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Jul 12, 2004
How To

How Pier 1 Integrates Online & Offline Branding, Staffing, & Marketing Budgets

SUMMARY: If you're struggling with getting online and offline marketing departments to coordinate and cooperate with each other, you may get some insight from this article.

We asked Pier 1 executives to reveal their behind-the-scenes operational solutions for integrating everything from branding and budgeting to marketing staff hires. Plus, info on how they juggle sales goals for brick and mortar stores versus ecommerce.
With no catalog channel, Pier 1 had no direct fulfillment infrastructure or experience to draw on when building their website. Which turned out to be better news than you'd think.

They had to take their time about launching online, to make sure they were doing it right. As EVP Marketing Phil Schneider explains, "We didn't want to fall into the trap of making a lot of mistakes just for the sake of being able to have something out there quickly."

While the site was taking shape, the 'Net bubble burst, taking yet more time pressure off the project. Steve Woodward, Senior Manager Internet Operations, notes, "It allowed us to step back and really do things the right way."

The result of this considered approach? Woodward says, "We take integration to a different level."

But what does that mean in practice? Here are four integration strategies Woodward and Schneider revealed...

#1. Integrating online and offline objectives

The Pier 1 site includes an ecommerce store featuring around 60% of the products sold in the company's 1100 stores (the larger furniture items are missing). And it's profitable.

But that's not the site's main objective. As Schneider explains, "First and foremost we look at it as a marketing tool more than a revenue source."

Indeed, most of the online efforts target offline sales...

One example: An "in touch" email marketing program which sends weekly messages to opt-in addresses collected in stores, notifying customers of promotional events, as well as new product arrivals and promotions.

Another example: A wicker seating sale currently highlighted on the homepage (most wicker seating is unavailable through the online channel). Woodward comments, "Everything we're doing online for this month is primarily focused at driving offline revenue."

Woodward admits that supporting offline sales through the online channel isn't new, but it's the declared emphasis that's important..."I don't think most sites are as bold as to say that primarily their site's a marketing tool; which in reality they all are."

As such, the site's official purpose is to support the organization as a whole, immediately reducing the typical internal organizational tensions that come with a new channel. Woodward says of the stores, "They're amazed at what we can do online to help them sell product at the store level."

Another benefit is that positioning the site as a marketing tool keeps internal expectations manageable.

Woodward explains, "If you had asked senior level management what they thought the potential of online was, you would probably have gotten a full spectrum of answers...we decided to manage our own expectations by saying let's look at this thing mainly as a marketing vehicle because we know it will do that for us."

#2. Sharing company-wide resources to keep ecommerce staffing low

Pier 1 manages everything about the website in-house, except fulfillment and a little online media buying. And yet the ecommerce department is relatively small.

Woodward says, "We made the decision to use our existing organization and infrastructure as much as possible to support the website..." (Schneider adds) "...without adding more layers to the organization."

ecommerce hiring policy is to only create a new position if it doesn't already exist within the organization. The only staff in "ecommerce" are one search engine marketer, Web designers, and a merchandise person to coordinate all the information required for the online store.

Woodward notes, "Those are unique positions with a unique set of responsibilities that did not exist anywhere else."

So the ecommerce team works with colleagues in, for example, the company's core marketing, merchandising, and IT departments. Which means these departments fulfill multi-channel roles, another factor working against internal conflict.

Schneider explains, "They assume some ownership and responsibility for ecommerce as well, so there is more support, as opposed to looking at it as a competitive area that is taking time, money, and business away from brick and mortar operations."

Nevertheless, Schneider and Woodward note that real cross-channel cooperation also depends on communicating the company-wide benefits of online throughout the organization, through a training video and face-to-face contact.

The "in touch" email program is an example. Woodward says stores only really started collecting email addresses in earnest once they understood the benefits.

#3. Integrated multichannel brand messaging

Schneider says integration also means consistent on- and offline messaging and creative..."so if you go onto our website, you're going to see a similar graphic look, feel, copy tone, copy direction, and messaging to what you see in our more traditional offline marketing efforts."

Integrating website responsibilities into existing departments facilitates such consistency, of course, which operates at two levels.

First, the basic Web design has to reflect key brand elements. Customers most frequent, and creative exposure to Pier 1 is through, the company's newspaper inserts, so these were used as a basis for defining the look of the website.

Woodward explains, "What do people associate you with the most? For us, it was our newspaper inserts. It's just taking out very simple, but very specific, elements of that brand -- colors that you use, design elements that you use -- and incorporating them into the site."

Second, it requires continuity of marketing promotions across channels. Woodward says, "If your strongest offline message is the latest sale that you have going on, then that should be your strongest online message."

#4. Integrating budgeted marketing priorities and measurements

A natural consequence of organizational integration is also that online investments are not judged in isolation, but simply as part of the total set of plausible alternatives for the business.

Woodward explains, "From my standpoint, my project really needs to get done because every other website in the world is doing it and I feel like I need to do it to keep up. However, it may not be making the biggest impact on Pier 1's business overall. We prioritize it just like we would prioritize any other project within the company."

This concept applies to evaluation, too. Schneider explains, "Do we measure the success of the website solely on the amount of profit that it generates? No. We measure it from the standpoint of the level of support that it provides to all areas of the business."

But how do you measure the bottom line impacts of that support in order to gauge online success?

It's difficult. However, the website generates profits through the online store, so the marketing benefits have "no cost" attached anyway.

Woodward notes, "Would we be as happy with it if it wasn't making money? No, that's also important to us. You've got to balance those priorities. You can look at it as a great marketing vehicle that pays for itself."

In addition, the offline response to online initiatives like email marketing are measurable to some extent. And you can measure success by proxy.

Example A: Track improvements in visitor and visit statistics.
Example B: Monitor customer feedback in emails and phone calls.
Example C: Use industry benchmark figures on how online spend relates to increased offline spend.

Forgetting the online store profits for the moment, is the site judged a success? Indeed it is.

Woodward says visitor numbers have climbed from 400,000 per month in 2000 to almost 3,000,000 per month in 2004. He notes, "More and more people are finding value in this. It tells us that this is something people want."

Note: Pier 1 is a member of Shop.org, a forum for retailing online executives to share information, lessons-learned, new perspectives, insights and intelligence. More info at http://www.shop.org
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