The Electronic Catalog: Improving Upon Generic E-mails

By now, many catalogers are on a first-name basis with their opt-in e-mail customers. When those catalogers send out e-mail newsletters or sale fliers, they address their customers by name: “Dear Joe, Check out the great deals we have this week on Christmas widgets!” But personalization can go beyond simply addressing the customer by name.

“Ask for customers’ areas of interest,” suggests Lauren Freedman, president of Chicago-based e-commerce consultancy the E-tailing Group. One customer of a gifts marketer may prefer to receive information only about jewelry, while another may wish to receive e-mails about novelty products such as singing fish. A survey that the E-tailing Group conducted during the second quarter of the year indicated that 22% of online marketers allow customers to choose e-mail by product category or interest.

Wine accessories cataloger The Wine Enthusiast falls within that 22%. Vice president of marketing Chris Topping says that customers can elect to receive the e-mails on such specialized topics as wine cellars, cooling systems, and glassware. The Hawthorne, NY-based company sends e-mails about 15 times a year.

The Wine Enthusiast is looking to add customer data to its file through an online sweepstakes program in 2002. “People are more willing to answer questions if there is an added value to answering them,” says online coordinator Bill Jackson. To enter the sweepstakes, customers would answer questions about products they’re interested in, as well as whether they are a beginner, intermediate, or advanced enthusiast. The cataloger would then use the data to tailor its e-mail offerings. Beginners may receive offers on lower-ticket items such as corkscrews, whereas advanced enthusiasts might receive information about custom racking.

Sumner, WA-based Recreational Equipment Inc. (REI), which sells outdoor gear and apparel, allows visitors to select either its Gearmail or Hot Values newsletter. Gearmail features product information; Hot Values promotes sales and discounts. From there, the customers can choose from 14 areas of interest, including camping/hiking, climbing, fishing, and snow sports.

Customers can personalize their e-mail still further. Although Gearmail is sent out every other week, those who sign up for REI’s Hot Values e-mails can choose to receive them either once or twice a month. (According to the E-tailing Group survey, just 9% of marketers give customers a choice regarding how often they’d like to receive e-mail.)

Beyond those options, says spokesperson Jennifer Lind, REI does not offer deeper personalization techniques — for now. “We’re in the process of combining our customer information into a single database, and we’re working to lay the foundation for launching something like a recommendation engine in 2002.”

Making a recommendation

Recommendation engines, in fact, can be an effective personalization tool. But the costs and manhours involved deter many marketers from implementing them.

To set up a recommendation engine, catalogers can work with a vendor that specializes in collaborative filtering, or they can purchase collaborative filtering software themselves. While going with a vendor can cost as much as $500,000 (see “You’re Gonna Love This,” Catalog Age’s i.merchant supplement, April 2001), maintaining the software yourself presents its own challenges.

For one, the software usually needs customer purchase data before it can make recommendations, which means that catalogers would have to create a database of all the client purchase histories as well as create the rules so that the software would “know” which products should generate which recommendations. For another, the software doesn’t recognize when a customer is buying a gift, so a gift-giver is likely to receive inappropriate recommendations.

E-mail personalization can bring catalogers one step closer to the elusive ideal of one-to-one marketing. But before personalizing your e-mail further, Freedman cautions, ask yourself, How much more product will I sell than if I just send customers an e-mail showing hot items? “Companies must measure their efforts against the return” she says, “especially if their resources are strapped right now.”