May 06, 2004
SUMMARY: MarketingSherpa Editor Janet Roberts just got back from attending the Annual Catalog Conference in Chicago, and here are her notes for you, including:
- Cataloger Ulla Popken discovers appended names respond differently from traditional opt-ins
- How The Bombay Co Uses email to promote in-store events
- How Bloomingdale's Direct rebuilt online from the rubble
Plus, 75% of attendees in one session said they're having problems with email delivery - ouch:
How are catalog direct merchants incorporating email into their marketing programs? This week we went to the Annual Catalog Conference in Chicago to find out for you.
Two trends stood out:
#1. Email delivery is still a massive headache for many catalog
In every email-focused session, at least one participant asked about improving delivery issues, even if it was off the session topic. During one session, a speaker asked the 100-or-so attendees in the room how many had problems getting emails past filters. A good 75% raised their hands.
Vendors from email broadcasters such as Yesmail, DoubleClick and Lyris also told us delivery issues were the top concerns they heard from show booth visitors.
#2. Knowledge about and confidence in using email falls off pretty rapidly.
When we sat down at the luncheon, naturally the first question we asked everyone (all of whom were marketers for established catalogers) around the table was, "What are you doing with email?"
Their answers startled us.
One company did no email at all. The second did send out emails with product promotions, but nobody knew whether the program was managed in-house or outsourced to a vendor. (Turned out the IT department managed it.) And email was so far off the radar screen of the third company that the marketers declined to say anything on or off the record. It was a non-issue for them.
So, if you're in the catalog field, using email may still be a significant competitive advantage. If you're a vendor or consultant hoping to market services to catalogs, you may have to do more 101 education than you'd expected.
Luckily we did run into some catalogers who are testing and using email successfully. Here are three of their stories:
Cataloger Ulla Popken discovers appended names respond differently from traditional opt-ins
Appending is still a controversial practice among catalog marketers. Unscripted debates on using it erupted during several conference sessions between panelists who use it and those who don't or counsel vehemently it.
When done right, you can double your house file by appending email addresses to your postal file, but you have to test and track appends separately, because they don't always behave the same way as people who sign up at your Web site or via email.
Be patient, too. It took six months for Ulla Popken, the women's plus-size clothing cataloguer, to earn back the money it spent on appending opt-in email addresses to its postal file.
"It takes time, but the quality is better, and it's less expensive than renting," VP/Marketing Phyliss Mosca said.
Today, their append file size roughly equals the "traditional" file of email addresses who opted in at its Web site at just under 50,000 each. How do appends behave differently from Web opt-ins? "They're more cautious," Mosca said. They respond better to limited-time incentives, while traditional customers jump on preseason discounts and catalog sneak previews.
Instead of going with an outside appending service, Ulla Popken used its contract database manager, Mosca said.
It matched its own list of people who had agreed to receive third-party offers against Ulla Popken's postal file and sent the email invitation to join the Ulla Popken list.
First results were pretty disappointing, Mosca said. "Our first offer got 10% of average sales." The company began by sending every two weeks, then moved to a weekly schedules.
Which offer worked best? Free shipping for the next three days. Which bombed? "Don't miss our best-sellers."
Timing is a factor, too, Mosca said. Ulla Popken traditionally promotes one season ahead -- a 3-day discount on fall merchandise just went out, for example -- which traditional customers respond to better than appends.
How The Bombay Co Uses email to promote in-store events
Sometimes, you have to plan and test every move of a special promotion. Sometimes, you just wing it.
The Bombay Co., which combines catalog, Web, phone and store shopping, did that with a recent email promotion and pulled in $1 million in one weekend.
How'd they do that?
"We said on Thursday morning, let's have a sale Friday, Saturday and Sunday and see what happens," said VP/Internet Marketing Matt Corey.
The company sent out an email offer -- take $20 off a $100 purchase or $50 off $200 -- with a unique barcoded source code to its 600,000-address email list. Shoppers printed out the coupon and took it to stores.
By tracking the source code, the company found that for every $1 the promoted generated online, it produced $10 in store sales. The usual ratio is about $6 to $7 in stores for every dollar spent online, Corey said.
The promotion didn't occur in a vacuum, though. The company had already expanded its house email file from 20,000 address to the current 600K by aggressively using every channel at its disposal: promoting email sign-up via store signs, its Sunday newspaper inserts, bag stuffers and sales associates who talked up the benefits.
Not on the list: collecting names at check-out. "The bag stuffer worked a lot better," Corey said. "If you have seven people in line, don't ask. Your methods have to vary according to the customer mood."
How Bloomingdale's Direct rebuilt online from the rubble
Bloomingdale's Direct saw owner Federated merge its online program with catalog retailer Fingerhut and Macy's and then get shut down in February 2002 after Federated closed Fingerhut and the Macy's By Mail print catalog.
VP/Marketing Charlie Silver and Valerie B. Davis, Marketing/Internet director, outlined what the company did to bring back the division at low cost and sort of under Federated's radar.
"We weren't even supposed to be in this Internet space because we had been shut down," Silver said. Bloomingdales By Mail was the only catalog left standing after the Federated shakeup, and its Web site was designed only to help market the stores.
Starting in April 2002, customers could click on a catalog quick-order site, but she had to type in the product number herself. No image, nothing to assure the customer that she was ordering what she thought she was ordering.
The first monthly catalog email promotion featured a graphic of a woman in a nice leather jacket. The promotion pulled in $700. Total. Yikes.
By November 2002, Bloomie's had put their catalogs online, including product pictures. Shoppers could browse by categories, but it took 3 to 4 clicks to get to a product page.
At this point, the online division generated 8% of total sales.
By June 2003, the company had remodeled its online catalog, adding more browsing options and cutting the click process to 1 to 2 clicks to a product page. Online's contribution: 15% of sales.
By early 2004, the site was redesigned once again, to maintain all the benefits of online shopping but with more content on the homepage and tie-ins to the print catalogs and special events.
Online's contribution: 20%. In dollar figures, the division rose from $7 million in annual sales to $30 million. "And, it's an incremental increase, not just a channel shift," Davis said.