Thinking Outside the Box

About this time nine years ago I was getting set to be married, so I registered my china and crystal patterns with a Big Department Store’s bridal registry. Then, a funny thing happened: I started receiving boxes at my home from someplace called Ross-Simons.

“What store is this?” I asked my mother, for while it carried the precise gifts I had selected, I had neither been there nor heard of it. “It’s not a store. It’s a catalog,” she replied.

More recently, in the fall of 1997 my sister was wed. For her bridal registry, she chose to skip the Big Department Store and jumped online, accessing Ross-Simons’ bridal registry at www.ross-simons.com.

“Our bridal registry was one of the first pieces of our business that we put on our Web site because it made so much sense,” says Peter Howard, vice president, marketing for Ross-Simons.

Since its Web site first debuted in early 1996, Ross-Simons has made great strides in turning what was initially a lead generation and bridal registry tool into a fully integrated electronic version of its catalog—no small feat for a traditional, conservative catalog retailer that no one would dare call “cutting edge” at first glance.

“We had a fairly simple site at first,” Howard admits, noting that in its early stages, www.ross-simons.com was primarily a lead generator for the catalog and a vehicle for the bridal registry. Largely in response to industry trends and following the lead of some other catalogers, Howard says that he and company president Darrell Ross were prepared to make a reasonable investment in the Web by 1997.

“We wanted to be ready for e-commerce, but we didn’t want to overreact and spend millions,” Howard says of the company’s slow-but-sure strategy. “While the Web is an area where we see the potential for a lot of growth, our core business is still our print catalogs.”

LONG-STANDING TRADITION in RETAIL AND CATALOGS

The Ross-Simons catalog got its start in 1981 off the launching pad of a successful family jewelry store business that was founded in 1952 by Sidney and Lillian Ross. After expanding its retail presence in Rhode Island during the sixties and seventies, the company entered the direct response sales arena in the ‘70s as a means of expanding its market share; it used a small space ad with a toll-free number to sell pewter salt-and-pepper shakers.

Then in 1981 Darrell Ross, Sidney and Lillian Ross’ son who had joined the business in the 1970s, spearheaded the launch of the Ross-Simons mail-order catalog.

Eighteen years later, Ross-Simons mails its print catalogs every week—for a total of over 60 million catalogs a year. It has more than three million customers in its file who buy from one of its 12 catalog titles, including:

• the Ross-Simons flagship book of fine jewelry, tableware, china, collectibles and gifts, which mails four times a year;

• the Ross-Simons Gift and Home Collection, which mails three times a year;

• the Sale Book, which mails in the first and third quarter; and

• the Best of the Best collection of best-selling items, which mails in the second and fourth quarters.

“We also tried a stand-alone Furniture Catalog this year [in 1998] but don’t have plans to do that again,” Howard notes.

Horchow, Neiman Marcus, Tiffany’s, Bloomingdales by Mail and other luxury goods purveyors are its primary competitors, as well as some lower-end home goods catalogers and the Irish home and collectibles catalogers like Cash’s.

Traditional Prospecting Media

Typical Ross-Simons customers are college-educated, married homeowners, age 35 and up, with household incomes exceeding $75,000 a year. To find more “like” customers, Ross-Simons uses the following traditional prospecting media:

• catalog mailings—of its flagship catalog to wonderfully performing lists and of smaller, sale books to other prospect lists, as well as limited solo mailings including its bridal kit which is sent to brides to tell them how to sign up with its bridal registry.

• space advertising—in newspaper/magazine catalog request sections.

Further explaining Ross-Simons’ direct mail strategy, Howard says, “We mail competitor lists and other upscale catalog buyer lists, and we participate in all of the catalog co-ops like Abacus and SmartBase.”

Versionalized Production Strategies

Depending on the list it is mailing to and whether it’s a prospect or customer mailing, Ross-Simons does some production-based versionalizing to its catalogs. As Pete Howard explains it: “We do some ... free-shipping wraps or adding dot whacks to certain list segments. We also use selectronic binding to insert supplements to certain catalog recipients, for instance adding a jewelry supplement.” R.R. Donnelley & Sons is the cataloger’s primary printer.

All Ross-Simons’ catalog creative, from concept and copywriting through design and layout, is handled in-house. For photography—including the shots of famous cover models like Faye Dunaway—Ross-Simons uses outside freelance photographers.

Challenges for Print Catalog

Howard says that the greatest challenge faced by the print catalog business is increasing competition for the consumer dollar. “Consumers have more options today. And consumers have rising expectations of service,” he explains. “Whereas they once expected orders in a couple of weeks, now they want delivery in a couple of days—or the next day.” For this reason, Ross-Simons surveys customers twice a year regarding service issues and expectations.

