Catalog Profile: Austad’s
When Mammoth Sports Group purchased the Austad’s golf catalog from Hanover Direct this past October, it became “a new company under new ownership with a new mission,” says Kent Arett, president of Mammoth Sports Group located in Jessup, MD.
“We knew there was a lot of potential there that was not being tapped. This was an underperforming business. That was the whole reason we bought it [Austad’s],” Arett explains.
Under terms of the agreement, Mammoth Sports Group, which also owns several Mammoth Golf superstores and an e-commerce site, purchased Austad’s complete inventory, customer base and historical artwork with plans to quickly ramp up the catalog’s mailing frequency to 12 times a year and to make substantial investments toward improving the overall effectiveness of the catalog business—from the creative look of the book ... to the merchandise it sells in its pages ... to the marketing and media plan ... to the service it provides to its customers on the back end. Also on the drawing board for the not-too-distant future: Plans to formulate an integrated Web presence with Mammothgolf.com, which as of October 1999 was getting 12 million hits a month.
An Entrepreneurial Edge
How Kent Arett came to Mammoth is an interesting story in itself. Mammoth’s Founder and CEO Bill Albright had started as a beverage distributor. He founded Maryland Beverage in 1986, and grew a very successful business selling juices and sodas; he sold that business at a hefty profit by 1991. Soon after that, Albright bought a regional marketer of golf clubs in Pennsylvania, then started to sell them through a catalog and later on the Web. This became the foundation for Mammoth Golf.
Independent of Albright, Arett had worked in the direct marketing field since 1973, including a long career at Sears catalog, which lasted until 1993. “In 1998, I was looking for an underperforming catalog to buy,” he recalls. In the summer of 1999, Arett identified a possible candidate in the Austad’s catalog, which was owned by Hanover Direct. “I negotiated for the rights to buy Austad’s. About the same time, Bill bought my company, then [called] Euclid Logistics, and I came to Maryland as president of Mammoth.” Then, with the help of J. Schmid & Associates, a catalog consulting firm in Shawnee Mission, KS, headed by Jack Schmid, Arett began examining the numbers.
“We helped Kent crunch the numbers after he had identified Hanover Direct’s Austad’s as a potential acquisition,” says Schmid.
J. Schmid & Associates has creatively produced the catalog and has been responsible for the circulation planning for each catalog since the acquisition. Also, until Dan Fredeen came aboard as vice president of marketing in November, Schmid acted as the catalog’s marketing arm.
Austad’s Recent Creative Evolution
The acquisition complete, Austad’s mailed its first catalog as part of Mammoth on Nov. 26, 1999, and the Austad’s team got busy planning for a host of improvements to take effect in early 2000.
One of the first major changes made to the Austad’s catalog was to make it bigger—both in trim size and in pages, says Arett. According to Schmid, the original trim size under Hanover was 71⁄8˝x101⁄4˝. In the past year the size of the catalog has been upped to 83⁄8˝x103⁄4˝. “The larger size allows space for increases in apparel and accessories products plus more brands and price points,” explains Arett.
Other changes have been made with each new issue. Says Schmid, “We have attempted to make some gradual, evolutionary changes with each issue of the catalog.”
Upon examination, it is evident that the new, improved Austad’s catalog is banking on increased catalog readership and longer shelf life to translate to higher sales. There’s editorial-type copy throughout, including tips from golf pro Greg Norman, who is given the title of “contributing editor.” The tips (from Norman’s home page, Shark.com) are interspersed throughout the book and include such topics as “Take Strokes off Your Game,” “Freeze that Putting Grip” and “Take a Stab at Tough Bunker Shots.”
Schmid explains, “The signing of Greg Norman was done to enhance the credibility of the product offering. Norman is a highly recognized professional golfer with a solid image. By adding golf tips throughout the book we should have better readership and retention.”
Of the Greg Norman strategy, Arett adds, “Now ours [catalog creative] is differentiated with the tips from Greg Norman. This will encourage shoppers to look over the book and hopefully impulse will take over and get them to buy.”
What follows is a step-by-step look at the recent creative evolution of the catalog since the acquisition from Hanover late last year:
January. The trim size was increased to the larger 83⁄8˝x103⁄4˝ format. Page count jumped from 44 pages in November to 60 pages. Greg Norman was signed as the spokesperson for Mammoth Sports and the Austad’s catalog. Throughout the catalog, golfing tip sidebars were added to promote readability and retainability of the catalog. Another big change was the addition of major golf brands to the catalog such as Ping, Calloway and Titleist, which had never been in the catalog under Hanover.
February. The catalog was basically a re-mailing of the January book with a new cover. The February 2000 issue proclaimed itself “The New Austad’s Catalog” and featured a decal on the front cover to highlight a “Special New Customer Offer: Free Shipping with $100 Order.”
March. The book grew to 72 pages and added a major sweepstakes offering (via an insert in the center of book). The “play a round of golf sweepstakes” on the centerfold was another incentive designed to build response. Every order qualifies as another entry into the sweepstakes, the grand prize for which is a trip to West Palm Beach that includes a round of golf with Greg Norman; the contest runs through December. Greg Norman continued as contributing editor with new tips.
April. The page count was increased to 80 with a major addition of 25 pages of apparel for both men and women. Retailer Golf America worked with Austad’s and J. Schmid on the merchandising. The catalog’s other innovation was having two covers—one starting with clubs and playing gear; the other featuring the brand name apparel and specialty gifts developed by Golf America.
