Month: April 2019

Advertisers are moving more of their ad budget to publishers that meet strict brand-safety criteria, as well-publicized brand-safety breaches, viewability gaffes and rampant fraud have battered advertisers’ confidence in online ads bought for them to the point where some are taking matters into their own hands.

Unilever, Diageo and Nestlé are among a group of large global advertisers managing so-called trusted marketplaces: self-erected safe havens of media sellers they trust due to those sellers’ commitment to certain guarantees, not just on price but also qualitative aspects.

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The opening of Story boutiques in 36 Macy’s stores is meant to usher in a new in-store experience for the department store, driven by product curation and discovery. For Macy’s internal teams, Story is a learning tool as the company works to move faster.

Macy’s acquired concept store Story last spring as part of its efforts to rethink its store experience. At Story’s 2,000 square-foot Chelsea store, it revamped itself every few months to reflect a new theme and carry products from small and up-and-coming brands that fit that theme. Now, Macy’s has incorporated Story’s format into its own stores. The first Story theme at Macy’s is “color” and includes brands like Crayola, Mac and Levi’s Kids, which are also sponsors, meaning they paid to participate. Smaller brands don’t pay to be sold in the Story program, but there is a commission for sales. Macy’s will change the theme on a regular basis, meaning there will be a down period while they swap out the installations.

Rachel Shechtman, Story’s founder and CEO, became Macy’s first brand experience officer; Shechtman then built a brand experience team around her. Story at Macy’s has a 15-person staff that is separate from Macy’s departments. Shechtman said that nothing about the product curation product has changed, it’s just “Story on steroids,” but that keeping the teams separate was necessary to move at the speed she wanted to move.

“What I realized is, [we could] use this as a learning opportunity for the company overall,” said Shectman. “I built a fully integrated team, and that team works across all of Macy’s to create and collaborate on new processes.”

The idea is that Macy’s can then learn lessons from its new scrappier, in-house startup. In keeping the teams separate, Macy’s let Story stay agile within a larger machine while still rolling out the Story retail format at scale, something Shechtman said was otherwise going to be a struggle if Story had tried to do it alone. At the same time, Macy’s merchandising and store teams are positioned to look to Story at Macy’s to enact new projects at a faster pace, and any Macy’s employee, in-store or at corporate, can apply to work on Story-related programs or participate in related training sessions.

“Changes at Macy’s need to be implemented faster and better,” said Macy’s chief digital officer Jill Ramsey. “Our goal right now is to look at new areas of the business like Story to improve and overhaul the metabolism of the company.”

For Macy’s, Story is among the first in-store representation of the company’s ongoing evolution. CEO Jeff Gannette joined two years ago and laid out a “North Star” overhaul strategy that would tackle improving mobile, e-commerce and in-store experiences. To revamp inventory and experience, Macy’s, along with the Story acquisition, has also invested in b8ta, a retail tech platform that’s powered Market @ Macy’s, a pop-in strategy to bring new brands into Macy’s stores, which Shechtman also now leads.

It’s an inventory play that’s become table stakes for department stores that are facing falling foot traffic. Nordstrom, Bloomingdale’s and Barneys have all partnered with online brands and used stores-within-stores to incorporate new inventory. Macy’s, which has taken a year to implement the Story acquisition into its stores, has seen sales stall, and in 2018 saw sales climb by 2%; in the fourth quarter over the holidays, they were up 0.7%.

“All department stores are competing on today inventory and curation. A company like Macy’s is now dealing with the fact that people no longer need to shop there. They have to want to,” said Michelle Grant, head of retailing at Euromonitor. “This is Macy’s stab at that.”

Macy’s hasn’t said how many stores Story will eventually be in, but the company will be closely watching its performance to see what else it can learn from the way the Story at Macy’s team functions, across areas like product curation, merchandising and agility. At the same time, Story is given room to operate within Macy’s, according to Shechtman.

“Me and my team went department to department to understand the Macy’s system,” said Shechtman. “We developed processes that could plug into Macy’s. It accommodates our needs while using their tools.”

Danny Parisi contributed reporting to this story.

The post How Macy’s is making its stores more experiential appeared first on Digiday.

