Orlando, FL—In the Oct. 14 keynote presentation during the Direct Marketing Association’s annual conference here, Gordon Cooke, president/CEO of women’s apparel cataloger/retailer J. Jill Group, and Nancy Tait, president/CEO of Harry and David and Jackson & Perkins parent firm Bear Creek Corp., pointed to the need for an increase in creative new products and new ways to keep up with customers from one channel to the next as among the top issues and concerns facing catalogers.
Cooke and Tait were among a panel group, which also included DoubleClick CEO Kevin Ryan; American Institute of Cancer Research executive vice president/chief operating officer Kelly Browning; and Harte-Hanks Direct Marketing president/CEO Richard Hochhauser. Below are comments Cooke and Tait made during that session about the current and future state of their businesses and the catalog industry as a whole:
COOKE: Our biggest challenge is operating in a multichannel world. In the past, we sent out catalogs and had more predictability. Today, we never know where our customer’s going to shop with us. The company’s infrastructure and how it’s able to take on multichannel is much more daunting than I thought it would be for us … For us, it’s very difficult to know what the real return on investment is as we put money into each channel [catalog, retail, Internet].
TAIT: This lack of predictability that we enjoyed for so many years is led by the Internet playing such a big role, making curves so difficult to predict. We’re also seeing more complexity in how to motivate customers to shop. We surveyed our customers recently and said, You shopped from us last year, why not this year? They’re looking for more new [products], more excitement, more surprises, and we owe it to them and need to motivate them to buy. There’s more competition out there, and we need to combine better merchandising with marketing to motivate today.
This year, we’ve seen mixed results by channel, and our Internet channel is growing by double-digit rates. We’re still seeing strong growth. Harry and David is ahead of plan, but our Jackson & Perkins business is slightly behind plan, pretty flat with last year. We do feel we made some major changes in our creative and new product introduction, and are seeing growth in the new-product category. So if we added 30% more new products, then we’re seeing 50% greater sales coming from new products.
COOKE: Customers are being much more selective. If there isn’t the newness, the customer won’t shop with you. Companies like Coach and Burberry have reinvented themselves. You can no longer slightly tweak products for the new season.
TAIT: Our customer base is aging even though we’re attracting younger customers to the Internet. But it’s the aging of the baby boomer who’s still a major consumer, and their buying patterns are changing. We’re trying to adjust for that, looking at our product line to handle those people. All of us have to have competitively superior products or services—you need that value added.
All of us are getting too much input at our home and at work, and we’re looking for ways to make things easier. We’re seeing people buying more of our ready-to-make food. So when we’re marketing or looking at our product line, we’re looking to include more of that.
COOKE: When you come into our stores now, if we’ve dropped a catalog, we’ll have an Intranet site at the front desk and do business through it. This has grown dramatically. Last week 28% of our in-store sales in one day were from the in-store Intranet site. Customers come into our stores with the catalog.
The challenge is creating a database to track the multichannel customer. We need to find customers as they migrate from what we know about them now that they’re moving into retail and Internet. We don’t have the data or systems to do that–especially to track retail customers. The big challenge is that we not lose customers when they move from one channel to another. It’s not that we’re losing them as customers, but we’re losing track of them as they switch channels.
TAIT: Over the past few years, we’ve seen a trend from catalog shoppers still buying over the phone or through the mail who are waiting to buy closer to need. The Internet allows other opportunities to buy even closer. But that’s an overall trend to not part from your money until you have to. I see that as an opportunity, a big challenge, and we have to service them and have the inventory. If you’re there when the customer wants you at the last moment, that’s the opportunity.