While the GQ Store's product selection is limited, there are indications the magazine can boost revenue from merchandising. The magazine already has a subscription box that charges $50 every three months, or $190 a year, for a collected of products selected by GQ's staff. That Best Stuff Box has nearly tripled its revenue this year and has a retention rate of more than 75%, the magazine confirmed by email. GQ also has more than doubled revenue from GQRecommends, an affiliate sales site that generates commissions for the title.
The GQ Store is the latest addition to Condé Nast's various ecommerce efforts, which include the Condé Nast Store that sells licensed merchandise, along with online outlets such as the Vogue Shop and the Wired Store. Meanwhile, rivals like Meredith and Hearst also have online stores among their media properties.
Ecommerce is seen as a source of growth for almost every media company, including social networks like Facebook and internet search companies like Google. Both are blamed for draining ad dollars from publishers. They all recognize the advertising market is a mature, low-growth business, even with pockets of strength in digital media and newer formats like connected TV.
However, yearly growth in the U.S. digital ad market is forecast to decline to single digits in the next few years, according to researcher eMarketer. That outlook means companies that depend on advertising revenue will need to find new sources of growth, and explains why Facebook and Google have ramped up their ecommerce efforts in the past few years. Google is feeling the pressure, having recently experienced the first decline in ad revenue in its 26-year history as the pandemic dampened demand.
Amazon and traditional retailers, such as Walmart, Target, Best Buy and CVS Pharmacy, are moving in the opposite direction with the expansion of their digital ad networks to reach shoppers when they're most ready to tap on the "buy" button. Amazon not only saw a 40% jump in ecommerce sales in the second quarter, but its advertising business grew by the same amount -- perhaps the best example of the confluence of content and commerce.
With retailers reporting big jumps in online orders among homebound consumers, publishers should consider how they can participate in those faster-growing businesses and diversify their revenue. That can include affiliate sales or online efforts like the GQ Store.