An Online Retailer's Journey Into Catalogs

"We learned very quickly that we had no idea what we were doing." That's how Meredith Mahoney, senior director and general manager of Birch Lane, a home décor brand that's part of formerly online-only Wayfair Inc., bluntly assessed the company's start in the catalog industry. Tasked with starting a brand from scratch in seven months, Mahoney and her team at Birch Lane learned on the fly — and self-admittedly made some mistakes in the process. However, what's emerged is a growing brand that's positioned itself for future success.

At the NEMOA directXchange Spring Conference in Boston last Friday, Mahoney gave a keynote speech where she laid out the challenges Birch Lane faced in launching a print catalog with a staff whose only experience was in e-commerce, as well as the takeaways from the experience and what the brand has planned going forward to continue the momentum from its successful launch.

Why a Catalog?
E-commerce has been good to Wayfair, providing years of sustainable growth and increasing profits. So why bring print into the equation? It was the natural next step in our marketing strategy, said Mahoney, adding that it was a new way for Birch Lane to reach customers. In addition, a catalog offers Birch Lane an end-to-end brand strategy as well as a new channel for the brand to extend its digital marketing expertise.

However, Birch Lane wasn't without its challenges as it launched the new business last year. In addition to not knowing anything about the catalog business, a very aggressive timeline was put in place for Birch Lane's debut — concept to launch in seven months (September 2013 and March 2014, respectively). Add in the fact that Mahoney was leading a skeleton crew — less than 10 people, and that included buyers, creative, production and marketing — and the odds appeared stacked against Birch Lane.

First Steps
Mahoney and her team essentially had the first three months of 2014 to accomplish the following:

• finalize product assortment (one advantage is that Birch Lane doesn't carry inventory; all of its orders are drop shipped);
• shoot the catalog and all web assets (this was done in six weeks in North Carolina);
• write all copy for the catalog and web;
• build a website;
• build a catalog circulation plan;
• hire a printer;
• put together a PR push for the new brand and host a launch event; and
• print and mail the book.

Birch Lane's first catalog was in-home on April 7, 2014.

We were humbled by the big successes — revenue and average order value exceeded expectations, housefile was growing — but we still had plenty to learn, noted Mahoney. For example, we had no idea how much paper cost, she admitted, eliciting some laughter from the catalog veterans in attendance.

First-Year Learnings, Challenges
Now that Mahoney has had some time to reflect on Birch Lane's entrance into the catalog business, she's come away with some takeaways:

• You can only push a team so far. Birch Lane has suffered some staff defections as a result of the intense schedule required as the brand worked to its launch. We realized that we needed to balance in-house talent with third-party industry expertise, Mahoney said.
• We had no idea that production was going to be such a beast, Mahoney said. To that end, Birch Lane has hired a production manager that has relationships in the catalog industry.
• A lack of data to help guide strategic decision making.
• Little ability to pivot quickly, especially with pricing. You can't change things in print like you can online, Mahoney jokingly told the audience.
• No brick-and-mortar stores. Birch Lane doesn't have the organizational structure to support retail stores right now, not to mention the fact that they're very expensive, Mahoney said.
• Prioritization. We had a ton of ideas, but didn't know the things that we should be focusing on so that we could meet our top-line revenue goals, Mahoney said.

What's On Tap for 2015
Mahoney outlined what Birch Lane has planned for 2015:

• Testing, testing, testing. We now have enough volume where testing can provide meaningful results, said Mahoney.
• Playing around with the product mix. For example, Birch Lane will be introducing outdoor furniture for the first time this year.
• Using data to drive decisions. We now have the volume, Mahoney reiterated.
• Putting a stake in the ground as to what Birch Lane is as a brand.
• Identifying what omnichannel means to Birch Lane. Right now we don't know about our customer until she visits our site, Mahoney noted. The retailer is trying to change that in 2015.
• Optimize Birch Lane's online marketing strategy.
• Prioritizing and doing things that move the needle (i.e., drive top-line revenue).
• Starting to lean more on internal resources within the Wayfair organization.

Top 10 Lessons
Mahoney wrapped up her presentation with the top 10 lessons she's learned from her first year in the catalog business:

1. Be flexible with your strategy. This is essential when starting a business, Mahoney said.

2. Don't get paralyzed by not having data. Let data guide you, but go with your instincts.

3. Learn from the best, but innovate quickly.

4. Staff appropriately for year two needs.

5. Put the right people in the right positions to succeed.

6. Know what you don't know, and don't be afraid to ask for help.

7. Educate your internal networks early on about what your business is doing and what help it could use from them. Mahoney said she wished she would have a done better job with this at Wayfair.

8. Focus on things that move the needle.

9. Don't be afraid to take risks.

10. Everything comes back to the customer — prioritize her experience and everything else will follow. For example, Birch Lane recently rolled out free shipping for all orders over $49 as a direct result of feedback it got from its customers. We gave up some up margin to make our customers happy, Mahoney said, adding that the move has resulted in an increase in conversions.