At the New England Mail Order Association’s spring conference this week, there was much talk about the tough times that the catalog industry is currently facing thanks to the one-two punch of rising costs and a poor economy.
On hand to share with catalogers its experiences in dealing with the current tight economy was Peter Grebus, who leads Williams-Sonoma’s Customer Information Management Group.
“As the macro environment continues to worsen, catalogers need to get smarter just to stay afloat,” Grebus said.
As evidence of just how bad things are, a handful of former BlueSky Brands Inc. employees, who lost their jobs in what was reported as the latest in a series of layoffs were on hand networking in hopes of finding new positions. BlueSky, which owns the catalogs Bits and Pieces and Paragon Gifts, is the latest in a series of multichannel merchants to go through cutbacks. It is reportedly investigating strategic alternatives, including a possible sale.
With more than 200 million customers in its database and 17 million e-mail addresses, Williams-Sonoma’s direct-to-consumer business accounts for 42% of its total revenues. However, while the company currently spends 90% of its advertising budget on catalogs, the allocation is starting to shift, according to Grebus.
As part of a strategy to adopt its marketing science approach, William-Sonoma is looking at how to optimize its marketing spend, with search as one area it is investigating. “As performance declines, the right mix is critical,” Grebus said.
Currently, the company is investing heavily in gaining insight into how its different media interact so as to better understand how its catalogs influence e-commerce and retail sales.
“This will enable William-Sonoma to understand how deep into the company’s file it can mail to support stores and what the return will be,” Grebus said.
Already, the company has been mailing deeper into its file with smaller versions of the catalog in geographic regions such as Texas, where it thinks a significant portion of recipients are driven to retail stores via a catalog. The company “has seen great success” with this strategy, Grebus said.
William-Sonoma is also investing in ways to reduce the catalog production cycle. According to Grebus, every day the company can eliminate from the cycle saves it $600,000.
Other initiatives include the integration of browse and purchase data to enable contextual selling across channels; using non-traditional data to augment traditional data in order to refine precision; and researching why active customers are choosing to opt out of receiving catalogs via Catalog Choice and other such services.
