Crossing Pointe: Blair’s Investment Takes Off

Not many start-up catalogs can boast annual sales de-mand of more than $50 million, a one-year housefile-growth rate of a whopping 126 percent, and more than 300,000 12-month buyers. But that’s just what Crossing Pointe, the newest division of Blair Corp., has so far achieved during its first three and a half years in operation.

Crossing Pointe’s mission has been to bring younger, more affluent customers to its 94-year-old parent company, Warren, PA-based Blair Corp. Officials at Blair, a veritable stalwart in the direct mail industry and the eighth largest consumer apparel cataloger in the United States, wanted to broaden their customer base, and they decided that “down-aging” their file was in order.

Indeed, the average age of Blair’s female-apparel customer is 64, and a company can target an aging population for only so long before ... well, let’s talk brass tacks ... more and more of its most loyal customers head to that great shopping center in the sky.

“Blair needed to attract not just new customers, but a whole other generation,” says Lewis Shapiro, vice president and general manager of Crossing Pointe and a veteran merchant of women’s apparel. “So Blair created a brand-new business, Crossing Pointe, to accomplish that.”

And did they ever. Crossing Pointe’s average customer age is 48, and the catalog already is well-entrenched as a direct marketer of women’s apparel and home goods to the massive baby boomer generation with its 37 million female consumers. Already, the catalog division has become a significant growth initiative for Blair, and has increased its annual percentage of corporate revenue each year, says Shapiro.

How did Shapiro and Blair President and CEO John Zawacki achieve impressive results in a relatively short period of time — and during an economic downturn, no less? Moreover, what new tricks is this hip, young catalog teaching its 94-year-old parent? And how are Blair’s solid marketplace reputation and vendor relationships helping its youngster expertly navigate the learning curve?

This is the story of a successful startup.

Target Demographic: Not Just Younger, But Wealthier

Blair’s goal in starting Crossing Pointe was not only to attract a younger audience, but a more affluent one as well. As numerous demographers have noted in the past decade, the United States currently is undergoing the greatest transfer of wealth in the history of mankind. That is, American fortunes made in the post-WWII period now are being passed down to baby boomers. Moreover, being a highly educated generation in the aggregate has enabled boomers to amass their own fortunes as well.

Blair officials looked at these demographic trends and decided to go after this highly lucrative market. Rather than reposition the Blair brand for a new audience, they decided a whole new brand was in order. In 1999, the Crossing Pointe division was born; in fall 2000, the first catalog was mailed, and crossingpointe.com launched.

Shapiro describes Crossing Pointe’s product selections as more fashion-forward than Blair’s. Best-sellers this past season included merino wool separates, denim and footwear.

Like Blair, Crossing Pointe maintains a keen eye on the value-conscious shopper, and product prices reflect that imperative. Crossing Pointe’s top-selling price points range from $29 to $49, says Shapiro.

Indeed, a glance through a recent catalog edition reveals highly fashionable and yet reasonably priced women’s apparel, including a tailored denim peacoat for $49; contemporary leather-upper Mary Janes for $49; and chunky ribbed-knit cotton turtlenecks in misses sizes for $29.

Natural fibers such as cotton, silk, wool, linen and leather are priorities, says Shapiro, because that’s what Crossing Pointe’s baby boomer market prefers. On the whole, the styles are less trendy than, say, Nordstrom, but more fashion forward than the timeless classics found in the Talbot’s or L.L. Bean catalogs.

The common denominators among Crossing Pointe’s product selection are value and quality, says Shapiro, and he credits Kathy Parigian, merchandise director, as the catalyst for a successful merchandise mix. “The quality of our selection is reflected in our return rates, which are lower than average for women’s apparel, even though we’re also a relatively new merchant,” says Shapiro. “And adding women’s and petite’s sizes has helped grow both our customer base and revenues.”

Award-winning Actress as Partner

Actress, painter and author Jane Seymour’s partnership with Crossing Pointe has been well-covered in the industry trade press. The cataloger not only sells apparel designed and inspired by this Emmy-award-winning actress, but recently tested a 24-page Jane Seymour catalog.

