Nov 17, 2020 - Economy

Exclusive: Dotdash brand The Spruce strikes commerce deal with Lowe's

Dotdash

The Spruce, one of the largest home decor websites on the internet, is launching its own organization product line in every Lowe's store in the country, executives tell Axios.

Why it matters: It's a major step for Dotdash, the parent company to The Spruce, in its effort to move into e-commerce. To-date, Dotdash has been profitable by focusing on internet advertising around evergreen content.

  • It brought in $50.8 million last quarter and made about $16.2 million in profit, putting it on track to hit close to $200 million in revenue and $50 million in profit this year.
  • It makes a majority of its money from internet ads, and a large minority of it from affiliate marketing, taking a cut from product recommendations it links to.

Details: The Spruce Organization Collection was developed by The Spruce's editorial team and housewares design company iDesign in partnership with Lowe’s.

  • It includes an original line of containers and bins to maximize the use of space at home.
  • "The products are a natural extension of what we're great at," says Mélanie Berliet, General Manager of The Spruce. Organizational content on the Spruce's website has doubled since the pandemic, she notes.
  • The deal includes a revenue share, whereby Lowe's pays Dotdash a percentage for each sale. Spruce's branding and logo will be on all products and boxes.
  • Lowe's and Dotdash will help co-market the product. Lowe's will benefit from Dotdash's online marketing expertise and audience and Dotdash will benefit from Lowe's massive retail footprint of over 2,000 stores in North America.

Between the lines: This isn't Dotdash's first foray into commerce, but it's certainly its biggest.

  • In 2019, it launched a paint line with Amazon via The Spruce. "Paint is a small category but it's been a smashing success," says Dotdash CEO Neil Vogel. It's also experimented with selling pet care products from The Spruce on Amazon.
  • In the future, Vogel says it's looking to launch products for floor coverings and rugs, laundry and soft goods.
  • He says it may also develop its own products to do more direct-to-consumer marketing around its beauty website Byrdie.
  • Another category that Vogel is eyeing for potential commerce partnerships is food and beverage. The company acquired Simply Recipes and Serious Eats in September.
  • Dotdash now has a full-time, centralized team that helps to manage business deals around its commerce products. That team works in close collaboration with its editorial brands, who get full license over how the products look and feel.

The big picture: The pandemic has pushed internet publishers to more seriously consider commerce as a part of their strategies.

What's next: For now, the organizational products are being sold exclusively at Lowe's, but Dotdash is looking at ways to bring a unified direct-to-consumer commerce offering to its own properties in the future.

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