Wanderful launching big-deal initiative to protect & expand newspapers' insert business
With years of development and a $22 million start-up investment, the newspaper industry will roll out a new tool aimed at "fun, local discovery shopping" on 327 sites this Monday.
The timing coincides with the Newspaper Association of America's annual mediaXchange conference in Orlando. It is a big-deal initiative in trying to protect and expand newspapers' lucrative preprint/insert business -- variously estimated at $4 to $ 5 billion a year -- in the dawning mobile era.
Even if you, like me (a journalist, male, settled in my buying preferences), don't find shopping fun at all, the success or failure of this venture will be consequential. To be specific, it will help determine whether your favorite newspaper organization has the means to pay your salary over the balance of this decade.
The new company, Wanderful Media, is owned by a dozen newspaper companies. Its platform is built atop the existing Find & Save branded site and incorporates iCircular, an earlier Associated Press effort to bring coupons to smart phones.
What is different, according to Wanderful's announcement, is such "a collection of digital circulars" turned out to be yesterday's product, modestly appealing at best. What the gung-ho shopper really wants now, Wanderful contends, is an entertaining experience, planning and organizing tools, personalization, geo- and time-specific alerts and a social media overlay.
One intriguing slide in Wanderful's planned presentation to the mediaXchange conference Monday, details what its developers think makes avid shoppers tick. Their research identified five "key...drivers or needs:"
1. People love to save money.
Even if it's irrational relative to time and resources.
2. People feel like they miss out on sales.
They never find out or they forget.
3. People are inspired by others’ tastes.
Shopping can be social, fun and even voyeuristic.
4. People want to show off their shopping expertise.
Some thrive on sharing knowledge and taste.
5. People are hoarders by nature.
They enjoy collecting stuff, even virtually.
I spoke by phone this week with Wanderful CEO Ben T. Smith IV and executive vice president (and former IDEO designer) Dave Thomsen, who explained new features they considered most important:
- Provide "great shopping content," as Thomsen put it. "Our job is to provide an even bigger bundle (than the typical collection of Sunday print preprints) and bubble the best of it to the top through crowd-sourcing and personalization."
- Provide the means for the shopper to organize a list of things to look at or buy that she can easily carry with her on a smart phone. They also provide direct links to the websites of participating stores -- which, in this start-up phase, will mostly be national chains like Walgreens and Target, with regional and local stores added later.
- Allow the curious shopper to access the shopping lists of others in their community by topic -- say backyard barbecuing gear -- or to exchange lists with friends via social media.
- Let those who want reminders to set up customizable alerts indicating when an offer is about to expire or when they are geographically close to the participating store.
The business model has not changed radically since I wrote about the launch six months ago, but Smith mentioned several refinements.
As planned before, there will be no charge to participating retailers this year. The principle is that this will be a beta run, and Wanderful needs to demonstrate traffic and results before charging.
However some companies, Smith said, will from the start be "paying for prominence" within the Find & Save listings.
Most of the selling will be done by the staffs of participating newspapers as a free upgrade for top preprint advertisers. However the platform is open to advertisers who do not use print as well. For instance, Smith said, he has found some interest from catalog companies whose voluminous listings do not adapt especially well to a weekly print insert but can be a link away in digital formats.
I was also curious to find that Find & Save does not have or envision any direct buying/e-commerce component. There are plenty of potent players already in that space, Smith said, and there is a significant expense and complexity to building out that capacity.
"Besides" he continued, with the new mobile-enabled version of circulars, "retailers still have a priority of driving people into the stores."
Whenever I've written about Wanderful and its predecessors, I have raised the concern that however nifty all this sounds in concept, shoppers already have an array of digital discounts and other tools for finding what they want and comparing prices. Lately, as I stand in the Starbucks line, I see many people paying for their purchases with a smart phone scan as well.
As veteran newspaper analyst John Morton wrote this week, in the American Journalism Review, one can shop by going directly to the sites of Home Depot, Target or Amazon, compare prices, order and then get the goods delivered in a day or two, often for free. Advertising is left out of that loop.
Smith did not really disagree that only a real-time run will determine whether the enhanced platform fills a need. The make-or-break will be how many people use Find n Save and how they use it.
"Number one, you've got to actually do it to find out," Smith said, "but, number two, knowing others are doing it and liking it" can drive potential customers to try for themselves, as happened in a huge way with Facebook and a smaller way with Groupon and other deal-of-the-day products.
The sites of the 12 owner companies access 100 million unique visitors a month, Wanderful claims. So that is a good pond in which to fish and a reasonable gamble on finding one of those sustaining new revenue streams newspaper organizations so critically need.