How Crossing Pointe landed this particular celebrity partnership is an interesting story involving inspiration and behind-the-scenes connections. Here’s how Shapiro tells the tale:

“I was on a plane coming back from Asia, and I was thinking about getting a person who would represent the Crossing Pointe customer base well. I was on a Cathay Pacific plane, and I had the airliner’s magazine open, and Jane Seymour was pictured in an ad for Mandarin Hotels. I’m looking at her in the ad, and looking at her ... and it suddenly dawned on me: “That’s her! That’s the face of Crossing Pointe. She’s perfect!”

“Turns out that one of my former associates knows Jane’s husband, James Keach, and set up a meeting for us. So I went to her house in Malibu, and gave her my pitch. When I was done, I asked her, “Would you like to participate?”

“Well, it turns out that one of her lifetime aspirations has always been to design clothing! But not high-end items; rather, she wanted to design wearable, comfortable clothing for the masses. So, yes, it was kismet!”

Today, Crossing Pointe catalogs include several pages of exclusive apparel, footwear and accessories either designed by the actress or inspired by her watercolor and oil paintings. She even occasionally models some of her designs in the catalog. Shapiro says Seymour plays a central role in the design process. “Everything in her collection that we sell is approved by her,” he says.

In a written statement, Seymour noted her enthusiasm for the partnership: “Through Crossing Pointe I can transform my creative energy into fashion designs and offer an affordable line of women’s apparel that embodies my art and my lifestyle.”

Seymour also noted that she wanted to work with Blair because of the company’s “experience, high level of credibility and integrity.” Her signature collection debuted in the Crossing Pointe catalog in early 2002. And while Blair officials wouldn’t report annual sales for the actress’s collection, they did note that the partnership has given Crossing Pointe significant exposure in the national media.

Management Expertise Found

When Blair CEO John Zawacki was gathering the management team to run Crossing Pointe, he could have easily searched within Blair’s impressive rank of catalog industry veterans. But he chose to look beyond Warren, PA. Indeed, Crossing Pointe’s management team includes a diverse group of catalog and retail professionals.

For example, Shapiro, a Bronx, NY, native, had started in mail order in 1970 at Lane Bryant, and by 1979 he was a merchandising vice president. In 1982, Lane Bryant was acquired by Limited Inc., and the catalog/direct marketing business was renamed Brylane (to differentiate it from the retail stores).

Shapiro was promoted to senior vice president of merchandising, and he later held the position of senior vice president/general manager for Lerner’s catalog business.

After leaving Lerner, he created and launched a new catalog for Curtains and Home, a 50-store, home-decor retailer. Then in 1994, he embarked on a career in direct-response TV (DRTV) on cable. He helped launch America’s Health Network, a multichannel marketing endeavor that combined DRTV, catalog and Internet sales. “It was the only health-focused network on the air at the time. We had shows hosted by accredited doctors and a database partnership with the Mayo Clinic,” Shapiro recalls. “And within each hour we had 15-minute merchandise sales segments featuring products consistent with the topics discussed on that hour’s program.”

Unfortunately, the venture went under, and in 1999, Shapiro was hired by Zawacki to work for Blair.

Shapiro says Zawacki wanted to hire a leader experienced in direct marketing a catalog to baby boomers. “With my Brylane/Lerner background, I had the merchandising, marketing, general management and e-commerce experience Blair was looking for, and the track record in selling women’s apparel to launch the Crossing Pointe division,” says Shapiro.

When asked if he had any regrets in moving to Warren, a town of only 12,000 just outside of the Allegheny Mountains in the northwestern quadrant of Pennsylvania, Shapiro says with a laugh: “Well, it’s not New York, of course.

“However,” he continues on a more serious note, “Blair includes the loveliest people I’ve met in all of my years in direct marketing. No kidding. Blair’s reputation is stellar. The corporation has strong core values and excellent community and social consciousness. They’re just a very reputable company, and I’ve always known that about them. Now that I’m here, I can see why they have that great reputation.”

