Month: March 2019

Kohl’s is equipping more of its stores with enhanced ship-from-store capabilities, as it seeks one more way to one-up competitors like Target and even Amazon to improve customer experience.

On its fourth-quarter earnings call Tuesday, Kohl’s announced that it’s equipping 135 stores with “enhanced ship-from-store capabilities” this year, up from 10 that had the capability last year. These stores are equipped with “technology and process enhancements that allow them to be more efficient in fulfilling digital orders,” according to CEO Michelle Gass. Gass said that Kohl’s wants to push more customers to pick their orders up in stores in order to cut down on shipping costs, but that ship-from-store still helps them “keep up with digital demand.”

The ability for consumers to buy and order online and pick up in stores has been a critical component of Target’s growth as it tries to keep its customers from being lured by Amazon Prime’s two-day shipping. Target also offers ship-from-store capabilities, and that fulfillment option has been growing steadily alongside the option to buy online and pick-up in store. During the third quarter of this year, Target CEO Brian Cornell said that ship-from-store volume doubled year over year.

Retailers have been turning their stores into fulfillment centers for the better part of the last decade in order to keep up with Amazon. But as shipping costs continue to eat more and more out of retailers’ profits, more of them, like Target, are pushing customers to buy online and pick up in store.

Kohl’s proves that that rolling out ship-from-store capabilities is still a slow-going process — even with the 135 stores that will have enhanced ship-from-store capabilities by the end of the year, that will represent just over a 10th of Kohl’s total stores.

“A true omni-channel would allow shoppers to choose how they receive their items — so no single option is going away any time soon,” Laura Behrens Wu, the founder and CEO of Shippo, a multi-carrier shipping software provider for e-commerce companies said. “This will require planning for demand on both physical and online channels, and tracking inventory, in real time, across all locations where goods are stored.”

In order to successfully pull off ship-from-store, companies have to figure out the right way to split the number of employees who are helping with checkout in the front end of the store and fulfilling orders in the back end. And they have to figure out whether to build an inventory management system in-house or which third-party solution is right for them.

“The smart way to use ship-from-store is to designate certain stores the hub, and others the spokes,” Charles Dimov, vp of marketing for order management software provider OrderDynamics, said. “Designate certain larger stores the hub. From these, you use ship-from-store, because there is an area designated for packing and storing goods for shipment.” Behrens Wu also said that some stores in dense urban areas can lend themselves well to ship-from-store. Target’s chief operating officer John Mulligan said during the company’s investor day on Tuesday that using stores as fulfillment centers in cities allowed the company to “ship online orders at least a full day faster than we can ship from an upstream fulfillment center and we can deliver same-day orders within hours.”

Juozas Kaziukėnas, the founder and CEO of e-commerce research firm Marketplace Pulse, still thinks that retailers should push consumers more to buy online and pick-up-in-stores — not only does it cut down on shipping costs, but it helps increase foot traffic in a time when retailers are still worried about sustaining all of their existing brick-and-mortar stores.

Ship-from-store is only going to get more complicated as retailers feel more pressure to compete with Amazon’s convenience by offering consumers more ways to receive their order. Walmart CEO Doug McMillan mentioned on the company’s last earnings call that in the future, for example, they may give customers more options to customize their delivery windows.

Still, turning stores into both a fulfillment center for customers to pick up orders and a shipping center requires similar investments. And retailers can’t afford to completely ax one type of fulfillment option when they’re competing with Amazon’s endless offerings. So long as the ability to buy online, pick up in store continues to rise, so too will ship-from-store.

“If a retailer is going to use one technique, they might as well do both,” Dimov said.

The post As competition heats up, retailers focus on implementing ship-from-store capabilities appeared first on Digiday.

Vertical Network is re-imagining the original Discover channel for its lifestyle property Brother to be more like a TV network or YouTube channel, rather than a magazine.

Vertical Networks is in the process of shifting Brother’s content from being a daily mix of articles and videos into a slate of weekly original episodic shows. The new strategy for Brother’s Discover channel is intended to help Vertical Networks develop shows that it can distribute on and off Snapchat, sell sponsorships against those shows and license or sell its programming to platforms and streaming services as original content.

In the past, Vertical Networks has used Brother’s Discover channel to test out intellectual property before pitching a show to a platform like Snapchat, but the move to regularly distribute original series through the channel formalizes that strategy.

The move is also meant to bolster the channel’s recurring viewership by habituating viewers to expect new episodes of shows to be released on certain days of the week. With more than 20 million subscribers, Brother’s Discover channel performs well for Vertical Networks. In February it received 23 million unique viewers and averaged 3.3 million unique viewers per edition of its Publisher Story, which are published each weekday. But a challenge with the magazine-style approach to Discover is that it can be difficult for publishers to sustain an audience because each day they have to recapture that audience based on the strength of that day’s edition of Brother’s Publisher Story, said Vertical Networks CEO Jesus Chavez.

By the end of March, Vertical Networks plans to air a separate episodic series for each weekday on Brother’s Discover channel, said Bailey Rosser, vp of content strategy at Vertical Networks. The company has already started that process with four series it is airing on Brother’s Discover channel and three more in production. During the initial testing phase, the company is producing four to six episodes of each series it will distribute on the channel to gauge audiences’ interest and see whether viewership grows week over week. Based on each show’s performance, the company will decide whether and how to further develop it.

