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Honeyshed is Closing - Don’t throw the baby out with the bathwater

Adweek is reporting today that Honeyshed.com, a trendy MTV/QVC style online store will be shutting down. Publicis, the main backer of the site has decided to pull the plug on the business, after 15 months of existence.

The site had a few good ideas on the content side, successfully blending ecommerce content with entertainment to create a compelling user experience inside the video player. According to Adweek, the site accrued over 117,000 visitors in December, which isn’t so bad given the site’s low tech approach to e-commerce which makes it hard to compete against established retailers (basic ecommerce features, virtually no SEO, limited video sharing capabilities, awkward shopping experience).

Honeyshed didn’t succeed not because it didn’t have a good video player or the best shopping cart out there. With more patience and solid backers, this site could have done relatively well over the years. The biggest flaw in the Honeyshed model is content distribution. By comparing itself to QVC, the Honeyshed founders probably shot themselves in the foot and inflated expectations. Both QVC and HSN had a massive initial asset: a large audience thirsty for deals on day one, which they continued to build up over the years with cable companies to reach millions of users.

Stepping back and looking at the bigger picture, video commerce is likely to take off growing off existing e-commerce operations, because it offers a simple value proposition to the site’s owner: video improves conversion, increases loyalty and minimizes product returns. The Honeyshed setback is neither good nor bad news for the video e-commerce. Just stay away from comparisons with QVC for the time being and focus on the bottom-line.