Red Envelope’s redo

Hoping to reverse its lackluster financial performance, Red Envelope last fall quietly revamped its brand. The gifts cataloger relaunched its Website in late August 2007, and in early September mailed a 64-page redesigned fall catalog.

What’s new and different about the catalog?

Its size, for one. While the redone book is roughly the same square inches as the old, it measures 7″ × 10-½” vs. the previous trim size of 7-⅞” × 9-½”, says Laurie Kanes, Red Envelope’s vice president of creative.

The former catalog size “didn’t allow for as many co-mailing opportunities and was a less efficient use of paper on press,” she notes. The new size is also a way to “stand out as a more unique size in the customer’s mail.”

What’s more, the book boasts larger photos and more lifestyle shots, Kanes says. “With our catalog redesign, we are helping to showcase and elevate our products by photographing them more heroically. We’ve also redesigned our Website incorporating this new creative.”

Red Envelope also uses the design to create “a series of lifestyle moments about reasons for giving that introduce each of our product categories, from home, to men’s and women’s accessories, to baby gifts,” Kanes says. “We also hope they’ll think about our brand in a new way as a bit more contemporary and fun.”

Kanes, who joined San Francisco-based Red Envelope in February 2007 after stints at Williams-Sonoma, Gap, and Esprit, was charged with changing the look and message of the company’s catalog.

What specifically is Red Envelope trying to say with the new look?

“We wanted to shift our brand position from being about product to being about giving,” Kanes says. “So many retailers offer many of the same product categories we do, that we felt we needed to differentiate ourselves by talking to our customers about why they are giving and how our brand can help.”

Kanes hopes that the new catalog will enhance the company’s brand image. “While there are many factors at play for a direct-to-consumer company, an editorial voice like the one we have launched at Red Envelope this fall does affect how the brand is perceived,” she says. “We mail a lot of catalogs and want to be helpful and interesting to our customers, or we get tossed into the dreaded recycle bin without a glance.”

Red Envelope does not release its circulation. For fiscal 2007, the company’s revenue rose 7.1%, to $121.3 million, up from $113.2 million. Net loss for the fiscal year was $3.5 million, compared with a net loss of $5.6 million in the 2006 fiscal year.

For the second quarter ended Sept. 30, Red Envelope reported a net loss of $10.3 million, compared to a net loss of $3.7 million for the same period the prior year. Second-quarter sales increased 2.6%, to $15.9 million, up from $15.5 million in the quarter of 2006.

Catalogs still key

Despite its financial struggles, Red Envelope is committed to its catalog, Kanes says. “When many of us in retail experienced the launch of Internet shopping, we thought the catalog would go by the wayside,” she says. “Obviously, that didn’t happen.”

The balance between catalog pages vs. Internet sales is “a tricky one that everyone in the business struggles with,” Kanes notes. “As comfortable as customers are these days shopping online, people still seem to respond to a catalog.”

She adds that a catalog serves as “a tangible reminder that your brand is still relevant.”

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