In the early days of Snapchat Discover, Condé Nast, like other publishers, converted some of its magazines into digital editions that were exclusive to Snapchat, first with Vogue and then followed by Wired, GQ, Self and Teen Vogue.

These days, the magazine empire only has two of those publisher editions remaining on Snapchat with Teen Vogue and Self. In October 2018, unfortunately, timed with a bad earnings report from Snap, Bloomberg reported that Condé Nast was pulling the channels for Wired, GQ and Vogue, and was laying off employees associated with the channels. But that doesn’t mean the company has abandoned Snapchat: Condé Nast International added three publisher editions with Vogue UK, Vogue ES and Vogue FR. And while Condé Nast may have pulled some of its other magazine editions on Discover, the company manages 28 video series on the platform.

Even as Snapchat Discover has become more crowded and other publishers such as The New York Times have pulled their channels, Condé Nast remains invested in Snapchat and plans to introduce more series to the app, according to Oren Katzeff, president of Condé Nast Entertainment. CNE reached more than 39 million unique viewers across the 23 shows it had live in December 2018, according to Condé Nast.

“Our relationship with [Snap] has progressed, shifted and adapted over time, and I think it’s adapted in a positive away for us and them. We had taken some original channels down and are making an effort of taking existing IP and optimizing for the Snap platform. While we do have 28 shows that run on Snap, we didn’t haphazardly select them,” Katzeff said.

Condé Nast maintained the publisher channels that made the most sense for Snapchat: Teen Vogue and Self. Teen Vogue had previously used Snapchat to premiere digital magazine covers. Now, Teen Vogue publishes two editions per week on Snapchat, which in part features content from the site but is specifically repackaged for Snapchat. The brand has one dedicated designer for Snapchat, and the rest of the team is a part of the larger editorial and social team.

“Our audience is primarily a younger consumer. We have a shelf life of our reader, so we’re always after the younger audience. Snapchat probably more so than any other brand in the building makes sense for us,” said Carrie Marks, associate director of audience development & social media at Teen Vogue.

Teen Vogue has increased its subscription numbers by 180 percent between March 2018 to March 2019, according to Condé Nast. Teen Vogue declined to share specific numbers. When it comes to successful content themes, Marks said sexual health and wellness is “consistently a top performer,” on Snapchat while celebrity-driven news is not.

“That speaks to our reader being a little younger and not as well versed [in sex education] and looking for us to educate them. It speaks to sex ed in this country and probably a lack of that in a lot of ways,” Marks said.

Self’s Snapchat edition, meanwhile, also produces a few editions per week, where its content also explores female sexual health and topics like periods and bra size.

The other brands at Condé Nast do not have exclusive editions but instead have branded video series on the Snapchat. Condé Nast had pulled GQ’s weekly publisher edition, and now Condé manages four GQ series on Snapchat: “Actually Me” with 30 episodes, “Tattoo Tours” with eight episodes, “On The Rocks” with five episodes and “Iconic Characters” with three episodes. Vanity Fair and Glamour, meanwhile, have four series each; and W and Bon Appetit have two series each; and seven properties including Wired and The New Yorker have one series each.

These series aren’t completely exclusive to Snapchat. For example, Wired’s series “Autocomplete Interviews” is available on its own website and on YouTube. But the episodes are reformatted to the Discover platform.

“The version you get on Snap is unique to Snap. Each one of the shows is edited and optimized. There’s a ton of shows and IP we’ve created that aren’t on Snap that we didn’t think would perform as well. We’re constantly looking at what’s working and what’s not working,” Katzeff said.

Not having to make exclusive content helps boost the profit margins, as publishers can use existing resources and media assets to fine-tune content for Snapchat Discover. Insider, for instance, has been using its large social video library to create some new content for its publisher channel.

Condé Nast declined to share its viewership numbers or if the channels are profitable. Katzeff said they take advantage of a variety of Snap’s monetization products such as unskippable ads in its shows.

Condé Nast does have one series exclusive to Snapchat. In line with Snap’s push for original shows, Snap greenlit a crime series called “True Crime Uncovered,” which will be produced by Condé Nast Entertainment. That first, six-episode season premiered in May 2018. The second, seven-episode season premiered in September 2018. Katzeff said CNE and Snap are in talks for a third season.