Regarding the creative changes thus far, Arett opines, “Each book has gotten progressively better. But we’re not through; there’s more work to be done.”
“We Just Needed to Mail a Lot More Catalogs”
Beyond a fresh look, Austad’s needed help in key areas identified by Arett. He says, “The reasons why Austad’s underperfomed historically were three-fold. First and foremost, they were not mailing enough. They were averaging, I’d guess, 250,000 pieces [per mailing].” Since relaunching the book, Mammoth has been increasing Austad’s numbers with each mailing, moving up to 345,000 this past November, to 800,000 in March and to 4 million catalogs each in April, May and June—prime golf selling season.
Where are all these new prospects coming from? A recent Wall Street Journal article identified that “... about 26 million American golfers played around 530 rounds of golf last year...” Of course, not all of these golfers are catalog shoppers. That’s where some expert list brokerage advice became essential.
“We’re going big-time into list rental to prospect,” Arett says. “I work closely with my broker, Donald M. Hoika at Alan Drey Co., who is an avid golfer himself.” According to Arett, Austad’s is making extensive use of the Experian and Abacus files to take the potential universe of names down to targeted groups of 2.5 to 3 million prospect names to mail.
Alternate media is part of the Austad’s prospecting mix, as well. But these days, the ads are largely used to drive Web traffic rather than catalog requests or off-the-page sales, Arett notes. Media choices include the obvious golf titles like Golf Digest and Maximum Golf magazines, as well as some radio and TV to drive traffic to the Web.
Merchandising Strategy: Adding More Apparel into the Mix
The second reason the book was a habitual underperformer, according to Arett, had to do with problems in the merchandising department: high returns and obsolescence of products. “Our goals were to get more key branded products and add more apparel to the mix,” he says.
Austad’s new focus is on name-brand equipment rather than on its own line of clubs. “We also have significantly more golf apparel than our competition,” Arett says, noting the catalog’s chief competitors are Golfsmith and Edwin Watts. Arett explains the move to add more apparel into the mix: “If you look at the incidence of purchase, people buy clubs, the big stuff, only every four to five years. But they buy apparel and accessories, balls, golf gloves, every year.
“This keeps the list fresh,” Arett adds, noting, however, “You don’t necessarily make money on those smaller purchases.”
Schmid adds that the broader mix of merchandise keeps the catalog fresh and the monthly mailing keeps the Austad’s name in front of golfers.
According to Schmid, the catalog is organized by manufacturer—both clubs and apparel. “The goal is to have a good mix and price point offering of full sets of clubs, specialty clubs like putters, wedges, etc., golf accessories like bags, training aids, etc., consumable items like gloves, balls, tees and a full line of shoes, apparel and gifts for men and women.”
Within each product category—whether it’s woods, irons or golf balls—Austad’s carries two, three or more brands at different price points. Arett explains this “good-better-best” merchandise strategy is something he learned from his days at Sears. In the past, prior to the acquisition, Austad’s had a lot of “good” products and a lot of “better.” Now, says Arett, Austad’s wants to offer customers more better products along with some good and some best.
As far as determining what goes where in the catalog, Schmid says that best-selling lines of merchandise by manufacturer is one of the main criteria. He adds, “Some co-op money is available for hot spot positioning.” But looking at best-selling products and where the best margins are is also a major factor in pagination decisions.
Service Expectations
A third and final reason Arett cites for Austad’s underperformance in years gone by has to do with customer service and fulfillment. “Service expectations on the part of consumers have increased. We [Austad’s] hadn’t kept up.”
Since becoming part of the Mammoth Sports company, “we’re endeavoring to ship 100 percent of orders next-day and to make 60 percent same-day shipments,” Arett says.
The company is currently building a new distribution center in Louisville, KY, to help accomplish these goals and to keep up with future business growth, both from the Web and the catalog. All catalog and Web orders will be handled at the new center, set to open in the first or second quarter of ‘01.
Web Strategy: To Be Determined
Jump on to the Austad’s Web site and you’re greeted by offers and features galore. “Click here to WIN GOLF with GREG NORMAN” shouts the button at the top of the home page. On the navigational bar to the left is a bold notice about “Free Shipping Delivered Right to Your Door.” The site freely cross-promotes the print catalog, offering a convenient “Catalog Quick Order” button as well as a place to click to request a catalog.
The print catalog is doing its job to promote the e-business, too, spelling out its Web address www.austads.com on every spread in the book as a way to order; the Web address is also prominently displayed on the cover.
The Mammoth Golf name is also prevalent throughout the Austad’s site, as the two are really one company. Mammoth has live, online help to assist customers one-to-one through the buying process. It also offers a VIP Savers Club, which provides members with additional discounts off the already-low prices.
According to Arett, the company has no plans to change its Web branding right now or abandon one name for the other. “Both brands have value, Austad’s and Mammoth. We need to wait and see how it [our investment in marketing] pays out. We don’t want to make any rash decisions.”
However, Arett admits that the eventual relationship between the Mammoth and Austad’s names and the catalog and the Web is uncertain. He says, “We’re trying to determine the effectiveness of catalog vs. advertising vs. portal agreements”—with the likes of AOL, Yahoo!, Golf Digest and USA Today.
“Right now, the catalog looks like it will drive purchases on its own.” n
Austad’s Catalog
Buyer Profile
Total file 1,262,508
12-month buyers 52,214
Average age 51 years
Income $61,500
Sex 70% male
Avg. unit of sale $80
Source: Fasano & Associates data card, April 2000; call (323) 874-4400
