Targets near and far

Dec 01, 2006 10:30 PM  By

When travel accessories merchant Magellan’s sends out a catalog, the company is not always hoping for a mail order sale. The Santa Barbara, CA-based multichannel merchant also relies on catalog mailings to drive traffic to its brick-and-mortar stores in Santa Barbara and Santa Monica, CA.

And it works. “A lot of folks come in with every corner of a catalog bent down,” says Magellan’s marketing director Lynn Staneff. “They have looked at the catalog very, very carefully and have figured out what they want.”

Many merchants think of catalogs and Internet sites as ways to reach customers who don’t live near one of their stores. And while the direct channels do serve that purpose, they can also increase sales from nearby consumers. All it takes is a slight tweaking of the message and an understanding that where a customer hails from often determines how he will make his purchase from a merchant.

A dot whack on the cover of Magellan’s catalogs sent to customers within 100 miles of a retail location promotes the stores and mentions that parking is readily available. “We actually get folks from 100 miles away. They will make a day trip out of it,” Stabeff says, noting that e-mails also pull buyers into the stores.

All other factors being equal, customers’ geographic location should play into a merchant’s marketing plan, experts say. Increasingly, many marketers are relying on sophisticated technology to determine whether a consumer will be a local or a distant shopper and altering their message accordingly.

“From the farthest outreach backward, it’s all about the basics of who is my audience and where is my audience, and when and where will they be most receptive to what I have to say,” says Erik Hauser, creative director at Swivel Media, a San Francisco-based marketing agency. “Companies should be getting more creative in the way they reach consumers.”

Driving the traffic

They should also be measuring the affect of their various marketing programs on their in-store response. Catalogs, for instance, traditionally are measured based on direct response. But if a merchant is sending catalogs to customers who live within 10 miles of a store, direct response is likely to fall short of the average, because the catalogs are driving recipients into the store instead, notes consultant Stan Fridstein, managing director of Synapse Infusion Group in Agoura Hills, CA. “Direct response rates tend to correlate on an inverse relationship from the distance to the store,” he says.

If the merchant didn’t factor the in-store response into the equation, it might think that sending catalogs to people who lived near a store was a waste and cut circulation in those zip codes. The result would then be a drop in retail sales.

By collecting retail customers’ names and addresses or phone numbers at the point of purchase, however, the merchant can begin to see the effect of a local catalog drop, Fridstein says, and determine how marketing budgets need to shift to support the “in area” catalog mailings.

“The shrewd multichannel merchants,” Fridstein continues, “have one thing in common: a database that is capturing key information about buyers across all channels so that we can begin to understand whether Stan Fridstein is a catalog buyer or a retail buyer.”

A similar approach can be used in online search marketing, where merchants buy keywords in certain geographies but not others, Fridstein says. “With the enhanced technology, a message to a local buyer might be different from a message for someone who doesn’t live in the area,” he says. Just as free shipping can help close an online transaction, an in-store discount or free gift with purchase can drive retail traffic.

In fact, local search is rapidly becoming a key driver of store traffic, experts say. Six out of 10 U.S. Internet users performed a local search using a search engine or directory in July, up 43% from the previous July, according to comScore Networks in Reston, VA. What’s more, 47% of local searchers visited an area merchant as a result of their online search, comScore reported.

Search engine giant Google now offers “geo-targeting,” a feature within AdWords that allows advertisers to target consumers in specific locations based on their IP address, says Shailesh Rao, director of local search at Google. “Through the IP address, Google can identify the location of the user and tailor ads based on where the user is.” (For more on search marketing as a retail traffic driver, see “Searching for the retail value of SEM,” page 56.)

Channel agnostic but…

Most multichannel merchants will tell you that they don’t care as much about which channel a customer uses, so long as he uses it to buy from them and not from the competition. But a number of merchants would prefer that customers who live near a store purchase in store rather than via the Website or phone. It’s often advantageous to drive local customers to brick-and-mortar stores, where average order sizes rise thanks to impulse purchases.

So while the catalogs that Eden Prairie, MN-based Golf Galaxy sends to direct customers highlight new products, for instance, the postcards it sends to local customers are intended to draw buyers to one of the company’s 65 stores. “The call to action is to visit our store,” confirms director of marketing Justin Royer.

Golf Galaxy stores typically draw customers from a radius of about 15 miles, Royer says, but people will come from farther afield for some in-store events, such as its preferred-members-only shopping evenings in August.

The cataloger/retailer promotes most of its in-store events via direct mail postcards and e-mail notices. “We tend to error on the side of more vs. fewer communications regardless of where they are,” Royer says.

Federated Department Stores, the parent company of retail chain Macy’s, mailed a 54-page magalog in September to drive store traffic and “introduce shoppers to Macy’s,” says spokesperson Jim Sluzewski.

