Multichannel Challenges: Caswell-Massey

Who says you can’t teach an old dog new tricks? Certainly not $20 million Edison, NJ-based high-end toiletries marketer Caswell-Massey.

The company’s rich history predates Franklin Roosevelt, Abraham Lincoln, and the Declaration of Independence. Founded in 1752, Caswell-Massey counts founding father George Washington and 19th-century actress Sarah Bernhardt as frequent customers (although it’s a safe bet these names don’t appear on any hotline buyer list). Yet it has learned to use its multiple channels, including the Web, to thrive well into its third century.

Caswell-Massey’s vital signs are healthy today. It mails 2 million copies of a 48-page, slim-jim catalog a year; operates 16 stores (the two newest, in Schaumberg, IL, and West Palm Beach, FL, opened this past fall); runs a wholesale division; and maintains a burgeoning Website business with online sales that tripled this past holiday season. But this multichannel synergy wasn’t always the case, says chairman/CEO Anne Robinson. In fact, just five years ago, the company’s catalog, retail, and wholesale divisions were in shambles.

Despite its longevity–or maybe because of it –Caswell-Massey’s performance suffered from stodgy merchandise offerings. The company’s Edison warehouse looked more like a M*A*S*H unit than a distribution center, “with boxes full of returned merchandise strewn on pallets running three wide and three deep,” Robinson recalls.

Then, too, it faced stiff competition from relative upstarts such as Crabtree & Evelyn and Bath & Body Works. But another contributing factor was the internal struggle among channels.

“The company got into trouble when our catalog, retail, and wholesale channels were being run as individual businesses,” Robinson says. “The channels were going in different directions and operating as separate business units. Retail wasn’t listening to catalog and vice versa. The items featured on the catalog’s cover were not necessarily in the store window. There was little synergy between brands.”

Quietly losing money, the privately held company almost went bankrupt in 1989, Robinson says. That year, Milton and Ralph Taylor, who had owned Caswell-Massey for 50 years, sold the business to Sally Aw Sian, head of Hong Kong publisher Sing Tao Holdings. In 1992 Sian sold a 40% stake to corporation W.R. Grace.

The revolving ownership didn’t improve matters for Caswell-Massey. In 1995, Robinson came aboard to run its wholesale division. When describing the state of the business back then, like George Washington, Robinson cannot tell a lie: “I was aghast.”

Shaping up the business

In 1996, W.R. Grace sold its share to Caswell-Massey’s then-CEO, Edward Hung. That same year, Robinson was promoted to executive director. To cut costs immediately she closed stores and fired a quarter of her staff. Later, in 1999, she received $4.2 million from American Capital Strategies to buy out the company from the owners for an undisclosed sum.

After assuming control of the company, Robinson got down to work. Instead of totally reinventing Caswell-Massey, she decided that the company should embrace its roots. The future of Caswell-Massey, she determined, depended on how well it could market its past.

And so the company brought back old product favorites such as a hand lotion called the Elixir of Love and Dr. Hunter’s No. 6 Cologne. (George Washington had given a supply of the cologne to the Marquis de Lafayette to thank him for his aid during the Revolutionary War.) But while the company added such products as a box of presidential soap favorites, including selections from Eisenhower and Kennedy, Caswell-Massey also eliminated a number of less-popular, lower-margin items.

The next step was to play up the Caswell-Massey heritage in the company’s marketing materials. Robinson figured that focusing on the catalog first, as opposed to the stores, would be the fastest and easiest way to start because “you can change the look and feel of the catalog in one mailing.” The company did a redesign of the catalog in fall 1997, Robinson recalls. “The goal was to give the catalog an old fashioned feel.” To that end, old-style woodcut borders lined each page. And Caswell-Massey reproduced advertisements and product labels from the 1800s.

Sales soared. “Our response rate jumped 35%, and the average order increased 22%, from $53 to about $68,” Robinson says. Altogether, these creative changes helped push the catalog into the black for the first time in eight years.

“The impact of the mailing was fast, and it helped keep up the hard work of change,” Robinson says. “There were some decisions at the time that seemed radical, such as taking some basic products out of the catalog due to low sales. But many customers picked up the phone and ordered the products anyway. Now we encourage our customers to buy these items in our stores, or we offer them in a sales catalog once a year,” she says. The changes in the catalog, then, helped Caswell-Massey assess how to tailor its merchandising and marketing for each channel without diluting the overall brand message.

