1) Ipsy, queen of the beauty subscription box, unveils Shopper, a members-only, direct-to-consumer site.

What happened

  • Ipsy, a subscription service that began in 2011, sends members Glam Bags, which include a personalized bounty of five full- and/or sample-size items for $10 a month. Now with Shopper, an exclusive marketplace, Ipsy members can peruse and purchase from more than 200 beauty brands. Eventually, the company plans to sell all brands represented in its Glam Bags on the ecommerce site.

Why it matters

  • Much like Prime, which requires customers to sign up for a membership before experiencing any of its exclusive services, anyone who wants access to Shopper will have to become an Ipsy member first—for the cost of $10 a month or $110 a year. For those who are already members, Shopper thanks them for their loyalty by offering an exclusive ecommerce site and other benefits like cash back.
  • However, for a company that built its membership on the element of discovery, Shopper’s success will depend on whether it is able to convert samples in the Glam Bags into recurring purchases on its marketplace—one of the main failures of fellow beauty subscription company Birchbox, which was acquired in May after seeing low conversion numbers and caving under distribution and marketing costs. At the same time, Ipsy has a much more solid financial ground than Birchbox, particularly thanks to its solid YouTube and Instagram presence and army of influencers who cut down marketing costs.

2) Boutique and vintage sellers turn to Instagram and WhatsApp to launch on-demand mobile shopping.

What happened

  • Vintage vendors and boutique owners—with and without a brick-and-mortar presence—are utilizing Instagram and WhatsApp to augment sales and build their brands. Evading the Shopping feature now available to brands on Instagram, these sellers post product images on the app along with the size, price and other relevant details, which sell first come, first serve. Shoppers can direct message the account with their zip code to reserve an item and receive a shipping price calculation—then they finalize the purchase via PayPal, Venmo, or another money sharing app.

Why it matters

  • On-demand Instagram and WhatsApp shopping allows vendors to sell items quickly—scrolling to find a one-of-a-kind vintage piece compels consumers to act fast if they don’t want to lose out and they’re rewarded with instant gratification. This urgency around a purchase is an effective combination of mobile availability, time sensitivity and product exclusivity, much like an auction. It’s also a way for brands and retailers to dodge the geographic and time constraints of business hours and physical stores, giving them access to a much wider breadth of customers by meeting them where they already are, or where they are most comfortable—mobile commerce is the preferred shopping method in some cultures, as African boutiques and vintage shops have found.
  • Selling on Instagram comes at next-to-no cost to a brand; if the seller is using it to supplement their brick-and-mortar business, it’s simply an avenue for additional sales. However, these vendors are also beholden to Instagram. In 2016, the app began using algorithms to personalize the user experience. Instagrammers no longer see a purely chronological feed, which problematizes on-demand vintage sales—viewers may miss out on new posts by vendors, which subsequently affects the vendors themselves.

3) Retailers invite brands to advertise with package inserts to win face time with online shoppers.

What happened

  • Retailers including Zulily and Saks Fifth Avenue are utilizing a new marketing service called UnDigital, which connects them to brands seeking to advertise. On UnDigital’s site, brands list the number of packages they want their inserts to be found in, and the retailer determines the price per insert, typically between 10-20 cents. UnDigital handles the transaction, prints the inserts and sends them to the retailer’s fulfillment center.

Why it matters

  • Even if customers aren’t going into stores in favor of shopping online, they’re still receiving a physical item in the mail that comes with its own—albeit small—square footage. Figuring out how to maximize the area of a parcel to offset shipping and other ecommerce costs is a main draw for retailers, which continue to see their margins steadily decline even as ecommerce sales rise. Instead of product samples and in-store coupons, auctioning off space in packages for advertisements is one way for retailers to reclaim some of this lost revenue, even if it doesn’t promote the retailer’s own vendors.
  • In turn, advertisers get face time with consumers, who find the inserts upon opening a package—a similar method to Amazon, which is optimizing the valuable real estate on its packaging, using it like a billboard to promote Prime, Prime Video and Kindle devices. This channel isn’t just a boon for digitally-native brands, but also a way to diversify marketing and avoid rising digital advertising costs—since 2011, for example, the price of an ad on Facebook has grown more than 17 times. Though physical ads like billboards don’t lend themselves well to metrics, UnDigital lets advertising brands include unique links on their inserts in order to track conversion rates. But ultimately, it seems that for brands, the effectiveness of the inserts is dependent on how well the ad appeals to the retailer’s customers—only then is it likely to direct traffic in the brand’s direction instead of going straight to the recycling bin.

4) MoviePass acquires Moviefone in the hopes of bolstering its business with advertising revenue.

What happened

  • Founded in 2011, MoviePass offers a $9.95 monthly subscription service, which allows members to see up to one free movie a day and a $7.95 monthly membership for up to three movies each month. But because MoviePass pays its theater partners the full price of every ticket, the company is in financial jeopardy, already operating on a net loss.
  • The merger between MoviePass—a movie ticketing subscription service—and Moviefone—a former dial-up service for movie listings that is now a site for online movie times, ticketing, apps, reviews and other related editorial—is meant to save MoviePass from drowning.

Why it matters

  • Though MoviePass has managed to change consumer behavior in some ways—members are more likely to see a movie when it’s basically free and the company found that members spend 123% more on concessions than typical moviegoers—its business model would be wholly unsustainable if not for the data the company accesses from its approximately 2 million members.
  • That’s the main reason why MoviePass sold a majority stake to the data company Helios and Matheson Analytics in summer 2017—and it’s now completing the circle with MovieFone, whose site brings in about 6 million uniques every month. With the new merger, MoviePass and Moviefone will be able to collaborate, funnelling customer data into media and digital advertising that will feed MoviePass revenue. In turn, MoviePass will be able to buffer its own business as well as reel in more subscribers.