Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
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ShopBazaar doesn't carry or hold stock. Instead, it fulfills the majority of orders through Saks Fifth Avenue or directly with designers. Revenue is shared between Harper's Bazaar and the retailer or designer who ships it. Smith won't disclose the percentage share but says it is "significantly higher" than typical affiliate arrangements. Affiliate fees vary by network but typically range between 15% and 20%. ShopBazaar also generates revenue for Hearst with on-site advertising and sponsorships. For example, American Express Co. and Saks are ShopBazaar's "platinum partners" and are listed at the top of each web page.
Even though an order may arrive in a Saks box, to further brand the shopping experience, it also includes an envelope containing a thank-you note from Harper's Bazaar editor-in-chief Glenda Bailey, a note to call the stylist with questions and information about the origins of ShopBazaar [see image, page 78].
Smith says Hearst executives green-lighted the project in part because they saw the potential for other Hearst titles to drive online sales. "They figured if I could get this working for Bazaar, they could take the platform and make a store for Town & Country, and a store for Esquire and so on. They see a much bigger e-commerce opportunity for Hearst Corp."
For web-only e-retailers, the reverse also runs true: they see opportunity in editorial content.
Wayfair.com is generating content in two ways. Over the last 18 months it hired five editors, including a Better Homes and Gardens veteran, to develop material for what it calls its Idea Lounge. It is also tying in content from print magazine editors.
Last September, for example, Wayfair added a section to its site merchandised by the editors of Time Inc.'s Coastal Living. The section includes short articles, recipes and design tips from previous issues. A Coastal Living-written article called "Seaside Holiday," for example, appears alongside products Wayfair sells that complement the story's theme. There's also a link to sign up for a subscription to the magazine.
"We don't think there's just one solution in coming up with editorial content," says Wayfair CEO Niraj Shah. "We're convinced the curation of product and editorial content are pieces of the mix that make the ultimate home store shopping experience." He says Wayfair will announce more content agreements with other publications this year.
Furthering the partnership, CoastalLiving.com features a "Coastal Living Boutique Pick of the Week" on its home page, which directs consumers to the relevant product page on Wayfair.com. The e-retailer and publisher have a revenue share arrangement and a secondary agreement based on engagement with Coastal Living content. Shah declined to reveal details.
"Inspiration is found in shelter magazines. They provide the visual imagery in all sorts of settings that inspire you to want to shop," Shah says. "What we're doing is connecting our catalog to that content so you can continue to explore and buy. All of a sudden we can connect the dots."
With e-retailers and publishers moving to blend their strengths, what's likely to emerge are breeds of content-rich sites that will aim to inspire consumers to confidently shop, and shop more often.