After revamping the catalog, Robinson began to redistribute employees among channels in 1999. “Employees working in the retail stores, for example, saw the customer’s reaction first hand. And they saw what worked and what didn’t.” Plus, she figured, shuttling employees among channels eliminated an “us against them” mindset.

To further coordinate synergies among its marketing channels, and with a little nudge from the impending Y2K bug, Caswell-Massey upgraded its computer software and hardware in 1999 to a common platform called Cognos, which Robinson says will help better analyze inventory and sales forecasting by channel. The company’s Website and catalog back ends are not yet integrated, and it is in the process of merging sales and inventory into a common database.

Once the data have been merged, though, Robinson expects that the company will be able to forecast inventory demand more accurately and maximize sales opportunities among channels. “If someone goes into our store and then orders from the Website, I can’t yet tell you it’s the same customer,” she says. “But I do know that my Web sales spike when the catalog drops.”

New channels, new products

In the meantime, Caswell-Massey does make the most of the unique strengths of certain channels to test merchandise. “Before we had a Website, we could test only in our stores,” notes Robinson, adding that the company wouldn’t want to devote precious catalog real estate to unproven products. Now the company tests new products on its Website first. “We get information faster [than from the stores] and can judge the potential of new product more accurately.”

Among the products that have been tested and are now being rolled out are New York Bathtub Gin, a bubble bath masquerading in a gin bottle, and a gift box with four of its best selling soaps. Next month it will launch Casma (short for Caswell-Massey), “a floral bouquet with a hint of vanilla,” Robinson says, that represents a “return to glamour.” The rollout will come complete with a catalog cover reminiscent of a 1920s copy of The New Yorker.

Once the company rolls out a product, “the entire promotion is unified,” Robinson says. The taglines, prices, and marketing collateral are the same regardless of the channel. Catalog mailings generally act as the driver, pushing customers into the stores (addresses are listed within every edition) and onto the Web.

Robinson likes to point out that not a single company letterhead, fax, mailing piece, or package goes out to the customer without bearing Caswell-Massey’s URL. “We put the Web address on everything–every product package, catalog page, and shopping bag. We are working on even more ways to connect the customer directly to the company.”

Indeed, “staying close to our customers, listening to their requests, and hearing what they want,” says Robinson, helps to spur merchandise launches. For instance, catalog customers frequently ask order-takers what certain products smell like –subjective questions that are difficult for even the most experienced service reps to answer.

So Caswell-Massey developed a package of samples of its most-requested soaps, lotions, and shampoos. The sampler box, which sells for $10, now accounts for one-third of the company’s online sales and more than 20% of its catalog sales. Even more important than the immediate revenue boost from the sampler box sales, however, is that “once customers try the products, we know most of them will come back to buy one or two of the items from the trial box,” Robinson says.

Given the importance that she places on customer feedback, it’s no surprise that Robinson spends about five days during the peak holiday season personally fielding customer inquiries and suggestions. She’s also thinking about putting a suggestion box on the Caswell-Massey Website this year.

Some multichannel marketers feel that you need to tailor your merchandise offers for each medium. Robinson disagrees. “When you find something that works well in one channel, push it hard in all channels,” she advises. “A best-seller is a best-seller everywhere. The same holds true for customer service, promotions, and loyalty programs.”

Marketing on a Budget

Caswell-Massey chairman/CEO Anne Robinson says she learned a thing or two about marketing on a shoestring since being charged with turning around the Caswell-Massey brand. Cash-strapped catalogers can strengthen their brand plenty, she says, by implementing a few simple changes: giving out product samples, exchanging well-worn products with no questions asked, and personally responding to customer inquiries. Below, Robinson gives examples of how much (or how little) certain changes would cost you.

For less than $1,000, you can:
Add your Website address to everything a customer comes in contact with–sales receipts, catalogs, and shipping boxes. Respond to all customer inquiries with a personalized letter and a free sample.

For $1,000-$5,000, you can:
Create special events, such as in-store activities and tie-ins with cultural happenings. Send press releases to announce new products. Give out free samples to customers and prospects.

For $7,500-$25,000, you can:
Give out more free samples. Hire a public relations firm to spread the word about your brand. Do a postcard mailing campaign to regular customers alerting them of specials and promotions.

For $15,000-$75,000, you can:
Give out even more free samples. Plan a media tour to attract local television coverage in key markets. Hire a spokesperson who can represent your company on TV segments and talk shows.

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