3 key elements to Mediahuis’ profitable e-commerce strategy

By Shelley Seale

The folks at Mediahuis use a very narrow definition of e-commerce in order to focus their efforts concisely: The sales of all non-news, content-related products through Web shops. This includes multi-media, tickets, travel, books, and jewelry, among other things.

“A few years ago, we saw that both circulation and advertising revenues were stagnating,” says Griet Ducatteeuw, director of consumer markets. “On the other hand, we had this great opportunity of reaching a big and commercially interesting audience. 

So we created Web shops per news brand to create new revenues [that were] non news-content related. This was important for our news company since we had no possibilities of cross- or up-selling with our media products. It made us explore new domains of sales to our audience.”

While clear that e-commerce is not their core business – commercialising news content is – Mediahuis considers it an interesting opportunity to create new revenues from readers and Web site surfers. It also provides an opportunity to strengthen the connections with its audience and experiment with the fast growing domain of e-commerce.

Ducatteeuw identifies three evolving elements of the Mediahuis e-commerce strategy, which have had varying levels of success:

  1. Promotion-driven Internet storefronts (no long tail). In the beginning, a Web shop was created that specialised in a broad assortment of books. The company quickly discovered that this was the wrong strategic choice at the time.

    With very low experience in the domain of e-commerce, the company did not manage to outperform other e-commerce players with similar offerings. Mediahuis was slower, more expensive, and gave less service.

    The company then changed its strategy to doing what it was already good at: finding strong, temporary promotions for its audience.

    The company began to focus on quality and A brands, which led to:

  2. Communication through news channels. An important success factor is the broad communication power that Mediahuis gets through its news brands. Through the newspaper, Web site, and e-newsletters, the audience is driven to the Web shops. 

  3. Strong connections with news brands. The Mediahuis Web shops are connected to its news brands in a very explicit way: De Standaard Shop, Het Nieuwsblad Shop, Gazet van Antwerpen Shop, Het Belang van Limburg Shop.

While this has the advantage of creating immediate trust with customers, it also creates limits as to what can be sold in the online shops.

“The product has to fit in the universe of the news brand,” says Ducatteeuw. “The shops have the names of our news brand so there is a very strong relationship. This means that we have to be careful in which product to sell in the shops. Some books or jewelry can be suitable for our popular brands, but not for our more niche brand.”

The connection with the news brand means that the Mediahuis Web shops sell only quality products, preferably A brands. From the visitor’s perspective, it is as if the news brand suggest the product and have chosen it specifically for that audience. So the product must be of high quality and service. 

“This also creates pressure on the service level,” Ducatteeuw adds. “Every good — but also every bad — experience with the shops that our readers/surfers have, will be related to the news brand. So we focus on strong promotions, trust, and strong communication.”

Though it was a difficult start, Mediahuis managed to get the Internet storefronts on the rails using a small, dedicated team. It has become a profitable side business, with a profit margin in 2013 of about 30%. With a more professional approach and some experience, revenues are now growing quite rapidly.

“Of course we are also surfing the natural growth of e-commerce in Belgium,” Ducatteeuw says. “We have strong promotions, good service, and clear communications.”

The plan for the future is to build on this model, becoming more professional in the technological area to create smarter shops and smarter communications through profiling, in order to better target the audience.

“This is still new business for us,” Ducatteeuw says. “So there are very little ‘no nevers.’ We are exploring new possibilities every day and are dealing with new challenges every day. The only limits we have are our connections to the news brands, but it’s a limit we cherish, since it is also our strongest asset.”

About Shelley Seale