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MarketingSherpa Email Summit 2015 - SAVE $700 - VIP PRICING ENDS THURSDAY
Nov 29, 2006
Case Study

How a Luxury Retailer Mines Customer Base to Improve ROI With Limited Analytics

SUMMARY: Even some of today's fastest-growing companies don't have their Web divisions set up the way they want or need them to be. How can you compensate if you don't have precious data on visitors because you don't have a proper analytics program?

Discover how email helps an emerging luxury retailer produce enviable results while overcoming their data deficiencies. Multiple campaigns, creative samples and open rates, clickthroughs and conversions.

Plus, a valuable lesson learned when reaching loyal-vs-VIP customers.
CHALLENGE
“If you don’t have a lot of data, a lot of how you perform depends on if you interpret your situation as a positive or as a negative,” says David Manela, VP of Channel Development at upscale fashion retailer Vivre Inc. “We focus on what our positives are when we go about marketing.”

Manela’s can-do philosophical approach has played a major part of the 10-year-old company’s entrepreneurial ascent. In the early days, they relied almost solely on a thin mailer and grew to a full-scale book that reaches 1.2 million catalog subscribers. But since going online in 2001, they’ve boasted 30% overall growth year over year, doubling sales for four out of the past five years.

Growth hasn’t been easy since Manela and his team have never had the back-end technology to track individual user activity on the site. In short, the ability to record past purchase history has been as sophisticated as it gets.

With such a limited view of Vivre’s upscale customer base (their average order size is $550 and their customer’s average income is $150,000), how can Manela continue to achieve such skyrocketing growth?


CAMPAIGN
Despite their database limitations, Manela and his team have managed to segment their house file into other lists, including Loyal & Recent Customers, VIP Customers and buyers from big-name designers.

Then, offers were emailed to the whole file or tailored messages to specific groups based on buyers’ spending histories. Vivre’s brand and image have stayed consistent throughout all emails -- a look that's similar to a glossy fashion magazine layout: big headlines, large photos, breezy flow and short copy.

“Telling a story is absolutely key to what we do in email, the Web site or the catalog,” Manela says. “It’s what we strive for.”

In recent months, his team conducted four email efforts with an eye on demographics, theme and merchandising, as well as an A/B test to see how loyal customers would perform against their VIP list:

Email #1. Reaching the right demographic

Designers are like rock stars to the retailer’s 73% female demographic. That’s why Manela closely watches shopping carts to track customer purchasing habits as they pertain to each designer. Being able to center on brand and personality gives an edge that he understands must be manifested.

“When someone gives us peeks of what products or designers they identify with in terms of lifestyle, we build upon it.”

Top designer Oscar de la Renta always gets attention on the red carpet at the Academy Awards, so Manela hoped a “front row with Oscar” email blast to past de la Renta buyers would generate similar buzz. He wasn’t afraid to mention price either: The email featured three handbags ranging from $650 to $2,200, a pair of $415 velvet sandals and a $4,900 cashmere embroidered coat.

Email #2. Discount offer, plain and simple

When sending to their house file, Manela likes offers with a straightforward merchandising message. This summer, they used a 65% discount for their “The End Is Near, The End Is Here” email. The email served as a way to heighten customer affinity to both the Loyal & Recent and VIP segments and also clear end-of-season inventory.

They wrote “Last Chance For Hot Summer Savings – Now 65% Off” for the subject line and used a dominant creative element by simply showcasing a woman in a bikini, stylish beach hat and sunglasses and holding handbag.

Email #3. Focusing on theme over a special offer

In contrast, Manela was interested in seeing whether a campaign based on theme would perform better than a special offer to the full file. They sent a “Grey Matters” email that relied on a layered product display filled with gray apparel/accessories.

The subject line declared: “The Season’s Smartest Color -- Grey Matters.” A sidebar section called “Eva’s Favorites” was dedicated to favorite picks from 36-year-old company founder/frontwoman Eva Jeanbart Lorenzotti.

Email #4. Cross-segment merchandising test

Manela wondered what would happen if he sent the same offer to the Loyal & Recent Customer and VIP Customers files. What if their tastes and disposable incomes were more similar than he had thought? Perhaps the Loyal & Recent file was willing to spend more than they knew. This could be a way of better understanding individual patrons without the detailed analytics.

They conducted an A/B test: sending the same offer -- a crocodile-skin handbag by designer B. Romanek that starts at $1,625 -- to both segments. The subject line read: “The Most Glamorous Clutch in the World.”


RESULTS

Manela ended up pleased with three of the results and back to the drawing board with the other. “Direct marketing has always been the way in which we promote the brand, and email this year has helped us continue growing sales in a way we are happy with."

As for individual results, the Oscar de la Renta campaign showed that Vivre's patrons are, indeed, designer loyal: The email sent to past de la Renta buyers saw a 38.2% open rate, 15.9% clickthrough rate and 8.9% conversion rate.

Proving that the masses, indeed, love a sale, the late-summer discount obviously hit a hot button. The straightforward style of merchandising worked at a high level. Results-wise, it had a 15.2% open rate, 5.4% clickthrough rate and 4.9% conversion rate.

The layered merchandising strategy also performed well. The “Grey Matters” email actually had a higher open rate -- 18.1% -- than the late-summer discount message. And it had a 5.9% clickthrough rate and 3.4% conversion rate.

“Being able to stand behind a strong merchandising selection has always been a part of our most successful email campaigns,” Manela says. “It’s a combination of marketing and merchandising coming together like a story that makes a direct effort work.”

The cross-segment test brought home numbers that Manela and his team will learn from. Some campaigns are simply a better fit for Vivre’s VIP-only base. WHile the VIP Customers file had open rates of 29.2%, clickthrough of 8.9% and 5.9% conversion rate, the Loyalty & Recent Customers file had a 19.2 open rate, 3.9% clickthrough rate and measly 1.2% conversion rate.


Useful links related to this article

Creative samples from Vivre:
http://www.marketingsherpa.com/cs/vivre/study.html


Silverpop – the email service provider Vivre relies on:
http://www.silverpop.com


Vivre:
http://www.vivre.com





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