HomeNotificationsNewslettersNextShare
Group Nine Media's last attempt at e-commerce ended in mass layoffs, but it's trying again with a fresh approach
Advertising

Group Nine Media's last attempt at e-commerce ended in mass layoffs, but it's trying again with a fresh approach

  • Group Nine Media is seeking a senior executive to build an e-commerce business as it tries to diversify its revenue.
  • Group Nine's lifestyle site Thrillist's past e-commerce operation, JackThreads, ended up laying off most of its staff and getting sold.
  • But CEO Ben Lerer said the company will take a different approach this time and factor in lessons from JackThreads.

Group Nine Media, the parent of NowThis, The Dodo, Thrillist, and Seeker, is taking another stab at building an e-commerce business.

The company's e-commerce ambitions go back to 2010, when Thrillist Media Group, one of Group Nine Media's four brands, bought JackThreads, then a 2-year-old flash-sale site. It used the site to help recommend products for its male readers of Thrillist and helped propel Thrillist to a nearly $100 million business in 2014. Ben Lerer, then Thrillist's co-founder, talked of it becoming a $1 billion business.

JackThreads switched to a try-at-home sales model selling full-price items that let people try on as many things as they wanted without paying upfront, but it didn't catch on and was unprofitable. By 2015, JackThreads was spun off into a standalone business. In early 2017, it laid off most of its staff and was put up for sale.

Read more: 2019 is expected to be another terrible year for media brands, but publishers like BuzzFeed and Refinery29 have a plan to survive

Media companies have often found it's hard to blend their businesses with e-commerce because they have to master new disciplines like brand development, sourcing and shipping, and customer service. E-commerce is a low-margin business. Plus, JackThreads was trying to crack a crowded market for clothing, and Amazon is eating the e-commerce world.

Still, publishers including The New York Times and Hearst have managed to grow revenue from e-commerce by linking out to retail sites and getting a cut of the sales from products they recommend without handling all aspects of retailing themselves.

Fast forward to today and Lerer, now the CEO of all of Group Nine, is ready to take another stab at e-commerce. He said it's time for Group Nine to try again as the company needs to have a better mix of revenue streams.

"Revenue diversification is important," he told Business Insider. "We made massive progress last year, but nobody is where they want to be. I want to be wildly diversified, and we're not wildly diversified."

Group Nine is taking a different approach this time

Group Nine is advertising for a senior executive to head up the effort.

"The Executive Vice President of Commerce (EVP) is responsible for building and implementing a commerce business that encompasses licensing, affiliate advertising, and direct-to-consumer product in order to generate substantial new revenue streams and meaningful brand elevation across Group Nine," the job description reads. "The EVP Commerce will lead all aspects of licensing, merchandising, direct-to-consumer products, and commercial affiliate relationships, with domain over specialized personnel as well as brand and corporate resources."

Lerer said JackThreads was actually doing well when it was sold, but that the new strategy will be different this time around.

"I'll certainly factor in lots of learnings from that experience (and from my experiences at Lerer Hippeau), but this is really about finding organic extensions of our brands rather than building a totally different standalone commerce business that we own," he said. "This will be about brand licensing, affiliate sales, offline experiences, and some very tactical product creation to start. And some other things that I'm not ready to talk about yet."

Lerer is an investor at venture-capital firm Lerer Hippeau Ventures, which is also an investor in Group Nine.

Group Nine is private and Lerer wouldn't share financials but said the company has shown "plenty of growth."