A former YouTube exec, Rosser described the vision for Brother’s Discover channel as being similar to a channel on YouTube, where a single channel can be home to multiple episodic series. The shift to using Brother’s Discover channel in this way will help the company to build its audience on and off Snapchat and to develop shows for different platforms, said Rosser, who was originally hired as head of audience development at Vertical Networks.

In addition to Snapchat, Vertical Networks plans to upload the shows to Instagram and YouTube. Both of those platforms support vertical video, so the shows produced for Brother’s Discover channel will not need to be edited for those platforms, Rosser said. Since the shows will be exactly the same on each platform, that uniformity will help to give the company a baseline from which to evaluate the performance of its shows across platforms and gain insights that can inform the development of future shows and platform-specific strategies.

Distributing content simultaneously on Snapchat Discover and elsewhere is something that media companies have done since Discover debuted in January 2015. However, usually media companies would take content they had published elsewhere first and repurpose it for Discover. TV networks like Comedy Central cropped clips from their linear shows to include in their Discover channels, and now publishers such as Jukin Media and Daquan redistribute videos from YouTube, Facebook and Instagram on their Discover channels. By producing content with Discover and other platforms equally in mind, Vertical Networks appears to be reversing that well-worn path.

Vertical Networks is not moving away from Snapchat, whose parent company is an investor in Vertical Networks. The series that Vertical Networks is producing for Brother will be “Snap-first or Snap-plus,” the latter meaning they will air on Snapchat and other platforms, said Chavez during an interview in the company’s new headquarters in Santa Monica, California, which sits a half-mile away from Snap’s own headquarters. But he is leaving the door open to the potential that some shows may perform better outside of Snapchat and as a result become YouTube-first or Instagram-only.

The shift with Brother’s Discover channel exemplifies a broader shift at Vertical Networks. “In the shift we’re going through now, the entire organization is focused on building IP. Every original series we’re launching, whether it’s on the Brother channel or a standalone series, it’s all about IP,” Chavez said.

To that end, the 30-person company has reorganized itself. It has merged its social and original content teams into a single group that develops content to live on its own properties like Brother or to be distributed as a standalone series like it Snapchat dating show “Phone Swap.” In addition to developing shows that can be sold or licensed to third-party platforms, Vertical Networks is increasingly looking to sell sponsorships against its programs. Over the past six to seven weeks, the company has staffed up its brand partnerships team by hiring sales leads in Los Angeles and New York as well as heads of brand strategy and ad operations, Chavez said.

Beyond the organizational restructuring, the physical structure of Vertical Networks’ four-week-old office illustrates the company’s shift toward IP development. The company is building two studios within the office to go along with the nearby studio space it is leasing. Those in-office studios are meant to make it easier for the company’s content team to produce shows for its various properties, including but not limited to Brother.

Following Brother’s shift, Vertical Networks is looking to start developing more video series for Mindsy, which specializes in content related to self-discovery and has its own Snapchat Discover channel. “As we’re developing a lot of these new formats and series, that will be the housing unit for some of this content. And the idea will be for that to be multi-platform as well,” Chavez said.

The post Vertical Networks is restyling Brother’s Snapchat Discover as a TV network appeared first on Digiday.

It’s a new era at WarnerMedia, which has made sweeping changes to Turner. And more changes are coming as employees brace for layoffs. But more interestingly, AT&T’s moves also show how the company is viewing its looming battle with Netflix.

The key hits:

• After spending $85 billion on Time Warner, AT&T is $170 billion in debt.
• The company is looking to cut down on costs by breaking up Turner and moving its various assets into other areas of the company including the newly formed WarnerMedia Entertainment and a beefed-up Warner Bros. studio.
• AT&T thinks it can save $1.5 billion annually and an additional $1 billion by finding synergies across WarnerMedia.
• These sweeping changes have impacted Turner the most and employees are bracing for more layoffs.
• For AT&T, there is no distinction between HBO and Turner as businesses, it’s all TV and it needs more of it to compete with streaming giants.

To recap: HBO and Turner’s top executives — and company lifers — Richard Plepler and David Levy are leaving the company; Turner has been broken up with TBS, TNT and TruTV merging with HBO and the upcoming WarnerMedia streaming service under WarnerMedia Entertainment, which will be run by former NBC exec Bob Greenblatt; Turner Sports is now under the purview of CNN boss Jeff Zucker, who will serve as chairman of WarnerMedia News & Sports; Cartoon Network, Adult Swim and Otter Media will be under Warner Bros.; and Turner International president Gerhard Zeiler is in charge of all ad and distribution revenue at WarnerMedia.

The post Video Briefing: WarnerMedia changes show how AT&T views the future of TV appeared first on Digiday.

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AdExchanger Talks is a podcast focused on data-driven marketing. Subscribe here. Branding and performance are two sides of the same coin. Maybe that’s why they can never see eye to eye? This week on the podcast, 360i CEO Jared Belsky discusses the need for clients to bring the two disciplines together rather than allow them to exist… Continue reading »

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