One-Stop E-commerce: GiftCatalog.com

Type the word “Gift” into any Internet search engine, and you’ll be faced with more sites than you know what to do with.

From Gift.com to SendAGift.com, online gift retailing has become a hot-button business. With such a crowded field, why would the executives of retail giant Target Corp. decide that three of its strongest print catalog brands—Wireless, Signals and Seasons—would do better under one URL, GiftCatalog.com?

The answer lies in the shopping experience. Market researchers told Target’s online division, target.direct, that potential for cross-selling among the three catalogs was high, but that navigating three different sites was not as easy it should be. So GiftCatalog.com was born to aggregate three separate brands into a one-stop shop.

The Core Brands

As mentioned, the brands comprising GiftCatalog.com include Wireless, Signals and Seasons. The three catalogs were launched by Rivertown Trading Co., a direct marketing start-up that later joined with Target. But that’s getting ahead of ourselves. Let’s start in 1982.

“The Prairie Home Companion” by Garrison Keilor was the most successful radio show produced by Minnesota Public Radio (MPR). Officials at the non-profit member station of National Public Radio decided to sell a T-shirt based on the show and broadcast a phone number to order it. The shirt sold out quickly and gave the station a new mailing list to which to target mail order offers.

Linda Bauer, controller for target.direct, says, “In the 1980s, mail order was really much easier than it is today, and we were in a list-growing mode.”

The runaway success of the direct mail efforts led to a full-blown catalog. Featuring product tie-ins to radio shows on MPR, the catalog was called Wireless. By 1987, the success of merchandising and the Wireless catalog endangered MPR’s non-profit status, so catalog operations were spun off to become Rivertown Trading Co.

In terms of sales and profits, the gambit of a new catalog worked. So Rivertown executives began branching out, seeking new business opportunities. They set their sights on a second title, and this time looked to television. Together with TV station WGBH in Boston, Rivertown launched Signals, which features products related to popular public TV shows. Later, a third title, Seasons, was established to offer a broader assortment of gifts and products targeted primarily at women.

With three growing brands in its portfolio, Rivertown then increased its mailing frequency by sending supplemental catalogs, such as the video section from Signals.

An e-commerce site, ILoveADeal.com, was established to feature overstock and liquidation items from all three catalogs. A print version of the ILoveADeal.com catalog is in the works, and will be mailed shortly. Says Bauer, “Being a liquidation vehicle, ILoveADeal.com is perfect for the Web. And really, the next evolution from the paper catalog—given the whole commodity cost structure of direct marketing—is to go online.”

As the 1990s progressed, paper and mailing costs rose, as did the presence of direct marketers on the Internet. The company’s next strategy, Bauer says, was to forge further ahead into the Web-marketing frontier.

Retail Food Chain

By 1998, the online storefronts for Rivertown’s catalogs were in the planning stages when the company was acquired by retail conglomerate Dayton Hudson Corp., which would soon change its name to Target Corp.

“With the acquisition of Rivertown, our primary strategy was to offer our catalog products through different channels, with the Web being the primary focus,” Bauer notes. “Target also wanted to start a Web-based channel for its retail market. So we combined the groups, and that’s what today is called target.direct.”

Because Rivertown was in the process of building its e-commerce platform when it was acquired by Target—and Target had not yet started that component of its business—all of target.direct is standardized on the same Web solution. That means the Web sites for Wireless, Signals, Seasons, I Love A Deal.com, and Target’s brick-and-mortar outlets, which include Marshall Field’s and Mervyns, all run on the same e-commerce backbone. And they share a call center and fulfillment operation.

“That’s where we’ve leveraged our cost,” says Bauer. “Different brands, different look and feel, different Web pages, but the same underlying structure drives it all.”

Mary Pat Ladner, senior manager of the creative department for target.direct, recounts other efficiencies of scale. For instance, most of the product photography is shot digitally, and all images are in centralized repositories accessible by the various creative personnel. “We hire outside photographers, but we have an in-house creative team,” she says. “Our print creative team works in conjunction with the Web navigation team, so we just shoot and write things once.”

Although all of these operations were running on the same e-commerce platform, unfortunately they were not integrated

for the consumer. Officials of target.direct predicted that a seamless integration of these URLs would lead to greater crossover sales. And the idea of GiftCatalog.com was born.

All Brands in One Cart

“We conducted online research about our guests and their purchase patterns,” Ladner says. “One of our findings was the common merchandising attributes across the three different brands of Seasons, Signals and Wireless.” Among those attributes, she notes, are price ranges, product quality and gift uniqueness.

