Alloy’s online/offline dividends

Alloy wants teens to think of its Website as their local mall. “Teenagers go to malls. They’re there to shop, but also to talk to friends, look at magazines, and generally hang around,” says Jim Johnson, cofounder/chief operations officer of the $31.2 million cataloger/online merchant of trendy apparel and accessories. “We thought if we could keep them hanging around the Alloy site, we could sell to them.”

To give teenagers – males and females – and people in their early 20s a reason to hang out at the Website, Alloy Online has invested in editorial content, including quizzes, surveys, and MP3 music samples. The New York-based marketer has also teamed with standardized-test preparation company Kaplan to offer free college-entry exam prep materials on its Website. As of January, Alloy’s efforts had yielded a database of 3.2 million visitors, including 500,000 buyers.Not all site content is expected to drive traffic immediately. For instance, Johnson allows that few surfers can view its bandwidth-hungry ‘Net serial, Chaos Theory. “Until the 28.8 modem is no longer the primary conduit to the Internet, this type of content won’t play a major role.” Nonetheless, he believes it’s vital for Alloy to be among the first to offer the newest technology. “It’s part of our brand concept.”

Bookish pursuits

On the low-tech front, Alloy is working with New York-based publishing company Penguin-Putnam to produce a dozen books under its own imprint. Johnson expects the offline brand extension to pay online dividends. “We involve readers in our community, and these books will drive traffic back to us.” The books will include content by Alloy Web visitors, celebrity contributions, and works compiled from published authors.

In fact, offline promotion plays a significant role in Alloy’s marketing strategy. “The Web is where the database developed, it’s where the distribution is most efficient, but we’re not closing our eyes to different channels,” says Johnson, who notes that roughly half of the company’s sales come from its print catalog.

Analyst Derek Brown of San Francisco investment bank WR Hambrecht + Co. projects Alloy’s annual net sales to double from 1999 to 2000, to $64.4 million, enabling Alloy to post its first profit in the fourth quarter of this year. Already the three-year-old company, which went public in March ’99, has sliced its net loss from $14.9 million in ’98 to $6.3 million last year.