National Geographic's Newest Expedition: E-Retailing

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The National Geographic Society has made its first investment in an online retailer.


The 112-year-old society has taken a 19 percent interest in Novica.com, a Santa Monica, CA, retailer of handcrafted arts and home décor from developing countries. National Geographic has the option to buy up to 30 percent of Novica.


"We think it will help us ... reach new audiences, broaden our own product offerings through our commerce channel and extend our efforts to foster a greater understanding and appreciation of world cultures," said Rick Allen, president of National Geographic Ventures.


National Geographic's only other outside online investment is a 30 percent stake in iExplore.com, an adventure travel site that does limited e-commerce through the sale of travel packages. The society also held a minority interest in MapQuest.com until the site was sold to America Online Inc.


National Geographic, Washington, will offer Novica access to its editorial content and support from retail, online and catalog channels. The institution will also provide marketing support through links on www.nationalgeographic.com.


"Through the NG alliance, we will receive the benefit of increased awareness with a group of people that are highly interested in world art and culture," said Roberto Milk, CEO of Novica.


The Novica home page already is co-branded with the National Geographic name in the masthead.


"Over time, you'll see our content appearing on the Novica site," Allen said. "On our site, we'll be creating an area within our Web store for world craft, which will feature Novica. We're also looking to feature Novica products within our catalogs. Our catalog group will be buying items from Novica, and we also intend to source products through Novica for our stores and also our other retail presence, like store-in-store."


Novica will soon serve as wholesaler to National Geographic.


"In a circumstance where our Web store acts as the retailer and has purchased the product from Novica, it would act as a standard retailer and get the retailer's percentage," Allen said.


Launched a year ago by Novica United Inc., the site at www.novica.com features nearly 8,500 products from markets such as India, Zimbabwe, Mexico, Brazil, Central America, the Andes in South America, Thailand, West Africa, Cuba and Venezuela, as well as the Indonesian islands of Bali and Java.


Products featured on the site include Peruvian tapestries, African masks, Balinese sculptures, Mayan statuettes, Thai silk sarongs, Indian Pashmina shawls and Cuban paintings.


Novica claims its prices are lower than the traditional channels, with most of the product's price going to the local artisan.


The retailer has nearly 200 employees in 12 sourcing, quality assurance and fulfillment centers throughout these markets. These employees have developed on-the-ground relationships with local artisans.


"These are local citizens who not only work with artisans to source products, but then serve to collect that product, do the quality assurance process, and pack it and ship it to the United States," Allen said.


But it is not just incremental sales and added online, offline and catalog traffic that National Geographic is eyeing through its ties with Novica. The bottom line still is return on investment.


"Our principal effort is to drive the business of Novica where we would benefit as a shareholder," Allen said.
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