Dive Brief:
- Publishing giant Condé Nast shut down Style.com, its first attempt at fashion e-commerce, a mere nine months after its launch, as reported by The New York Times.
- Condé Nast reportedly invested more than $100 million in the website but has now ceased all operations, according to a statement released Tuesday. The Style.com URL now re-directs to Farfetch, a digital marketplace for high-end boutiques which Condé Nast was an early investor in.
- Condé Nast first rebranded Style.com in 2015 in an effort to evolve the website past its previous role as a digital home for runway coverage. Shuttering the site is a setback for the publisher, which is still trying to meet the challenge of decreased print advertising spending while adapting to the digital age. Matt Starker, the general manager of digital strategy at Condé Nast, told the Times that the skill sets required for creating content and effectively running an e-commerce business were different.
Dive Insight:
A number of publishers are looking to establish e-commerce businesses as print advertising revenues continue to dwindle and digital headwinds like ad blocking technology shake up the industry. Condé Nast competitor New York magazine has seen success integrating e-commerce into its publishing business, per Digiday, and digital sites like BuzzFeed are also experimenting with an online shopping strategy.
Style.com's failure suggests that not all legacy media companies are making the transition smoothly, and are also not accounting in full for the heavy demands of running an online marketplace. The Style.com news underscores what seems to be a major missed opportunity for Condé Nast, as luxury e-commerce is poised to be on the rise. McKinsey & Company predicts luxury e-commerce sales will triple over the next 10 years with the online share of all luxury sales reaching 18% at $78 billion by 2025, per data reported by the Times.
High fashion as an industry is moving away from some of its traditional advertising channels like print as well. Brands such as Louis Vuitton and Gucci are shifting marketing dollars to social media and online advertising, increasing digital ad spending 63% in 2016 compared to 2013, according to Zenith Media data.