Technology Partners

From the beginning, Blair officials knew Crossing Pointe would need a strong e-commerce presence given its younger — and presumably, more tech-savvy — target demographic. But e-commerce admittedly was not Blair’s strong suit in the late 1990s. So Crossing Pointe officials looked elsewhere for help with their Web launch.

They turned to CommercialWare, a provider of the catalog management system CWDirect, and Integrated Information Systems (IIS), a provider of integrated information solutions, to help open a Web store in less than six months and to coincide with the print catalog’s first mail date. Today more than 20 percent of Crossing Pointe’s sales are via the Web.

CommercialWare’s system is used for more than just e-commerce — indeed it is Crossing Pointe’s operating system. Its capabilities include marketing analysis, merchandising, order entry and customer service, and it’s been integrated with Blair’s distribution system for order fulfillment. Most important to Crossing Pointe, the system offers a common customer view for both its e-commerce and catalog channels.

The cataloger also has partnered with Amazon.com; in fact, Crossing Pointe was one of Amazon’s charter members of its Apparel and Accessories Store. IIS helped Crossing Pointe integrate its catalog and fulfillment systems with Amazon’s Merchant e-commerce platform.

In discussing Crossing Pointe’s partnership with Amazon, Shapiro says: “We looked at the millions of people buying books online, and we thought, ‘Why can’t that happen for apparel?’ The Amazon demographic matched the Crossing Pointe customer profile. So we jumped at the opportunity to sell our merchandise on the Amazon site,” Shapiro recalls.

He wouldn’t reveal sales figures from the Amazon site, but did mention he was happy with the response and the progress that Amazon officials have made with the site. “We would, however, like to see higher visibility and more promotional opportunities for Crossing Pointe products on Amazon,” he contends. “But sales-wise, we’ve hit budget.”

Throughout the company’s own e-commerce buildup, Crossing Pointe officials knew they needed to supply a Web site that offered exceptional navigation and search capabilities. And that’s just what they achieved. Crossingpointe.com is exceedingly simple to use, as well as intuitive and fast — all key attributes to attract today’s online shopper.

Additionally, the new corporate-wide systems knowledge has helped parent company Blair, says Shapiro. “Blair’s legacy system served the company well in the past, but may not have in the future. Crossing Pointe has been a catalyst for Blair’s technology upgrades,” Shapiro notes. “We’ve either researched or already purchased systems that can help Blair as a company reach $1 billion in annual sales, a goal set by our CEO.”

Not all of Crossing Pointe’s e-commerce tactics have met with success. For example, the site once offered My Virtual Model™, a technology that helped consumers view how apparel would look on a model shaped like their own dimensions. But Crossing Pointe discontinued the service. “Although the concept was a good marketing tool, we did not realize the anticipated return on our investment,” Shapiro explains.

E-commerce expertise has become a core competency as Crossing Pointe has evolved.

Today, much of Crossing Pointe’s e-commerce and Internet marketing operations are performed in-house. Marketing Director Gary Smith and his team are responsible for Crossing Pointe’s Web site, e-mail campaigns, and traditional catalog marketing activities. “Gary’s ability to keep up with the marketplace, direct marketing trends and with technology issues is truly remarkable,” says Shapiro.

Achievements and Future Challenges

When asked what he is most proud of so far with Crossing Pointe, Shapiro says without hesitation: “Execution of the plan. With all due arrogance, this has been the most well-executed plan I’ve ever experienced. The Blair environment allowed us to do that. They stuck with us, believed in what we were doing — believed, more importantly, that we could do it.”

Shapiro also thinks that passion has, in turn, re-energized Blair’s associates. “From us, Blair is learning a different perspective on the business,” he notes. “So we’ve been able to add something to Blair’s learning curve in return.”

And when asked if he would have done anything differently, Shapiro says he would have started the catalog in 1997 rather than 1999, right before the economic downturn. “These last three years have been tough for everyone, no doubt about it,” he says. “But as far as building the housefile, merchandising and marketing strategies, there’s very little I would have changed.”

