would slow to 2.7% in the final three months of the year, but now that estimate is being taken down even further. What does it mean for the economy in 2019? Hard to say. The stock market tanked in December and talk of recession briefly became all the rage, and that may have hurt sales. Yet the stock market rebounded in January, consumer confidence remains high and companies continued to hire at a strong clip. The economy should avoid a recession as long as the labor market remains health, but growth in 2019 is unlikely to match the strong performance of 2018. 'These data are so wild that we have to expect hefty upward revisions, but if they stand, they are very unlikely to be representative of the trend over the next few months. The consumer is no longer enjoying tax cuts or falling gas prices, but that’s no reason to expect a rollover,' said Ian Shepherdson, chief economist at Pantheon Macroeconomics. 'It’s a puzzle. Strong job gains, wage growth, and the drop in gasoline sales should be very supportive of consumer spending growth,' added Scott Brown of Raymond James"...
Kroger Launches Mobile Payment System, Other New Payment Options
SN: "The Kroger Co. has launched Kroger Pay and Kroger Rewards, new mobile and debit payment solutions aimed at speeding checkout by blending customers’ payment and loyalty information.Kroger said Wednesday that it recently introduced the Kroger Pay mobile payment tool at its Columbus, Ohio, division. Plans call for the tool to be rolled out to 10 more markets in the spring and then go nationwide later this year. The new Kroger Rewards debit card also has gone live at stores in the Columbus division as well as at King Soopers and City Market stores in Colorado, Kroger said. The card is slated to become available across Kroger Co. store banners this spring. A feature within Kroger Co.’s roster of mobile apps, Kroger Pay gives customers a single-use QR code to scan at checkout for communicating payment and loyalty card information, including digital coupons and personalized offers. To securely transmit the data, shoppers first enter a custom PIN or use biometrics to confirm their identity. Kroger noted that Kroger Pay reduces checkout time and creates a more frictionless experience for store associates and customers by offering a one-step payment solution. The tool also rewards customers using a Kroger payment card--including the 1-2-3 Rewards credit card, Rewards prepaid debit card and new Kroger Rewards debit card--by enabling them to earn grocery rewards and fuel points in one scan, the company said. Kroger Pay can be used in regular checkout lanes and self-checkout stations and can be linked to any major debit, credit or prepaid card.' Kroger Pay is one of the few mobile wallets that pairs loyalty and payment,' said Mary Ellen Adcock, group VP of operations at Kroger. 'The application of this exciting technology is another step in our front-end experience transformation.' The Kroger Rewards debit card, meanwhile, connects directly to a customer's checking account and serves up an array of shopper benefits, including bonus fuel points, Kroger private brand discounts and double rewards when the card is used through Kroger Pay. 'Our new Kroger Rewards debit card is a lower-cost payment option, enabling us to offer our customers additional savings when they are shopping in a store or online or fueling up,' Millerchip added. 'Through Restock Kroger, we are lowering operating costs, and our new debit card is another way we are doing just that while also rewarding customers who use it."Kroger Personal Finance, along with Kroger’s 84.51° data analytics arm, are linchpins of the Cincinnati-based company’s drive to ramp up alternative profit streams to help achieve its target of $400M in operating profit by 2020 under Restock Kroger. To that end, Kroger is working monetize the huge stores of purchase and customer data amassed from its position as the nation’s largest supermarket company, including 2,800 stores, vast digital properties and millions of daily transactions. At an investor event this fall, Stuart Aitken--named last month to the newly created post ofSVP of alternative business--said Kroger has behavioral data on 60M households, and 96% of all transactions are tied to its Plus Card, which he called “the most robust data set in the industry.'"
Pathmark to Return
SN: "The Pathmark supermarket banner — a metropolitan New York mainstay for decades before its demise with the A&P bankruptcy in 2015 — is being rekindled by grocery retail cooperative Allegiance Retail Services LLC. Allegiance said Thursday that a 49,000-sq.-ft. Pathmark store is now being built in central Brooklyn, N.Y., and is slated to open in late March or early April. The store’s owner/operator is Mount Vernon, N.Y.-based PSK Supermarkets LLC, which runs approximately a dozen stores in metro New York primarily under the Foodtown banner. The planned store, at 1525 Albany Ave. in Brooklyn, is being constructed from a previous Pathmark location that had closed with the liquidation of the Great Atlantic & Pacific Tea Co. in August. Allegiance said it will evaluate the customer response to the new Pathmark before announcing any additional new or retrofitted locations. The Iselin, N.J.-based cooperative said it purchased the intellectual property of the Pathmark name and associated marks to make more retail banners available to members and provide a format targeting an underserved consumer segment. According to the company, the community to be served by the upcoming Brooklyn store has a large percentage of Millennial families with one or more children who seek wide variety, strong promotions and everyday value. After acquiring the Pathmark banner, Allegiance said it initiated a brand review and market analysis and then developed a business plan and go-to-market operating strategy. Physical requirements for the Pathmark format include a store of at least 30,000 selling square feet, a full parking lot with easy ingress and egress and a local customer base that 'aligns with the profile associated with Pathmark’s past success,' the company said.Currently, Allegiance has 32 members operating 120 supermarkets in New York, New Jersey and Pennsylvania and provides marketing, advertising, technology and merchandising support as well as a private label program. Its independent supermarket banners include Foodtown, Freshtown Marketplace, D’Agostino, Gristedes, Freshco Supermarkets, LaBella Marketplace, Brooklyn Harvest, Market Fresh and Big Deal Food Market"...
Report Confirms: Still Too Many Stores
RetailWire's George Anderson writes: "It’s not a new story. Retail sales are up, but operators continue to shutter large numbers of stores as more consumers go online to buy goods and ill-managed and/or debt-burdened businesses fail to overcome the hurdles in front of them.A new report by Coresight Research said mass store closings are in the offing again this year, following 2018 when 5,524 turned off their lights and 2017 when 8,139 closed. So far in 2019, retailers have announced 2,187 store closures, Ascena Retail, Charlotte Russe, Gymboree and J.C. Penney locations among them.Retailers have closed stores in recent years despite a strong sales environment for the industry overall. Last year, according to the National Retail Federation, retail industry sales were up 4.6%. This year, the group is expecting growth between 3.8% and 4.4%. As Coresight’s report points out, sales growth for retail is outpacing U.S. gross domestic product as a whole. While store closings may not be a positive for employees put out of a job, having a weak business fail can open room for stronger ones to move in. 'With any vacant department store, an owner has the opportunity to increase their rent, to reinvigorate or reinvent the space,' Brandon Famous, senior managing director at CBRE, told CNBC. 'In many cases a landlord looks forward to the opportunity of getting that space back. In many cases it will be a positive thing.' Shopping center landlords have turned to consumer-direct brands, pop-ups, food courts and non-traditional tenants, such as shared work space services, to reinvigorate vacant spaces. Some mall operators have even repurposed entire facilities to serve as online fulfillment centers.While department stores and some specialty operators struggle, discount and dollar store operators continue to add locations. Retailers, according to Coresight, have announced 1,411 new store openings, offsetting almost two-thirds of those being shuttered.'"
OTHER NEWS OF NOTE: