“Amazing news! Congrats! Where do you want to get married? Have you thought about destination wedding? Are you thinking Spring or Fall wedding? What color will your bridesmaids will wear??” – My future mother-in-law…30 minutes after my fiancé proposed.
Planning a wedding? If so, you’ve most likely visited TheKnot.com (an XO Group brand) at some point during the process (8 out of 10 brides visit and use The Knot). With 6.1 million monthly unique visitors and over two times the relative market share of its closest competitor (WeddingWire), The Knot has become the #1 wedding website offering its users extensive listings on local wedding services (venues, bands, caterers, etc.), personalized planning tools for managing budget and calendar, images/articles for trends and inspiration, general wedding/etiquette advice, active community forums, and product suggestions supplemented through The Knot’s ecommerce shop.
The Knot has essentially become the largest, trusted online wedding resource. The platform creates value through its ability to cater to a variety of users with varying levels of need — from being the “one stop shop” for individuals who need lots of handholding through the planning process (e.g. “I just got engaged, what do I do next?”), to being the “only-as-needed” directory for those who simply want to do research trends or look up a vendor. Rather than relying on the referrals and contacts of a sole wedding planner or a single vendor, users of The Knot have access to some 300,000 local vendors across the country and utilize the thousands of user reviews to best compare their options. With the average wedding cost now at $31,213, The Knot offers the opportunity to compare services easily and reliably; by creating a platform that allows users to sort by reviews, price, service, theme, and location, The Knot has helped streamline and alleviate a lot of the stress that often accompanies planning such an important life event.
Despite its large and growing user base, The Knot does not charge users to access the platform. Some value is captured from users through The Knot Shop (its ecommerce platform), it’s print magazine, and its wedding website business, where users can pay to upgrade from the largely freemium model for customized website features. However, The Knot captures most of its value from local and national vendors looking to advertise their services to the millions of users on the site and in their print magazines. Vendors can pay additional fees to receive preferential/sponsored search listings with higher visibility.
Like many other platforms, we see direct network effects coming into play with the users on The Knot. As the user base grows, the value derived from other users increases through the additional reviews provided and increased online community engagement (e.g. “the more reviews and personal stories I can read about this user’s experience with this band, the better I feel about reaching out to and booking the band.”).
We can observe indirect network effects between The Knot’s user community and vendors/third-party companies. Vendors and other companies that are targeting young couples stand to benefit from The Knot’s large user base through more targeted marketing as many of the users are likely to visit The Knot to research a variety of tangentially related aspects to weddings on The Knot.
XO Group (parent company of The Knot) has clearly realized the value in creating a platform with huge network effects – especially in an “evergreen” industry that continually renews itself year after year (an average 2.3 billion marriages each year in the U.S.). The XO Group has sought to build on its existing community by offering an even broader proposition: assisting its users in other major milestones in life after the wedding through The Bump (for expecting/first time parents) and The Nest (for first time home owners).