Shapiro lists Crossing Pointe’s three biggest challenges moving forward: sustain its already impressive momentum into 2004; manage inventory well; and further solidify the catalog’s position as a powerhouse in the baby boomer market by continuing to build the 12-month housefile.

“We plan to focus on the CRM [customer relationship management] aspects of our business,” he says. “Now that we really know who our targets are, we can more efficiently turn prospects into customers.”

He says he plans to use more propensity-based prospecting in the catalog’s marketing mix, as well as some e-commerce tracking capabilities. “We’ve added DoubleClick’s Channel View to our e-commerce operations, and already it’s helping us get a better handle on cross-channel buying behavior. We expect it’s going to have a substantial benefit on the business.”

No doubt Shapiro’s vision and passion, along with Zawacki’s steady leadership, are characteristics that also have — and will continue to — substantially benefit Crossing Pointe.

Crossing Pointe’s List
12-month housefile: 322,258
Rental cost: $110/M
List manager: Response Media Products, Marli Gonzalez White, account manager, (770) 936-6256, marley@responsemedia.com

Take-away Tips from Crossing Pointe

Lewis Shapiro, vice president and general manager of Crossing Pointe and a veteran merchant of women’s apparel, offers the following tips to start-up catalogers:

- “Focus, focus, focus ... then execute the plan. Believe in what you’re doing,” he says.
- Hire people who have a passion for direct marketing.
- To bring a broader perspective to the management table, hire a diverse group of professionals.
- Retain your reputation as a good company to work for and with, says Shapiro.
- Track your results. Numerous technology solutions can help. Use them to get a better idea of who your customers are and how they’re finding you, either in print or via the Web.

About Crossing Pointe
Headquarters: Warren, PA
Parent company: Blair Corp.
Crossing Pointe’s 2003 sales through Q3: $52 million
Products: Women’s apparel, housewares
Average order value: $100+
Target demographic: baby boomer women
Number of SKUs: 10,000 to 12,000
Rank on the Catalog Success Top 200 list: 8 (as measured by housefile-growth rate); 126 percent 12-month housefile-growth rate from Dec. 2001 to 2002
Annual catalog circulation: 15 to 20 million
Printer: Quebecor World

Chronology: Blair & Crossing Pointe

1910 John L. Blair, a student at the University of Pennsylvania and a native of Warren, PA, begins selling men’s raincoats for a classmate who inherited a raincoat factory. Blair establishes the New Process Rubber Co. using $500 in borrowed funds to print and mail flyers to 10,000 undertakers, his target demographic for the raincoats. He sells 400 coats, which featured a layer of rubber between two layers of cloth. For many years, Blair runs the business from Philadelphia, while shipping was done across the state in Warren.

1920 New Process opens two retail stores.

1921 Blair buys numerous buildings in Warren, PA, to house his growing company.

1928 Blair’s brothers Harold and Lester join the business. Soon the company is selling other products, including motor oil, perfume and electrical appliances, via direct mail.

1933 A fire results in half a million dollars in losses, but the Blairs are back in operation within 10 days.

1960 Harold retires from the firm.

1962 John and Lester pass away, leaving the second generation of Blairs, including John “Jack” Blair Jr., in charge of New Process.

1973 Blair Jr. opens a distribution center in Irvine, PA. Annual sales hit $200 million.

1984 Forbes magazine names New Process the largest publicly held direct mail business. The company is debt-free and has a housefile of 12 million names.

1987 New Process is renamed Blair Corp.

2000 Realizing it needs to attract a younger and more affluent audience, Blair launches its first Crossing Pointe catalog and Web site.

2001 Crossing Pointe partners with actress Jane Seymour to launch her collection of women’s apparel sold exclusively through the catalog.

2002 The first items in the Jane Seymour Signature Collection debut. Crossing Pointe has nearly 300,000 names in its housefile, a 126-percent increase from 2001. Annual sales for Blair Corp. top $560 million.