Retailers Talk Social Media, Marketing ROI

A room full of direct marketers listened as three cross-channel retailers discussed marketing strategies including social media, mobile, sales attribution and more at the Direct Marketing Club of New York's June luncheon in Manhattan yesterday. Jared Blank, vice president of e-commerce at Tommy Hilfiger, moderated the “Masters of Multichannel Engagement” program. Blank was joined on stage by Mara Kelly, vice president, database marketing and sales promotion, Loehmann's; Adam Fiefer, director, direct marketing, Coach; and Gabriela Urvina, marketing manager, OneStopPlus.com.

Social Media's Role in Integrated Communications
Coach uses Facebook as an email acquisition tool, said Fiefer. Email addresses acquired from consumers on Facebook are segmented and those consumers are then marketed to differently than the rest of Coach's list. They may receive different offers and invitations to contests, among other things. The social media site is a revenue stream for the brand, but it's a small one at this time, noted Fiefer.

For OneStopPlus.com, social media acts primarily as a customer service tool, said Urvina. The brand's customer base of plus-size women frequently turn to social media to vent their frustration over not being able to find fashionable apparel in their size at other department stores. OneStopPlus.com uses Facebook to listen to its customers so it can better serve their needs. This includes recently launching a Facebook store as another way to put its products in front of an engaged audience.

OneStopPlus.com's Facebook fans have taken it upon themselves to police the retailer's Facebook page, said Urvina. The brand's customers tend to be very vocal, and if they feel that OneStopPlus.com is being unfairly criticized, they're quick to come to its defense. In turn there's been a real community developed among the brand's fans, who frequently communicate with each other in addition to OneStopPlus.com.

Fans on Loehmann's Facebook page are frequently touting the upscale designer clothing that's available in the brand's brick-and-mortar stores. As an off-price retailer in the mold of T.J. Maxx and Marshalls, Loehmann's isn't able to publicize this information itself due to contracts with suppliers. So its customers are doing the work for the brand via social media. This has helped attract new customers, but the brand is still looking for more.

"People who know Loehmann's love Loehmann's," said Kelly. "The challenge is making more people aware of our brand."

How Email Fits Into the Mix
Direct mail and email are the two biggest and most profitable marketing channels for Loehmann's. Direct mail is able to reach all of the customers and prospects on the company's list, while email reaches those that the company has an email address for, which is about half its database, Kelly said. Loehmann's relies on constant testing — mail/holdout, offers, markets — to find the optimum return on investment for its marketing spend. Direct mail consistently outperforms email in terms of response, said Kelly.

Acquiring email addresses is a major priority at Coach. There's pressure from management to eliminate direct mail campaigns because of cost, said Fiefer. The retailer is constantly testing to see which customers do and which don't need to be sent direct mail to drive purchases. For online orders, attribution is given to the last click, but when a consumer has been sent a direct mail piece as well, the issue of which marketing channel gets credit for the sale becomes a little more troublesome.

Coach has begun personalizing its emails based on past shopping behavior. For example, if a consumer has come to its website and looked at jewelry, they're going to receive an email highlighting the retailer's jewelry offerings. Personalized emails have proven quite successful for Coach, as has retargeting. In fact, retargeting has become one of the retailer's top customer acquisition channels, said Fiefer.

OneStopPlus.com has also found the positive effects that retargeting can have on conversion rates. After some initial worry that the practice was likely to draw privacy complaints from its customers, the retailer noticed several other companies using retargeting, so it decided to give it a try. It hasn't been disappointed by the results, said Urvina.

Challenges and Opportunities
OneStopPlus.com is taking a different route than most cross-channel retailers — it put its first catalog in the mail this week after previously selling exclusively online. The incremental lift in sales that mailing catalogs produces will be measured, just as the ROI of every other marketing channel used by OneStopPlus.com is, Urvina noted.

For Loehmann's, mobile presents a huge opportunity. While the retailer doesn't have an e-commerce site, it's dipped its toes into the mobile space via text messaging campaigns and a coupon offer on mobile app Yowza. As for the challenges the retailer faces, daily-deal sites (notably Gilt Groupe) pose a formidable opponent. The sites are able to promote brand names in their marketing efforts, which Loehmann's can't, putting it a distinct disadvantage.

Speaking of flash-sale sites, Coach has begun using the format too. The retailer's factory business has used the sales model and seen it generate an incremental profit. Coach also plans to invest more resources in building out its mobile website, which is in its infancy.

All panelists agreed that new technology is great, but cautioned that it must make sense for your brand. And making sense for your brand is a nice way of saying that it must produce a strong ROI.