Case Study: E-commerce Blooms at Bloomingdale’s By Mail

Problem: Bloomingdale’s By Mail catalog didn’t have an e-commerce counterpart in 2002.
Solution: The company put its print catalogs online and improved e-mail marketing efforts a year later.
Results: Business increased fourfold in one year, and Bloomingdale’s online sales channel has grown to more than 20 percent of its overall business.

In early 2002, Bloomingdale’s executives realized they needed to expand their e-commerce capabilities.

“At the time, the company’s site merely was a store marketing Web site,” explains Charlie Silver, vice president of marketing at Bloomingdale’s By Mail. The company initially set up a catalog quick-order function on its Web site. The only available online shopping option, this feature allowed customers to enter a SKU and a source code (retrieved from the print catalog) to purchase a product.

But Bloomingdale’s soon discovered that the quick-order feature didn’t generate much revenue, and it didn’t satisfy the merchant’s need for a low-cost shopping channel that would offer more options to customers.

So in late 2002, Bloomingdale’s contracted CrossMedia Services, a Chicago-based provider of online catalog promotional services, to add virtual catalogs to its Web site. “The virtual catalogs enabled more options for customers and generated up to $500,000 in demand, versus $700 using just the catalog quick-order form,” says Silver.

CrossMedia also organized Bloomingdale’s Web site by item and category so customers could have a traditional way of shopping, says Silver.

Moreover, business increased fourfold in one year.

E-mail Marketing Efforts

The addition of virtual catalogs wasn’t the only factor in rising sales. The company’s e-mail marketing efforts played a definitive role, too.

Before Bloomingdale’s posted its catalogs online, its e-mail marketing efforts primarily consisted of monthly item promotions or catalog notifications sent to its housefile. Soon after it posted catalogs online, it increased e-mail marketing campaigns. They began with a bimonthly e-mail in the first quarter of the year, followed by a weekly or biweekly e-mail in the second and third quarters.

Executives carefully integrated their e-mail marketing efforts with each aspect of the catalog business. For example, catalog notification e-mails were sent based on circulation plans; sale e-mails were based on promotional plans; and offers for key items and assortments were based on merchandising plans.

“In addition to being inexpensive, e-mail marketing also allows us to get messages out quickly, test concepts and drive cross-channel activity,” says Silver.

Bloomingdale’s also saw concrete results from its e-mail marketing: Campaigns generated 45 cents in demand per recipient; opt-outs remained low at 0.1 percent; and e-mail generated 30 percent of overall Internet demand last year.

In summary, the Internet has grown to more than 20 percent of Bloomingdale’s business vs. 8 percent in 2002.