“True Crime Uncovered” had season-long sponsors, including Oxygen, Sony and TNT.

“We invested [in the original show] with confidence that there’s advertising demand with it. Snap is pretty good at having a variety of different models that work for either a particular project or partner. If we weren’t seeing an upside from revenue and audience, we wouldn’t be airing these shows on Snap,” Katzeff said.

The post Conde Nast now has 28 shows on Snapchat, with plans for more appeared first on Digiday.

Two years since its launch in the U.S., Amazon Cash, Amazon’s reloadable prepaid card, faces adoption hurdles.

The payment method initially rolled out as a feature to help unbanked or underbanked customers (those who don’t have bank accounts or don’t rely on their bank accounts for a majority of their transactions) shop on Amazon. To use Amazon Cash, customers log into their Amazon accounts and get a personalized barcode that they can use as a debit card to shop online and reload at participating physical stores. Now, Amazon has other plans in the works: Amazon Cash is being touted as part of a possible menu of solutions for cash-paying customers who want to shop at Amazon Go stores. The company said Wednesday that it will begin accepting cash at Amazon Go stores amid criticism and legal challenges to the formerly cashierless stores. Without offering specifics, Steve Kessel, Amazon’s svp of physical stores, mentioned Amazon Cash among a series of payment methods the company plans to extend with its physical stores.

Despite these plans, Amazon Cash’s future at Amazon Go stores is uncertain. Like other prepaid cards, industry watchers say trust issues impede wide adoption, and restrictions that only allow it to be used within Amazon’s ecosystem don’t make it an attractive option for lower-income underbanked customers who need quick access to cash.

“I haven’t seen a lot of adoption,” said Brian Hassan, co-founder of Kickfin, a tech company that helps retailers process cash transactions more efficiently. “There’s an aversion to prepaid card programs in these [unbanked or underbanked] communities, because they’re concerned with privacy and tracking.” In addition, Amazon prepaid cards require users to set up Amazon accounts, making it a step harder to use than other prepaid cards on the market that are unregistered and ready for immediate use.

While analysts have called Amazon’s efforts a distribution play, extending the brand’s reach among a customer base that’s not typically shopping on Amazon, the market for prepaid cards is a crowded field among retailers. For example, Walmart’s MoneyCard (powered by Green Dot Bank) lets customers use it as a de-facto bank account, with capabilities to set aside savings envelopes and deposit paychecks; Walgreens offers its own prepaid card in conjunction with Green Dot; and Green Dot itself offers a wide array of prepaid cards.

Amazon would not comment on how many customers currently use Amazon Cash, but according to the company, Amazon Cash accounts can be loaded at 30,000 participating retail locations, including 7-Eleven, Gamestop and CVS. It’s a program that has global reach: It operates in the U.K. as Amazon Top Up and can be reloaded at participating retailers; Mexico-based Amazon Cash customers can top up balances at 18,000 OXXO convenience store locations; and Canadian customers can reload Amazon Cash cards at any of the country’s 6,200 post offices.

Given the restrictions around use of Amazon Cash within Amazon stores, and the inability to retrieve funds for other purposes, growing adoption among the underbanked could be difficult for Amazon.

“Cash needed for rent bills, medical bills and a whole host of other issues are faced by vulnerable consumers who don’t have access to bank accounts,” said Scott Astrada, director of federal advocacy at the Center for Responsible Lending. “Once the capital is captured, it’s a non-refundable gift card.”

The carrot Amazon could dangle for would-be users is discounting to encourage adoption. The company has rolled out similar promotions before, like a promotional $15 to customers who try out Amazon Cash, which was a limited-time offer last summer, for example. Should Amazon be able to roll out sufficient incentives, and address the trust issue among some customers, it could have some potential to grow.

“Pay the customers a good rate on their cash to incentivize them to keep more there,” said Josh Siegel, CEO of banking technology company StoneCastle Partners. “Make sure the cash benefits from FDIC insurance so that customers might consider adding direct payroll deposit to their account, and give them automated bill payments, so that each month they can click a few items and just have the cable, phone and car payment paid from Amazon Cash.”

The post Why Amazon Cash is struggling to grow users appeared first on Digiday.

Big-box retailers are hesitant to give over any part of their business to Amazon, and that’s opening up an opportunity for Microsoft and Google to build competitive cloud-computing businesses for retailers.

