Targets Near and Far Dec 1, 2006 12:00 PM
, By Ann Meyer
JobZone
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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.
