Evolving Transaction Intent
There is an opportunity to significantly improve typical media model returns by capturing purchase intent, meshing product discovery and by evolving user purchase intent through thoughtful intertwining of social and utility use cases.
Wanelo is a good example of a company that meshes the utility value of trend discovery and building personal social equity to create monetizable behavior. Beyond Wanelo, a number of players have proven that a well-executed user experience can introduce use cases that pay for themselves via user generated content/curation, lightweight interactions that flip the producer/consumer ratios, or via value-creating functionality that effectively negate the ongoing investment costs of content production.
By taking a mobile tact to creating this delightful social or utility-driven experience there is also the opportunity to disrupt the commerce space at a root level. Despite the fact that the generic e-commerce space has been a race to the bottom with companies like Amazon and some of the bigger box retailers like Wal*Mart finding highly efficient ways to recommend, upsell, cross-sell, multivariate test, improve delivery/supply chain, offer alternatives, etc. root-level commerce use cases are far from solved in the mobile space. While a lot of folks may check Amazon on mobile when they are shopping to do price checks, this is just a small sliver of the purchase cycle, and more of an enabler than an activator. Inspiration, discovery, frictionless transaction, etc is still open game. A small handful of players or a single player is going to nail a use case that solves part or all of the discover, research, evaluate, socialize, motivate, transact cycle and breaks open the $100 billion mobile commerce opportunity.
This opportunity is lowest risk in niche targets because you can understand users well enough to deliver a digital property that provides a compelling value while potentially introducing a compelling proprietary product mix. Houzz is the perfect example, they solved an important, yet simple consumer problem: help consumers discover home ideas, be inspired by beautiful interior design, browse furniture, etc. The critical part that many media, commerce, etc. players miss is that it is the digital experience in its entirety that has created product-market fit and the $2 billion+ valuation, it’s the simple onboarding, full screen curated images, fast swiping, easy look book creation that yields an opportunity to intertwine professional advice and tagging of products for intent identification or commerce. Not only can you not just bolt bits of this functionality onto existing media or commerce properties, but you need to roll-out an experience like this in phases to achieve critical mass before stepping up to the next product milestone. Too much too soon may result in even worse results than bolt-on tactics.
If you’re looking for a more conservative “content + commerce” approach an example that is worth checking out is Thrillest. They’ve done a masterful job at more traditionally meshing content and commerce within a niche. The male-centric night-out/fashion discovery property posts/emails hot spots in NYC (and other locations) like unique rooftop lounges that require a special knock to get into and serve hamburgers rare-only, etc. They purchased Jack Threads a few years ago and have steadily moved up the fastest growing media company on the Inc. 500 list. The company is seeing significant lift on the media model in terms of eCPM rate and lower costs of acquisition and retention on the commerce end.
Why does this model work?… In short, when you create a delightful, valuable and purpose-driven user experience you have an opportunity to increase touch points, frequency of touches and amount of time spent beyond the mindshare spent on a typical transaction or in consuming a post. This will increase loyalty/retention, viral co-efficient and the likelihood that a user will be on your property when they are ready to transact or provide a monetizable signal that they are intending to transact at some point. If you’ve got a strong user experience design team that clearly understands ad tech, the business case and user psychology, they’ll make sure the use case not only gauges and captures intent, but also advances it.
While an initiative along these lines is likely an upfront capital expenditure, if you build the property with a value prop that instigates user curation, has mechanics for organic growth, etc. ongoing costs can be relatively well-contained yielding potential for increasing margins over time. The most scalable aspect of this opportunity is that revenue doesn’t necessarily need to be generated with physical goods or major infrastructure investments, it can grow by selling targetable intent data to ad networks, by reselling leads to direct suppliers, or a number of other paths. Combine a number of the elements successfully and you’ll improve your overall lifetime value over cost-per-acquisition formula. Combine all the elements successfully and you might have a breakout success.
Ping me if you’re interested in exploring the value drivers for the property, how to leverage company assets/positioning, what the ideal user experience may be and whether to build, buy or partner to make it happen.