Following its acquisition of May Department Stores Co. last year, Cincinnati-based Federated converted 400 brick-and-mortar locations, including Filene’s, Marshall Field’s, and Famous-Barr department stores, to Macy’s stores. To relaunch the Macy’s brand nationwide, it invested in a national multichannel marketing blitz that included print and television ads and the magalog, which mailed to 3.8 million households. Federated is supplementing the national effort with local ads and store events to appeal to customers of the properties it acquired.

Local ads and inserts enable multichannel merchants to tweak their message by region, just as they often modify their in-store merchandise by region. “The model is a national brand with local execution,” Sluzewski says of Macy’s. “It’s a diverse country. You can’t put out one product that’s right for everyone, especially in the fashion industry.”

The company’s free-standing inserts are developed in seven geographic divisions, where weather issues and color preferences take the forefront. What’s more, the shopping preferences of customers in a given region also come into play. “For stores whose trading area caters to classic customers, we will have a different assortment from one that caters to leading-edge fashion customers,” Sluzewski says.

What’s good for Gander


St. Paul, MN-based Gander Mountain no longer has a catalog, and its Website is not transactional. But the outdoor sporting goods merchant’s stores draw customers from ever-greater distances, thanks to its multichannel marketing programs that run the gamut from television programming to in-store seminars.

Gander Mountain understands that fishing and hunting are regional in nature. “The way you catch a large-mouth bass in Minnesota vs. Florida can be vastly different,” says Mark “Buz” Bussard, vice president of sales. As a result, its local marketing messages vary.

Last year the company distributed about a dozen store circulars via the mail, inserted in newspapers, and in its 105 stores. The circulars promoted products as well as upcoming store events, with the content varying somewhat to reflect local preferences.

The mailing radius for the circulars “will vary depending on the size of the market,” Bussard says. In-store events, such as an appearance by Olympic archer Rod White and classes on hunter safety, can draw shoppers in from a greater distance than usual.

Gander Mountain looks for opportunities to strengthen brand awareness. “Television reaches places we don’t have stores, so it’s a good method to catalyze the pioneering of future locations,” Bussard says. The company’s three-year-old “We Live Outdoors” show currently airs on the Versus channel (formerly Outdoor Life Network) several times a week. While Gander Mountain does specifically track how the show affects store traffic, “when we highlight products on the show, we will see a noticeable increase in sales of those items,” said spokesperson Tim Martin.

Gander Mountain has been fighting for the right to use its brand name and logo in direct marketing for more than three years. It had sold its direct business to Cabela’s in 1996 for $35 million, forfeiting the right to use its name and logo in direct marketing campaigns. “We’re not prohibited from selling online, but we can’t use the Gander Mountain logo and brand name” at this point, Martin says.
AM

Fannie May minds the store


A careful store design can be an effective marketing strategy, encouraging consumers to check out a store more frequently, says Erik Hauser, creative director at San Francisco-based marketing agency Swivel Media. Hauser points out Apple Computer’s minimalist design, which has an open and airy feel that encourages visitors to browse. “Once they’re in the store, retailers should be looking to provide the most pleasant shopping experience,” he says. Increasingly, marketers are beginning to incorporate aroma, more open space, and less clutter.

Candy merchant Fannie May, for instance, last month opened a new-and-improved flagship store in Chicago. The new store is 3,400 sq. ft.; the former flagship had been a more modest 800 sq. ft. Four additional Fannie May stores were scheduled to open in Illinois by the end of the year, bringing the company’s total to 55 stores.

In addition to making the flagship store bigger, Fannie May has nixed the old red-and-white interior in favor of an upscale look with terrazzo flooring. An island in the middle of the store now showcases a variety of new products, from gift baskets to towers of treats, says director of marketing Jan Waanders. What’s more, an in-store candy-dipping demonstration area will add entertainment. “We’re trying to create in-store excitement,” Waanders says.

The new store format is part of an effort to win back the core Fannie May customer as well as to appeal to new buyers. “We have a more extended [merchandise] lineup to please the 45-year-old female who used to shop at Fannie May and then went to Williams-Sonoma or Costco,” Waanders says.

Carle Place, NY-based 1-800-Flowers.com, which acquired Fannie May in April, is supporting the $75 million candy company’s expansion with billboards, radio commercials, and newspaper ads, plus catalogs mailed to customers near its stores in Illinois, Wisconsin, and Indiana.

And to better reach out-of-area shoppers, 1-800-Flowers.com plans to offer Fannie May candy through its BloomNet network of 5,000 florists. “It represents a tremendous geographic expansion for Fannie May,” Waanders says.
AM