Updated from April 27 to include Amazon's move into content in the seventeenth paragraph.
Style.com will no longer be home to fashion news and instead will be transformed into an e-commerce site, launching first in the U.K. this fall and in the U.S. in early 2016. The editorial content will be moved to voguerunway.com. According to Jonathan Newhouse, chairman and chief executive at Condé Nast International, the company will be investing more than $100 million in the new e-commerce venture.
Style.com will launch as an e-retailer with around 100 to 200 brands, mostly with luxury fashion, but also touching on technology, beauty, gifts and art. The site will function as a marketplace, taking an as yet-to-be-determined commission from brands' sales but not actually owning any inventory on its own.
As publishers search for new ways to monetize content, the blending of e-commerce and editorial has emerged as a strong contender.
With the U.S. e-commerce market alone expected to reach $395 billion in 2016, according to the U.S. Department of Commerce, and the global e-commerce market already valued at $1.5 trillion, Condé Nast is wisely expanding to the promising new business line.
The Style.com Web site was launched in 2000 as the original home for Vogue content, but since 2010 when Vogue launched its own independent site, the two pages have been overlapping in content, causing Condé Nast to rethink its strategy. The site redesign also follows a reorganization of Condé Nast executives announced in November and the suspension of Style.com's print magazine in December 2014.
"Vogue.com in the U.S. is going through a massive growth period," Bob Sauerberg, president of Condé Nast, told Business of Fashion. "We are investing into it and expanding it to create that as our premium digital fashion destination. It's about getting behind Vogue.com and taking much of the content at Style.com and bringing that content and the audience over to Vogue."
Condé Nast declined to give an official comment for this story.
New York-based Condé Nast has already been showing an interest in e-commerce for some time now, having invested in online fashion startups Moda Operandi, Farfetch and Vestiaire Collective, but now it's making a huge jump on its own.
Condé Nast itself recently spun off its publication Lucky Magazine, merging it with e-commerce platform BeachMint to form The Lucky Group.
In 2007, Time Inc.'s (TIME) InStyle launched InStyle Shopping, and in 2012, Hearst'sHarper's Bazaar launched the shopping site ShopBazaar. Then there's Refinery29, which launched in 2005 as an editorial and e-commerce mix right from the start. The fashion startup claims 36 million visits per month, 258 million page views, and over two million email subscribers. It has raised $80.4 million in funding from investors including Scripps Networks Interactive, Hearst, Lerer Hippeau Ventures and First Round.
Plus there's the age-old tactic of affiliate links, where a consumer clicking on a link in an article and making a purchase on a secondary link (Amazon (AMZN) - Get Report has an affiliate link program, for instance) drives a percentage of the revenue to the publisher of the original article.
"Publishing content has a huge influence of commerce and buying decisions, both online and offline," Manning Gottlieb OMD Head of Mobile Mark Brennan said in an email. "It makes sense that a publisher wants to monetize this link somehow. Publishers like MailOnline do this with already with female fashion finder operating on an affiliate model. Condé Nast is going one step further by owning the point where media meets commerce, and [it] could be incredibly profitable for them."
The idea of non-retailers entering into e-commerce makes complete sense to Gartner Managing Vice President Gene Alvarez.
"Organizations who have traffic to their Web site are seeking ways to take advantage of that traffic," he said. "So it doesn't surprise me that a publisher would look to enter into the e-commerce game as a result of the traffic they're getting. We will see more organizations who have high volumes coming to their site that are not sellers thinking about this approach since they have traffic already."
The story goes both ways, with e-commerce players adding more and more content to their sites in hopes of drawing in repeat customers and attracting more traffic. ASOS and Net-a-Porter are just two of the many e-commerce brands that offer their own fashion content.
Even Amazon is getting into the content business, showcasing third-party editorial content on its homepage.
In a tweet yesterday, the founder of product review site The Wirecutterwrote: "Amazon ran an experiment using editorial on their home page today and their first test was using @wirecutter content." This partnership could drive more traffic to Amazon's site and help direct consumers to various product offerings.
However, as the worlds of editorial and e-commerce merge, the question of trust arises. Can a site that sells products on its own remain unbiased when writing about trends? Will readers trust it to not simply promote its own products?
Condé Nast "must ensure that editorial independence stays intact, and that it does not appear to be influenced by commercial pressures from Style.com," Brennan said.
Another major challenge is whether Condé Nast will have difficulty attracting advertisers once it establishes itself as a competitor to other online retailers. "What may have once been viewed as an advertising channel may now be viewed as a competitor," Alvarez said. "It'll be interesting to see what it does to Style.com ad revenue. There are advertisers who use [Style.com] to drive traffic to their site; if those sales aren't being passed on to them they might view it as a competitor."
Condé Nast is likely betting the new revenue from sales will offset any losses from advertising. Yet, the true answer will come from consumers and whether they start to view Style.com as a seller or continue to see it as a place to gather information.