Opportunities to Consider for 2009

(In no particular order...)

1. Integrate cross-channel databases, linking web behavior with promotional history
2. Improve buyer definitions on house segmentation and list rental files- identifying pure web onlys vs. catalog-driven web onlys
3. Revisit testing across the board- more cost-effective creative versions, prospect sources outside of core files, contact strategies for lapsed customers and requestors, etc.
4. Launch at least three forms of auto-triggered email marketing, such as shopping cart abandonment
5. Consider replacing some of your core catalogs with smaller, less-expensive brochure-like pieces intended to bring the brand top of mind and drive the customer to your web and retail channels of business
6. Concentrate on lapsed customers with multi purchases (vs. dollar spent) who have purchased at least 1x in each of the prior 2 yrs but who have not purchased in the last 12 months; test sending them a special mailing, ie: we miss you with an offer
7. Offer customers contact preferences for method and frequency- perhaps some customers only want the first catalog of each season
8. Find one way to leverage social media for your business- it comes in many forms!
9. Revisit non-traditional advertising opportunities like space advertising and package inserts
10. Talk about how to reach the growing, affluent youth market- the traditional catalog customer base is aging
11. Consider brand/product spin-offs to increase share of wallet with your existing customers- still cheaper than cold prospecting
12. Consider mobile marketing and a dedicated mobile website, especially if you have a younger audience and/or a large retail presence
13. Offer additional payment methods: BillMeLater, Google Checkout, PayPal, etc. According to a recent article, sales increased an average 14% for retailers offering 3 or more payment methods (Website Magazine, August 2008)

$3.00 for One Click?

Back in my days in Ecommerce at Eddie Bauer and RedEnvelope, success was so easy!! Clicks for major keywords cost, at most, $0.75; all of our reporting was purely cookie-based, without any understanding of how many of our web buyers were influenced by offline marketing. Our ad cost was 15% (or so we thought). It was fun- we were all rock stars.

Online marketers are just now feeling the pinch that direct mail marketers have been feeling for the last few years. As catalogers have battled rising costs across the board, online retailers are now faced with incredibly high costs, driven up by competition:

Cost per click for the keyword “gift baskets” - $3.00 (on a good day)
Cost per click for the keyword “food gifts” - $1.80
Affiliate revenue share for the shoe category- 25%
Cost to send an 80-page catalog- $0.65

We also know that, depending on the retailer, 30% to 60% of the buyers from paid search and affiliates were first mailed a catalog.

Two scenarios:

$100,000 Spent on Non-Branded Paid Search
$2 Cost per Click
50,000 Clicks
3% Conversion Rate
$100 AOV
$150,000 in Sales
67% Ad Cost, not including the cost of any catalogs mailed to these buyers

$100,000 Spent on Catalogs to Targeted Lapsed Customers (Reactivation)
$0.65 Cost per catalog
154K in Circulation
2% Response Rate
$100 AOV
$308,000 in Sales
32% Ad Cost

Acquisition, in all forms (paid search, affiliates, catalog prospecting), is more expensive than ever in this economy. Two recommendations for your 09 planning:
1) Housefile Reactivation, via email and direct mail
2) Website initiatives to improve conversion rates- these efforts will improve the ROI of all marketing programs