Migrating Merchandising from Catalog to Dot-com

As successful catalog merchants, you’re using merchandising techniques every day to deal with issues such as “can’t touch it, can’t try it on.” Let’s face it, returns are a hassle.

When it comes to selling products online, familiarity with these issues is just one advantage you have over both Internet-only “pure-plays” and store-based, bricks-and-clicks e-tailers.

Pure-plays have the formidable task of simultaneously launching and marketing a new brand, sourcing and perhaps stocking product, creating visual assets, implementing technology, handling fulfillment and developing a customer service component (no wonder so many have failed!). Bricks-and-clicks players have their branding and merchant skills in place, but often lack the direct marketing components essential for online success.

As successful catalog merchants, you have all of this in place—except to get a handle on Internet technology.

Sounds as if all you need to do is re-purpose your catalog assets for success on the Web, right? The masterful strategy for multi-channel shopping is to use each channel’s strengths to deliver the best possible customer experience—from the tangibility of the in-store experience, to the portability of a printed catalog to the interactivity of the Web.

The Keyword Is Interactivity

If you’re going to entice your customers to shop for your wares on the Internet, give them value-added reasons to do so, not just a print catalog on a screen. Perhaps the most obvious advantages of Web over printed catalogs is that you’re not limited to what you can fit on a pre-determined number of pages, and you have the flexibility to change offerings as often as your time and budget allow. Point out merchandising offerings to your Web shoppers.

Knowing Your Customers is the Starting Point

One of the most customer-centric advantages of this channel is that you can deploy merchandising features and functionalities to appeal to your different customer segments and their many shopping motivators or styles.

For example, “Directed Shoppers” know exactly what they want: to be in control of the process, shopping quickly and efficiently. Provide them with a robust search engine to help quickly locate products on your site coupled with an express checkout. Conversely, shoppers with “just visiting” mindsets may be converted to buyers through limited-time offers and promotions, contests and personalization tools.

Bi-annually, the E-tailing Group tracks 10 different merchandising metrics on 50 Web sites to benchmark which features are being used by leading e-tailers. See how your site stacks up against these second-quarter highlights:

SEARCH: 70 percent of the sites scanned allowed shoppers to search by category and department, followed closely by keyword (64 percent).

Depending on the product mix on your site, consider other helpful search options, such as brand, product attribute, price or addressing specific customer segments. For example, Nordstrom’s site has three different levels of search: a basic keyword entry, an advanced search with up to five options or a power browse product index. Whichever search options you offer, be sure the functionality works. “No matches found” messages are worse than no search at all.

PROFILING: 86 percent of the sites evaluated had “My Account” features for customers to store and access personal information essential for true one-to-one marketing. Among catalogers online, Harry and David does an exceptional job in this area, and includes leveraging past purchases as reminders. On the Internet, profiling also includes an array of interactive tools (44 percent), such as quizzes, configurators, calculators, and fit and sizing systems. In the apparel category —where more than half of the estimated $8 billion in returns are generated because of sizing issues—e-catalogers such as Lands’ End anticipate that their investments in these new technologies will result in substantial ROI.

IMPULSE BUYING: 88 percent of the sites surveyed used featured products to draw attention to specific goods they wanted to move. Online you also can be creative with suggestive selling by using up-sell (26 percent) and cross-sell (50 percent) in ways that wouldn’t be practical in print. The only caveat would be that these related offerings be really relevant. Boston Proper gets kudos for its database of related products that dynamically delivers complementary “Proper Coordinates.”

PROMOTIONS: 80 percent of the sites in our survey used general promotions (e.g., free shipping, gift with purchase, threshold incentives) and 70 percent relied on seasonal promotions as merchandising tools to refresh their e-stores by re-organizing products around events and holiday “themes.” The use of online coupons and rebates (32 percent) to appeal to price/value-driven customers is particularly strong among those merchants that traditionally deploy these tools in other channels, such as Office Depot.

LOYALTY: 88 percent of the sites surveyed used targeted e-mail. This tool has become a preferred marketing method for cost-effective customer retention. However, as e-mail users are being inundated with too much mail, it’s imperative that your messages be well-targeted and relevant to each recipient’s interests. REI is an example of a catalog e-tailer that’s doing a good job at branding its e-mail, “GearMail,” through incorporating contests and letting customers customize how they get their e-mails.

CONTENT: 94 percent of the sites surveyed included themed custom content areas. The ability to offer value-added product information and related content is an advantage of selling on the Web vs. in print or in-store. The challenge is to determine how much content customers expect in your category. For example, in the consumer electronics category, 800.com relies on “self-help” tools to simplify complicated feature options.

COMMUNITY: 70 percent of the sites surveyed sent e-mail newsletters to their customers to develop relationships that foster repeat sales. As with targeted e-mail, it’s essential to let customers opt-in or -out of getting these communiqués. Sites such as VitaminShoppe.com that include timely news in their newsletters, in addition to product specials and branding elements, are most apt to retain customer interest.

GIFTING: 70 percent of the sites in our survey presented lists of gift suggestions. Those that truly deliver a best-of-breed online shopping experience create complete gift centers (68 percent) with interactive tools, such as gift search (38 percent). This tool enables customers to quickly find gifts by age, gender, recipient interest or occasion. Catalog merchants, such as Victoria’s Secret and Crate and Barrel, are among those capitalizing on the incremental revenues possible through a comprehensive online gift buying strategy.

CHANNEL EXTENDERS: 83 percent of those surveyed, who distribute via catalogs, included catalog requests on their sites. Quick shop or catalog quick order (54 percent), a function that enables customers to search or order by entering a catalog item number, is a feature being offered by a growing number of online catalogers. Traditional catalogers, like Sharper Image, are already finding that online auctions are successful sales drivers.

CUSTOMER SERVICE: 98 percent surveyed sites provided “E-mail Us” functionality, and 96 percent listed contact information. Making it easy for customers to communicate with you is imperative in gaining their trust and confidence.

Order tracking: 82 percent help improve the post-order performance of sites; this is critical for customer retention. Note, too, that immediate e-mail confirmation will reduce associated call load while keeping customers informed. Catalog call centers are evolving into customer care centers as e-merchants begin to offer real-time live help (20 percent) using e-mail, chat or telephony.

As you migrate from catalog to dot-com, the ultimate challenge is to find the right balance of how and what really works. With too few interactive aids, your e-store is merely an electronic brochure; conversely, too many bells and whistles slow down your load times. According to Boston Consulting Group’s findings, customers expect the Internet shopping process to take less than 10 minutes, so speed is a factor. At different times, customers may choose to come in, mail-in, call in or log on.

Regardless of the delivery channel, your success is dependent upon using best-of-breed merchandising skills to present the products the customer wants in a manner that will encourage purchasing, coupled with timely delivery and exceptional customer service.

Lynn Pregont is partner-affiliate at Chicago-based e-tailing group, a consultancy that focuses on merchandising online. She can be reached at (312) 255-9590 or lynn@pregont.com.