How consumers are influence and purchase products have changed significantly over the past few years, moving more toward digital and social influence e-commerce. I was able to speak with Jonty Kelt, CEO of Group Commerce, about his company and his perspective on trends and the future of e-commerce. Group Commerce, headquartered in New York, focuses on helping publishers succeed in e-commerce, clients include: The New York Times, Daily Candy, Meredith, Thrillist, Boston.com, Chegg and active.com.
Elizabeth Tam (ET): Who is Group Commerce?
Jonty Kelt (JK): Group commerce is a platform that enables media companies to enter the world of e-commerce, because these media companies have traditionally not participated in e-commerce, they’ve been ad-funded, had great content and they sell ads around it. We had a vision a few years ago that those companies actually have assets which could be leveraged to create really interesting and successful e-commerce businesses. And those assets included things like strong brands, consumers trust them, they have authority of certain topics, we thought they could leverage those assets to enter the world of e-commerce, which is what we created as a platform.
Our mission as a company is to enable audience owners to succeed in e-commerce; audience owners include media companies, email newsletters and celebrities on Facebook. They have an audience and we want to provide them with technology and strategy and offers, which include e-commerce products and services, and enable them by creating a merchandizing strategy for their audiences that makes sense. For example, Daily Candy focuses on what women want in 11 cities across America, and power local offers in those cities which has been successful.
We’re helping audience owners participate in e-commerce. Our value proposition for them is not just that we’re going to help you grow revenue streams, but also we’re going to help them engage with their audience more. If you offer great content that’s great, but if you offer commerce as well, which is things that they want, that’s another layer of engagement you’ve got as a brand with that audience and that’s really powerful. And those media companies that are really struggling with transition to the digital world, they really need new digital related product and services to engage with their audience—new revenue streams, engagement and relevance to the digital world.
ET: What are some interesting new things that you have seen in social commerce?
JK: Social commerce to me is really a name for innovation around e-commerce. It’s a subset of e-commerce. E-commerce is about $4 billion right now growing to $4 trillion in 5 years. In the last few years we’ve seen innovations on group buying, such as gilt group, birch box. Social commerce is partially about innovation and partially in some way leverages the social graph. Social graph is driving the line share of e-commerce, a small part of e-commerce, but it’s highly relevant, it works and it’s growing.
Social commerce is not about just about the social media, it’s about the innovation around e-commerce. In terms of interesting things I’ve seen around lately – subscription e-commerce, local commerce, daily deals, group buying, flash sales and then innovations all over—the company provides a platform that can enable the audience to take one of those flavors of e-commerce that will work for their audience. Through the last part of last year, we saw an increase in products, hard products. There’s a mixture of services, otherwise known as local commerce, and products, otherwise known as national deals, that’s a really interesting evolution that’s been made in the last year or so.
ET: what are some of the struggles you have had trying to get media companies into e-commerce?
JK: We thought a lot about, what is the right media company for this model. We came up with some of the obvious: brands which are valuable and people are engaged with and people respond, they have to have a strong authority over something, they need to have a strong audience or strong tied audience demographic, and they need to have size. Those are kind of the obvious things that are a pre-requisite for an e-commerce program, but it really comes to the topic of commitment as a media company.
Are you going to put your toe in the water and put up a few banners to promote your product or are you going to properly leverage your promotional voice and make a commitment to build an e-commerce business. Because you have a great asset as a website, the radio airways, the TV station, the email newsletter, the social media and whatever your voice is, you need to harness that with an integrated marketing program, which announces that you are in the game of e-commerce and that we are going to stream you good stuff and hopefully be valuable to you. If you do that, surprise, surprise, it will work. That’s one thing we’ve learned.
We really have 3 buckets of customers those that are committed to leveraging their products, those who are somewhat committed and those who don’t and are just fumbling along. Like anything in life, if you’re committed, it’s probably going to work and if you’re not, it probably will not.
We segmented the market into two groups, those with strong versatile authority, (such as Daily Candy, which has authority over what young women and Thrillist, which has authority over what young men want) that’s vertical, OR local media, that more broad, horizontal news, (such as New York Times and boston.com), those audiences are so much broader. The merchandising strategy behind them is different, which is why we segment to local media or national media, and both are expressing real success and growth there. Where businesses once had 203 employees working, companies now have 20 employees working on this.
ET: Where do you see e-commerce and Group Commerce headed in the future?
JK: Commerce is growing at a pretty steady rate of about 9% a year, so that’s e-commerce. One of the things that I think is going to happen is that the “e” will be dropped because it’s just commerce, and it was just interesting that it was online, but actually it’s just commerce. E-commerce and offline commerce is really turning into one. And our company, we want to help these large existing audiences’ owners with these massive audiences to participate. We’re going to continue to build great technology and build the services that help them enter the market and build their businesses. If we do that well, our company should rise with that tide and in particular we’ll be leveraging those great media brands and their large audiences. We’re pretty excited about the future.
ET: What direction and where do you see you moving toward to get your clients out there as far as platforms, strategies, etc.?
JK: Each of our customers have pre-existing audiences; wherever they are we’re simply going to help them reach their customers. When a new platform pops up, then our customers will probably be leveraging these platforms – our goal is to leverage what their assets are and if something new comes up we’ll encourage them to use it.
ET: With the creation of new platforms and media, is it hard to keep up with all of the constant movement and changes in platforms?
JK: It is, there is a lot to do. Everyday our customers need to be where their customers are, we need to enable them into the new technology and do it all at the same time, which is challenging. But practically speaking we start where all the main audiences are, because that’s the main priority, then move to the next place, then the next place, until you cover all the content points. Some of our customers do that well and have a strong integrated market, others are a little slower. It all comes back to the question of commitment, as a company you need to decide how much commitment you want to put in to leverage your assets.
ET: What exciting projects does Group Commerce have in store for 2012?
We acquired a mobile technology company late last year, and so we have a very exciting road map to better enable mobile commerce. There is a real opportunity in mobile, we found people spend up to 4 times as long on mobile sites, but the conversion rate is less than half. We’re moving our customers to a mobile optimized experience, for iPad, for android and for IPS, but also increasing conversion rates. The second is more investment in products, we’ve seen real growth in products and this is a real opportunity for us and our customers. And last, we’re been focused on big companies with big audiences, so we’re building a platform that’s going to enable small customers to participate as well.
Thank you Jonty Kelt for taking the time out of his busy schedule to speak with us!
For more information on Group Commerce, please visit: www.groupcommerce.com