(Editor’s note: The article below was written by Paul Conley, The NPD Group’s director of content marketing, and originally appeared on the LinkedIn Pulse publishing platform.)
Can industries merge?
Companies can merge. They do it all the time. But entire industries?
Yet that seems to be what’s happening to the two industries that dominate my working life: media and retail.
The most obvious example of this is Story, the Manhattan store that describes itself as a place that has the “point of view of a magazine” and “sells things like a store.”
Story creates a new “issue’ every four to eight weeks. The place is always Story. But the stories it tells -- the merchandise, the design and the theme -- change on a regular and predictable basis: just like a magazine.
Perhaps most interestingly, the business model for Story is quite similar to that of a magazine. Each “issue” has a sponsor. Big names such as American Express and General Electric have signed on as sponsors. So too have some giants of the retail world such as Target and Home Depot.
Story, a store that acts like a magazine, should not be confused with Lucky, a magazine that acts like a store. Lucky raised the ire of traditionalist media folks when it launched in 2000 as a sort of print-based shopping portal. Today Lucky is an actual ecommerce store that lets users “Shop the Magazine.”
Confused? Me too. But is it possible that media (the world of newspapers and magazines, stories and ads, editors and reporters) and retail (the business of shops and supermarkets, products and coupons, checkout clerks and category managers) are actually turning into one industry?
Mixing up the retail mix
There’s an old joke in the media business (where I toiled for more than three decades): When something happens twice, it’s a coincidence. When it happens three times, it’s a trend.
Story and Lucky -- born some 14 years apart -- may be nothing more than a coincidence.
But consider some of these other examples of media-retail mating:
-- Newspaper coffee shops: In 2010, the Torrington Register Citizen, a daily newspaper in Connecticut, opened its newsroom to the public -- offering coffee and free Internet access. The idea was to promote transparency in journalism and build support for the paper’s citizen-journalism efforts.
The idea caught on. The Winnipeg Free Press in Canada opened a coffee shop of its own. And the Guardian newspaper, a noted innovator in digital media, opened a coffee shop in London’s Shoreditch neighborhood.
-- Retailer magazines: Just a few weeks ago, high-end retailer Barney’s launched a print magazine dubbed Window. It features magazine-style feature writing, and loads of photos of items you can buy at Barney’s brick and mortar operation.
The content for Barney’s Window is based upon what the retailer learns about its customers through its blog, also called Window. And no doubt one factor that Barneys considered when launching Window magazine was that rival high-end retailer Net-a-Porter had launched a magazine last year.
On the flip side of the retailer-becomes-magazine equation, take a look at Giant Robot.
Back in 2004 two young guys launched a low-end, ‘zine about Asian and Asian-American youth culture. By late 2005 the magazine had caught the attention of media watchers (including me) who were fascinated by its a) embrace of print, rather than digital, b) disregard for the conventions of print publishing, c) ability to attract and grow a community, and d) decision to open Giant Robot stores that sold the hip items featured in the magazine.
Today the magazine is gone. It closed up in 2011. But the original store continues on.
Personal-finance storefronts: In 1972 Time Inc. launched Money magazine. It wasn’t the first publication aimed at teaching personal finance to less-than-wealthy folks (that was Kiplinger’s, which had been around since 1947.) But it was revolutionary.
Money magazine brought an upscale, full-color magazine sensibility to what had been seen as a black-and-white, boring-as-hell subject.
Sales soared. And Money has ruled its category ever since.
In the online world, things have been different. Today Money magazine is part of CNNMoney (full disclosure, I worked as a journalist at CNNfn, which was rebranded after it was merged with Money and some other finance publications in 2004.) It’s still a huge brand. But personal finance became a hyper-competitive space online after blogs such as Get Rich Slowly and communities like WiseBread gained followers.
The digital disruption in personal-finance media has led the giants of personal-finance advertising to seek alternative ways to reach consumers. And increasingly they’re opening retail spaces to do so.