From a merchandising standpoint, Bauer explains, “What we’re after as a direct marketer is the ‘unique gift’ or the one that you can’t find necessarily from other retailers or catalogs and would be the product that, when you see it, you’d say, ‘Oh, that would be perfect for Aunt Sally!’

“In time, both Wireless and Signals really have lessened almost to nothing their dependency on public television and radio products,” continues Bauer, “but have evolved into their own stand-alone brands, mostly in the gift niche.”

In addition, research found that visitors—or what the company refers to as “guests”—to the Web sites were attracted by breadth of selection. Ladner says, “We initially thought we’d keep all brands separate; however, the more we got into it, the more we considered offering our guests a wider range of gift selections with an easy-to-shop site, with one checkout instead of three. We talked to our guests [and presented] some prototypes, and they thought it was a great idea.”

Mike Moroz, general manager of the Catalog Group for target.direct, notes, “There’s a lot of equity built into the individual brands. Possibly undermining that with a new brand is something we wrestled with through the entire project.”

Ladner says they looked for a name that wouldn’t stand in the way of its strong base brands. She explains, “Wireless, Seasons and Signals have distinct personalities, and we didn’t want something that would be in conflict with those. We also wanted something that, down the road, could be expanded. So our idea of GiftCatalog.com was to never make it the primary brand. ... It’s more of an ‘eyebrow’ above the brands.”

Bringing all of the catalog Web sites together under one URL with integrated search capabilities and one shopping cart, was not a difficult process, Ladner notes—their back-end operations already were integrated. To design and implement the new front end, a cross-company team was formed, comprised of staffers from the direct marketing, creative, Web navigation, technical services and finance areas, and led by a project manager.

“Our hurdles were less with the Web site and more with the guest advantage of being able to put merchandise from different catalog titles into one shopping bag,” says Ladner. “How do we track sales and handle branding back to the guests in terms of the packing slip, etc. That’s where we spent the most time in the logistical-planning phase.”

To solve these issues, representatives from guest services and warehouse management met with the project manager to map out the guest experience and provide for all branding contingencies. Moroz says the process of crediting GiftCatalog.com’s online sales back to the appropriate catalog remains a challenge, as it is for many multi-title catalogers. Says Moroz, “So far we’ve been making accurate assumptions for the most part. But we’re currently looking for an order-management system to help us allocate sales even more accurately.”

With an eye to preserving the brand equity of the individual catalogs, GiftCatalog.com’s launch on July 24 did not have the fanfare and media coverage of a typical dot-com birth. An e-mail campaign announced the new URL and offered a chance to win a shopping spree for all guests who registered at the site.

GiftCatalog.com’s new print catalog, mailed in the fall, features all three logos on its cover: Signals, Wireless and Seasons. Page 2 offers an explanation of GiftCatalog.com’s strategy: “Three exceptional gift catalogs, one easy-to-shop Web site.” And page 3 is designed to look like an online catalog page, complete with navigation bars. An order form is included for those customers who prefer to avoid online shopping.

The catalog’s initial mailing went to 750,000 households. The prospect list was comprised of customers from all three catalogs, registered users of GiftCatalog.com and names from carefully chosen rented lists. The same creative teams that produce the other three print catalogs—which the company will continue to mail—worked on the GiftCatalog.com premier print edition. And featured products include best-sellers from the other three catalogs.

An aggressive marketing campaign for GiftCatalog.com is in the works, says Moroz. The team will have plenty to talk about: Next summer, parent company Target will open an online store through Amazon.com. How this will impact GiftCatalog.com and Target’s other online channels is not yet known, says Moroz. It recently was announced that Target selected Amazon’s e-commerce technology solutions, including order-fulfillment and customer-care services, for its online brands. Says Moroz, “We expect to leverage the tremendous traffic and loyalty that Amazon has.”

Bauer notes, “We’ve been through a lot of change. The 1980s were very good to Rivertown, and the ‘90s were more about figuring out exactly what the guests want and how they want it. With the acquisition by Target, we’re looking at offering three channels—the retail component, the catalog and now the Web. We’re not intending to have GiftCatalog.com substitute for the other catalogs; we’re just trying to figure out how we can actually mail less paper and still get the same selection in front of the guests.”

Allison Eckel is a freelance writer living in Germany. She is a former editor of Printing Impressions magazine and Publishing and Production Executive magazine (now Print Media).

Seasons

119,639 12-month buyers

Average household income: $65,000

87 percent are women

Average sale: $80

List manager: Millard Group,

(603) 924-9262

Signals

467,972 12-month buyers

Average household income: $62,000

72% are women

Average sale: $90

List manager: Direct Media,

(203) 532-2501

Wireless

405,615 12-month buyers

Average household income: $63,000

71% are women

Average sale: $69

List manager: Direct Media,

(203) 532-2501