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.
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February 3rd, 2009 at 7:29 pm
Nice post X. Agreed on the reason for failure, although more retailers will continue gravitating toward QVC-style production - especially as e-commerce sites become savvier about missed revenue opportunities on the product page and seek to create differentiated content.
I also wouldn’t want people to read this and think there isn’t a viable intersection between entertainment and e-commerce. YouTube is helping prove there is with its click-to-buy program, and others in the market are doing well here also.
Last, I agree with your insight that most revenue from video in the e-commerce world is built on the back of core merchandising operations, rather than from ad revenue or syndication of video content. Two years from now, it might be different, but today it’s just not playing out that way. Those opportunities will continue to be interesting to probe… but right now it’s all about getting back to the core business.
Justin
February 4th, 2009 at 4:30 pm
@Justin Foster
“I also wouldn’t want people to read this and think there isn’t a viable intersection between entertainment and e-commerce.”
It’s too early to tell if there is, or not, I agree. But Honeyshed would be a good example of what tends to happen when a company tries to both be funny/entertaining, and sell products at the same time. It’s hard to be good at both.
As far as eRetailers are concerned, the most successful entertainment/e-commerce mix I’ve seen is the Altrec, which I will write about soon (see this example: http://youtube.com/watch?v=zlbnAOK5Y2k). But even there, I wouldn’t call that entertainment. It’s more a conversational approach to showing and selling a product (much like HSN/QVC in fact).