Frederick’s of Hollywood: Up Close and Personal

Frederick’s of Hollywood, the legendary lingerie and apparel cataloger/retailer, used to have siloed data that prevented a 360-degree view of its customers.

But taking a more disciplined personal approach to segmenting its customers during the past decade has greatly enhanced the business, according to Tracy Rhyan McCourt, vice president of multichannel marketing.

“We weren’t speaking to our customers in a brand centric way,” McCourt told attendees at last week’s NEMOA Fall Conference in Quincy, MA. “We took a personalized approach to marketing and we sliced and diced and sliced and diced and listened.”

McCourt said the RFM (recency, frequency, and monetary) analysis doesn’t dictate better contact strategy. “We segmented by preferred transaction and suppressed search and affiliate buyers from our catalog buyers.”

During her session, “The Transformational Power of a Customer Centric Approach,” McCourt explained Frederick’s “persona” marketing. “This type of marketing is a complete understanding of a customer’s needs.”

The retailer learned that Frederick’s of Hollywood is a state of mind, and the customer “can’t be defined by demographics,” she said.

McCourt labeled some of the personas: Bra Enthusiast (sensible one), The Vixen (least loyal, needs sophistication), Fashionista (career woman who is a club goer who likes to show off her body), and Sexy Spender (buys everything—Fredericks’ most loyal customer).

Purchasing behavior leads to a 360-degree view of the customer, McCourt says. Based on a customer’s needs—basic, ultra sexy, or a trend buyer—Frederick’s mails 36-page persona books while Valentine’s Day and other core holiday books run 76 to 92 pages.

“Response rates are the same or better with persona books,” McCourt said. “We do more personalized emails, and we’ve increased personalized search pages.”

McCourt says Frederick’s used to have a woeful 12% customer capture rate, which has since risen to 70%. “We brought in store managers and made it clear how important capturing names are. And we measure them on capture rates—60% or they are penalized.”

Fredericks is phasing out full-sized catalogs, as its books have become direct marketing vehicles for driving web and store traffic, McCourt says. Frederick’s used to mail 20 million catalogs annually, but it plans to mail about 13 million this year, due to more targeted marketing.

Since McCourt says Frederick’s phone business is “dwindling,” personalized emails, multichannel emails, and store promotions are crucial. She cited an example of a store promotion for a free pair of underpants if a person supplied customer information online and then printed out a coupon for the offer at a local store.

Founded in 1946 by Frederick Mellinger, Frederick’s of Hollywood actually started out in New York as a mail order marketer of black undergarments; a year later the operation moved to Hollywood. The company, whose achievements include introducing American women to push-up bras, bikinis, and thong underwear, opened its first store in 1952 and went public in 1972.

After a Chapter 11 bankruptcy filing in 2000, all of Frederick’s of Hollywood’s customer data was consolidated into one multichannel database. The company’s renewed emphasis on personalization then took off.

The merchant has also embraced social media: Frederick’s boasts 250,000 Facebook fans, McCourt said. “We emailed customers and offered a promotion if they signed up for our Facebook page. We really listen to our customer, and always offer a customer centric message, which is most important. It’s a discipline.”