Merchant Innovation

Retail Bedfellows Roundup: eBay Gets Busy, Alibaba Gets Angry (Birds)

Retailers Shake On Odd Partnerships

It might have made sense, according to the rules of retail a decade ago, to keep your friends close and your enemies closer, but the pace of play and rising consumer expectations of 2016 make it obscenely hard for any company to go it alone. Even Amazon needs to rely on contractors and an albeit shrinking network of logistics providers to make its global shipping network run on time. However, with revenue in some markets growing as scarce as the consumers who used to generate it, some retailers are finding that reaching across the aisle — or several unrelated aisles altogether — and forging partnerships with strange bedfellows might be their best bet to make it into, and stay, in the black.

 

eBay's High-Class, High-Speed Deals

Once upon a time, auctions were expensive affairs that saw priceless art, historic mansions and maybe an impounded sports car or two sold off to the highest bidder. Thanks to years of eBay, though, anyone in the world can now lowball his or her way to whatever trinket is up for sale. Perhaps that's why eBay has begun a partnership with Sotheby's, the original old-money auction house.

The two halves of the auction world coin decided to join forces for a limited-time-only event. On Tuesday (May 10) and Thursday (May 12), Sotheby's conducted live, high-margin auctions of artworks from a dappling of famous names — Dalí, de Kooning, Pollock — all streamed through eBay's site, alongside the in-person auctions being held by Sotheby's agents in New York City. While it might seem like a natural extension of each brand, the move shouldn't be underestimated. Sotheby's and other high-priced auction houses have been, to say the least, reluctant to let their rarified business transition online, and eBay has sorely missed out on this growing market that regularly sees millions of dollars change hands with a single transaction.

Case in point: An Andy Warhol piece up for auction on Thursday through the Sotheby's-eBay joint venture fetched $1.3 million. That's a big deal for the non-couture member of the duo, as the only purely eBay auctions to fetch prices in that range have been yachts, homes with built-in fallout shelters and unincorporated townships.

That's not all eBay has been up to recently. Selling more expensive products is always a boost to business, but it won't mean much if sellers and eBay itself still have to shell out for ever-increasing delivery costs to please their now more demanding clientele. For that purpose, eBay is getting into bed with FedEx. The two companies announced a deal that will see 1,600 dropoff locations for eBay's Valet shipping concierge service pop up at existing FedEx store fronts by the end of 2016. EBay Valet, which takes a 10 to 20 percent commission from eBay sellers' revenue in exchange for the tedious work of listing, packaging and shipping items, has failed to gain traction since launching in 2014, but getting it in front of customers' eyes in the physical world — and letting them know there's an alternative to USPS — could give the eBay-FedEx alliance the boost it needs.

 

The New York (Dinner) Times

Five years ago, it looked like the entire newspaper industry wouldn't be around long enough to see 2016, but at the very least, the larger traditional media companies have managed to settle themselves into a period of slow, depressing decay instead. The New York Times, for one, isn't going down without a fight or without its dinner first.

NYT and on-demand meal delivery startup Chef'd have — surprisingly — signed a deal that will allow subscribers to purchase meal ingredient kits featured in the paper's Cooking section. Meals will be delivered less than 48 after purchase and include instructions that will help readers put together dinners just as NYT's own foodie editors do. The paper and Chef'd will split the revenue down the middle, but no word on who gets the last forkful on the plate.

While it all might seem a bit gimmicky, the NYT-Chef'd venture could end up being the first in a long line of tie-ins for a newspaper that's seeing traditional revenue streams dry up.

“We wouldn’t do this if we didn’t think there was a revenue opportunity,” Alice Ting, vice president of brand development, licensing and syndication for NYT, told Bloomberg. "This is definitely not the last one."

 

Lowe's Dips Toe Into On-Demand Waters

Unless they like paying property taxes and keeping up on a hundred different upkeep jobs, nobody ever bought a home for the sheer simplicity of it all. However, homeowners are like every other consumer today in that, even if they're buying a five-piece patio set with assembly required, they expect the process to be as convenient as can be.

Lowe's couldn't have managed these desires in-store alone, so it went out and struck a deal with Porch to have installation and assembly service available from ATGStores.com, an independent Lowe's subsidiary. While store-to-home assistance may undermine the ideals of the do-it-yourself revolution, ATG President Michelle Newbery explained that it's now incumbent upon retailers in the home improvement market (e.g., Wayfair and Amazon Home Services) to explicitly provide for "consumers’ home improvement needs from concept to completion."

Therein lies the potential trouble with Lowe's moving away from its large store footprint (both in an individual location and a collective business sense) — the more it partners with Porch and other online-only home improvement brands, the more its brick-and-mortar operations could become a liability.

 

Alibaba Doesn't Get Even — It Gets Angry Birds

Once upon a time — oh, seven or eight years ago — smartphone games were nothing more than time-wasters for the bus. Fast forward to 2016 when it's become a multi-billion dollar industry, and "Angry Birds," a pioneer in tappable distractions, is days away from releasing "The Angry Birds Movie" on May 20. The advertising and retail tie-in potential is as massive as the screens "Angry Birds" grew popular on are small, and Alibaba is making sure it gets more than just a piece of that revenue pie.

In fact, Alibaba's licensing partnership with Rovio, the developer of "Angry Birds," ensures that no other retailer in China can get a piece, either.

The Alibaba-Rovio deal sees Jack Ma's online marketplace gain exclusive rights to "Angry Birds consumer product licensing and eCommerce in China." While it'll still be up to the government to make sure bootleg products don't flood the Internet, Alibaba at least boxes out rivals, like JD.com and Tencent, from sucking up some Angry Birds merchandising revenue with the movie's release.

Alibaba isn't planning on sitting on the exclusive license, though. Tian Po, Alibaba's general manager for licensing cooperation, said that the firm is already looking into leveraging it "to the existing brands already doing business on our retail platforms for creating new licensed products."

Angry Birds? Minus Alibaba's network, it'll be more like Angry Brands.

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