Among the most interesting of those ventures is the Society of Grownups club in Boston. SOG is bar/bookstore/restaurant hybrid owned by the MassMutual insurance company. The retail space is about as soft sell as can be. SOG offers courses in personal finance, but you can’t actually buy any MassMutual products there. Rather, SOG is aimed at building credibility among Gen Y consumers.
ING Direct, the pioneer of online-only banking, has also moved into the retail space -- but not by opening brick-and-mortar banks. Rather, ING has gotten into the cafe business. The ING shops serve coffee and deli sandwiches, and offer free courses in money management.
State Farm has taken a similar approach, opening a cafe-and-courses operation in Chicago.
The unifying theme here is that companies that sell personal-finance products are acting like personal-finance magazines – teaching money management without emphasizing their own products. But rather than doing it in print or online media, they’re doing it in real-world stores.
New-media shopping: In 2004, two newly mint grads from the University of Pennsylvania moved to New York, just like untold numbers of their generation were doing. The following year they created an email newsletter, and sent it to 600 of their friends. That newsletter became the basis of the Thrillist Media Group, which collected $13 million in funding, $40 million in revenue and 9 million members in less than a decade.
TMG describes its mission as “helping guys live fun lives.” And that is exactly what they do -- if you’re young and your idea of fun involves young women, alcohol and reading articles about amphibious robotic war balls.
In other words, TMG is a newsletter version of the “laddie” magazines craze of the late 1980s.
But TMG is also a retail site. It owns JackThreads, a membership-only shopping site for guys.
TMG has had tremendous success with email newsletters for Gen X guys. But such products can feel a bit dated among the very young, particularly people who like to communicate in the newest of digital languages -- emoji-filled texts.
The king of that space is Japan’s social-media phenomenon Line.
Line offers an app that lets users make free phone calls and send free text messages. The core of its appeal, and the core of its “language,” are its proprietary emojis -- many of them featuring a bear named Brown and a bunny named Cony.
Line earned $656 million in revenue in 2014. That’s no small accomplishment for a social media company that offers free phone and text services.
So where is that revenue coming from?
Much of it comes from upsells of more complex emojis. But much of it also comes from the sale of Line merchandise.
And recently Line opened its own retail outlet, dubbed Line Friends, to sell that merchandise directly.
Turn the page
Whatever it is that’s happening here -- retail turning into media, or media turning into retail, or both -- there is a precedence for the merging of industries. And it comes from very recent history.
Until just a few years ago the worlds of media and marketing were two distinctly different animals. But that’s no longer true. The industry known as content marketing is probably best understood as a merger of the marketing industry with some of journalism’s functions.
Content marketing is about telling stories and connecting with an audience. And the methods of content marketing have become so pervasive that it’s widely accepted in 2015 that ‘everyone is a publisher” and “content marketing is the only marketing that’s left.”
Companies that make and sell stuff have learned that they can publish their own content and reach customers and potential customers directly. Manufacturers can be a magazine. Consulting companies can be newspapers. Everyone can be a publisher. And no one needs to be just an advertiser.
As a result much of the media and marketing worlds have been absorbed by each other. You can think of it as a merger of industries, or an assimilation of one industry by another, or as the birth of something new from the marriage of media and marketing.
When content marketing first emerged as an industry of its own a few years ago, I found it to be both exciting and full of promise. I shifted my entire career away from business journalism and into content marketing. Dozens of my peers made the same move.
And here’s the rub: today I’m the director of content marketing for the NPD Group, the nation’s leading researcher of consumer behavior at retail. That might mean I’m close enough to media, content marketing and retail to see that something is happening and that industries are once again about to merge. Or it might mean that I’m too close to the scene, that I cannot see the forest for the trees, as they say, and that I simply spend too much time wondering what the future holds.
But here’s my advice to my old comrades in the media world:
Brace yourself. More change is coming. And it may be time to start repositioning for a new career as a cashier/copy editor, editorial director of consumer packaged goods, managing editor of merchandise, or some other unimaginable hybrid of media and retail careers.
(What do you think? Are the retail and media industries morphing into something new? What can retail learn from media? Feel free to share your thoughts as a comment on the original version of this story.)
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