Amazon Web Services is the biggest cloud-computing business on the market, bringing in $7.4 billion in revenue for Amazon in the fourth quarter of 2018. But over the last couple of years, a steady stream of retailers like Target, Walmart and Kroger have signed multiyear deals with its biggest competitors, Microsoft Azure and Google Cloud. (Neither Microsoft nor Google shares how much revenue their cloud divisions generate).

Both companies have made developments over the past couple of years to their cloud-computing businesses specifically targeting retailers. Most recently, Google released a dedicated Google Cloud for Retail solution yesterday at its annual Google Next conference. As part of this new retail solution, Google will allow retailers to utilize other Google technology. For example, it will offer Vision Product Search that allows retailers to build new mobile apps that use a Google-Lens type search application, that recognizes and searches for objects in real time. According to a press release from Google, Ikea is one of the retailers working to develop a new product search for its mobile experience that utilizes Google’s Vision Search.

Microsoft, meanwhile, has secured a couple of high-profile partnerships over the past year with retailers to test new applications that utilize cloud storage, and in-store retail technology that it’s indicated it may eventually sell to other retailers.

It’s indicative of how Google and Microsoft are using their cloud-computing services as a jumping-off point to pitch retailers on being their test partners for next-gen technology. 

Previously, a retailer might have built its own in-house data center or leased servers on a monthly basis. But today’s big-box retailers have huge data storage and web processing needs, as they sell more product online, offer a variety of shipping and delivery methods, and have multiple mobile applications to collect more customer data. Amazon got a head start — Amazon Web Services was open for business in 2006. But retailers have reason to be wary of working with them. 

Neither Microsoft Azure nor Google Cloud discloses exactly how many retail customers they have. But within the past two years, Microsoft Azure has announced contracts with Walgreens, Albertson’s, Walmart, Kroger and Gap. Google Cloud, meanwhile, has secured Target, Shopify and Home Depot as customers within the past few years. CNBC previously reported that Target, in particular, started considering moving away from Amazon Web Services after Amazon acquired Whole Foods, not wanting to give more of their business to a division of its competitor.

“[Retailers] know Amazon Web Services generates higher operating margins than Amazon.com, and they worry those profits could be used against them,” Gartner analyst Ed Anderson told CIO Dive.

Microsoft’s main liaison to retailers is Shelley Bransten, a 16-year veteran of Gap, whom the company hired last year to head up its consumer goods and retail division. Keith Mercier, Microsoft’s gm for retail and consumer goods, said in an email to Digiday that Microsoft’s focus when working with retailers is on “bringing our own people and our own innovation to the table.” That’s been exemplified by two partnerships Microsoft announced within the past year, with Walmart and Kroger, respectively.

Last year, Walmart and Microsoft announced that they were building a joint engineering facility in Austin, Texas, to develop new internal applications, an Internet of Things sensor system that notifies Walmart technicians when the temperature in a store’s refrigeration system drops below a certain level.

And in January, Kroger announced that it was working with Microsoft to test a digital-shelving system in two of its stores that could display digital advertisements personalized to each shopper. The two companies also said they would eventually work together on rolling out the technology to other retailers.

When asked how Microsoft was pitching retailers, Mercier didn’t directly reference Amazon but said that “we are always empowering and never competing with our customers.”

Google Cloud hasn’t announced any recent test partnerships on the same level as Microsoft’s partnerships with Walmart and Kroger. It has a smaller market share than Microsoft Azure and Amazon Web Services, and experienced some leadership turnover when its CEO, Diane Greene, stepped down in November. But Google Cloud’s new CEO Thomas Kurian said this week that he wants to build more industry-specific solutions in fields like retail.

Particularly as Amazon seeks to become the leader in leveraging other types of retail tech, like voice shopping and cashierless convenience stores, expect more retailers to try and fend off competition from Amazon by working with its competitors in other categories

“[Retailers] want to take advantage of the next generation of technologies like artificial intelligence and machine learning, and are looking for partners that are innovators in the space,” Pravin Pillai, global head of industry solutions for retail at Google Cloud said.

The post How Microsoft and Google are using a fear of Amazon to court retailers appeared first on Digiday.

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