Four years ago, Mercedes-Benz began to reposition its automobiles as more mainstream and affordable. At the same time, Mercedes relaunched its catalog of logoed merchandise to sell directly to consumers as well as through dealers.
As of October, the catalog’s sales had grown 30% over the previous year’s, to reach $10 million, says Glenn Rizzo, department manager of personal and automotive accessories for Montvale, NJ-based Mercedes USA. This spring, Mercedes mailed 300,000 books to customers and prospects, and a fall mailing reached another 1 million — both comparable to last year’s mailings, he says.
Mercedes USA is budgeted to sell 215,000 cars this year; all of those buyers will receive catalogs in the mail. And in addition to mailing the catalogs to consumers, Mercedes ships 50-500 of the same books to dealerships, based on their sizes.
But the book’s circulation has expanded beyond virtually all the Mercedes owners in the U.S. that it has on record, dating back 10 years. “A lot of other people aspire to own Mercedes but can’t,” Rizzo says. “So those people are on our catalog list.”
The catalog rents several lists that target the demographics of buyers of Mercedes’s most mainstream vehicle, the C-Class Coupe. With an average income approaching $100,000, it’s still an upscale crowd, but not as affluent as Mercedes owners traditionally have been.
Beyond key rings and coffee mugs
With circulation only marginally higher this year than last year, much of the credit for the catalog’s sales increase goes to improved merchandising. The book sells the usual key rings, luggage, and apparel bearing the corporate logo, but “we’ve been adding a lot more lifestyle products,” Rizzo says, such as remote-control racecars and golf bags.
What’s more, “we don’t just throw the emblem on our products,” Rizzo continues. “We design and develop all our products in-house using some sort of tie-in to our brand and vehicles. We try to take color combinations or styling cues from our vehicles.”
Having consulted initially with Tequesta, FL-based catalog agency Muldoon & Baer, “we were taught to be more analytical in establishing what products to run on which page, based on return on investment and square-inch analysis,” Rizzo says. “We developed merchandise based on a more analytical approach and identified categories by conducting some focus groups and other research.”
Since May 2000, Mercedes has also worked with New York-based catalog agency AGA. The Mercedes catalog has the potential for spin-off books, says Sal Ferraro, senior vice president of business development for AGA. One spin-off, for instance, could sell collectibles only, “because there’s a whole consumer base that’s very interested in the collectibles market,” he says. “If you look at product extensions from companies like Coach and others, I see no reason Mercedes can’t grow its nonautomotive business significantly as well.”