Welcome to cyberspace, the American dream, the frontier of the new millennium, and an unprecedented opportunity for direct marketers to use their skills and assets to provide customers with a superior shopping experience.
Creative catalogers can dominate e-commerce – if we move quickly, decisively, and intelligently. Already, the overwhelming majority of sites with the heaviest traffic and most revenue in the apparel sector are multichannel concepts with a strong brand, such as Victoria’s Secret, Lands’ End, J. Crew, and L.L. Bean.
But we can no longer think of the Internet as just another emerging channel. Instead, it is a superior channel with a better economic model. Unlike the static print catalog medium, e-commerce provides the ability to personalize pages with in-stock merchandise that appeals to individual users.
But while the ‘Net has become an important part of our multichannel arsenal, we still have to remember that in the end, consumers want quality products, attentive service, and secure, dependable delivery systems. Successful catalogers have earned consumer trust by fulfilling customer expectations. Likewise, smart direct marketers think of their catalogs as their “brand” and have positioned them as such. Now we must figure out how to extend our brands onto the ‘Net with a cohesive marketing message.
The brand strategy declares a company’s identity, lays the foundation for revealing that identity to targeted customers, and coordinates every effort to reinforce that identity in the mind of the customer. Catalogers have the power to build brands by creating distinctive images in the minds of the target audience.
Customers should be able to easily bond with a brand, and the brand should evoke a response to its exclusive and unique offerings. Direct marketers know that each customer has a significant lifetime value – as long as marketers continually deliver quality products securely and quickly. Ultimately, the brand must deliver quality goods quickly, regardless of the channel.
Click and ship
Cyberspace is about hyperspeed. But the speed of the online search and ordering functions needs to be connected to fast and efficient fulfillment systems. As you no doubt know by now, here’s where catalogers have a huge advantage over brick-and-mortar retailers, manufacturers, and virtual start-ups. We already have one-to-one distribution in place. Direct marketers know from years of experience that this isn’t about physical warehouses but about advanced systems and processes, such as credit card authorization, returns processing, order tracking, and same-day shipping.
Internet orders ideally bypass the phone center and are electronically tied into an efficient back-end processing system. This eliminates phone and labor costs, improving the profit model. But it is not realistic to think that 100% of this cost will go away. Happily, catalogers have another advantage here: Being multichannel leverages the fulfillment infrastructure and gives customers a choice of how they want to interact.
Because catalogers have already made the capital and human-resources investments in one-to-one fulfillment, we can now focus more of our e-commerce efforts on sales and marketing. By contrast, the pure-play companies, traditional retailers, and manufacturers must expend capital in developing a customer-oriented infrastructure.
Customer acquisition
Virtual-only companies are investing astronomical sums in building market share. They have developed customer acquisition campaigns in a variety of media. (Collectively, the virtual start-ups may give a gift to direct marketers through their advertising by enlarging the universe of people willing to buy through direct channels.)
But skilled direct marketers can win the battle for cyberspace “mind share” by acquiring customers at a lower cost than virtual companies or brick-and-mortar retailers. Thus, now is the time to rededicate ourselves to customer acquisition. We must leverage our catalogs in creative ways to acquire customers and move them to the ‘Net.
To effectively expand our reach, we must go beyond co-op databases, exchanges, and other traditional techniques targeting previous mail order buyers. We must respond collectively by stepping up advertising, public relations, and other acquisition efforts.
A cultural revolution
Direct marketers tend to be methodical and to thrive on data. Pure-plays operate on a “ready, fire, aim” approach. They use other people’s money to race for first-mover advantage and to build scale. They’ve developed option-based cultures that give ownership to employees and keep compensation costs down to free up cash for customer acquisition. Direct marketers have strategic advantages in their fulfillment systems, brand equity, existing customer base, and digital assets, but they must be turbocharged into a rapid deployment mode and mentality to win the battle of cyberspace.
Direct marketers will thrive by energizing their companies with a strong commitment to cyberspace. It is not good enough just to build Websites. We catalogers must use our direct marketing skills to personalize and target our products and services. We must learn to optimize the combination of our old and new customer contact techniques, and we must boost our levels of customer information and service. If we do this, we will haverevolutionized the shopping experience.
We also need to recruit talented e-marketers. We need to rethink our compensation strategies, and we need to seek outside capital to stimulate growth. If we can accomplish all this, we can stake a claim in cyberspace and crush the pure-play neophytes by outperforming them. And it will be fun.