Another major challenge is cost control, Howard says. “Costs for paper and postage keep rising, so we’re always looking for ways to become more efficient and to cut waste.” For instance, Howard says, “recently, we dropped a lot of print advertising in newspapers and magazines in favor of online advertising.” Why the shift? “Unless you have solo product offers like the Franklin Mint does, it’s difficult to use that type of space advertising effectively.”

Plus, he adds, “We’ve found that requests are converting to sales better from Web-based sources.”

Conservative BEGINNINGS Online

The convergence of two factors—a need to “keep up with the Joneses” and all of the cost pressures faced by its print catalog—made Ross-Simons take a serious look at creating a Web-based catalog in 1997.

Still, they knew from the outset that theirs would be a slow-but-sure undertaking and not a case of jumping in with both feet at the start. “As a conservative company, we were concerned about things like security and consumer privacy. We didn’t want to risk a disaster,” says Howard.

Bill Bender, president of Online Development Corp. (ODC), the Waltham, MA, company that worked with Ross-Simons to develop its site, recalls, “We spent two or three months discussing strategic issues before we made a move.” This step was key, says Bender, who adds, “The premise is very important at the outset. You need to determine what the ROI goals will be.”

Ross-Simons’ management had what Bender calls a “mid-range goal”: to be as aggressive as they could be without a huge loss.

The company has been pleased with traffic and sales figures so far: As of last December, year-to-date Internet sales had jumped 400 percent over the same period the prior year, and in one week in December topped out at $186,000. Darrell Ross, president of Ross-Simons, points to a significant milestone the company reached on Dec. 1, 1998, noting that “On that day, Internet sales exceeded through-the-mail sales for the first time since www.ross-simons.com was launched.”

Getting Up and Running

ODC worked closely with Ross-Simons to develop a professional looking, properly functioning and easy-to-navigate Web site. The site, www.ross-simons.com, began taking orders in July of 1997.

Getting things working on the site was an iterative process, Bender says, pointing out that a cooperative effort led to the realization that “sequencing was very important,” as was functionality. “Due to the breadth of merchandise Ross-Simons offers, we had to give shoppers multiple ways to search and to browse—by price, by product category, by manufacturer.”

Structurally, the Ross-Simons site is broken up into four major areas:

• Bridal Registry

• To Order from a Print Catalog

• To Browse/Shop Online

• Information about Ross-Simons

When you browse the site, the ease with which you can move from one area to another and back again make it obvious how much attention was paid to making it truly functional. Catalog covers are displayed prominently on the home page and throughout the site, keeping a strong tie between the print and Web catalogs.

“It ain’t as easy as it looks,” Howard says of developing a user-friendly Web store. “To make it look easy and seamless to the shopper takes a lot of thought and work. We’ve learned that nothing is automatic.”

Another key to the site’s flow is its simple grid format. Product copy and accompanying thumbnail photos sit side-by-side in small, vertically stacked boxes that the shopper can view by scrolling. Click on one to get an enlarged version of that product photo and description.

This type of Web page configuration makes updating the site easier too, Bender says. Catalog images are downloaded on a batch basis after each new print catalog is produced. “Some cropping may need to be done manually to make the images fit the Web page configurations. However, the system automatically adopts each page to whether or not an image will be used,” he explains.

Any SKU or pricing updates are made automatically on a daily basis. An internal Web site coordinator at Ross-Simons handles those updates.

On the back-end, orders are confirmed by e-mail immediately. The company is in the process of upgrading its server to enable real-time order verification and allow buyers to check order status online. Order status hook-up will have up to a day delay.

1999 and Beyond

As of late 1998, Ross-Simons’ staff was being trained to take over managing the Web site from ODC. “IS has to become Web-savvy, as will customer service and creative,” Howard explains.

ODC will still be a partner with Ross-Simons for any major programming changes and for analysis of its database of Web-based information. As Bender notes, “Massive marketing databases are being created with online data. We need to now learn how to use that information—for instance, looking for data correlations such as what percentage of visitors stay and click to certain pages based on where they came in from.”

As for what else lies ahead, Howard says the Web is vast with potential. “With the ability that technology gives us to do faster, more frequent updates comes the desire to do more—and that means more work.” He adds, “Ironically, it opens up a whole new world of everything we didn’t know!”

Ross-Simons is in the early stages of doing e-mail promotions to customers. During National Online Shopping Week, for instance, it e-mailed a free shipping offer to 30,000 people who had bought or requested catalogs through the site. The promotion was very successful, Howard says. He quips: “You thought direct response was fast-paced. This is light speed.”

Millard Group, Ross-Simons’ list manager, is handling the opt-in e-mail list and working with Message Media (formerly First Virtual) to create more e-mail promotions this year.

Now that the site is functioning well and generating some sales, Ross-Simons is ready to give it more play in the print catalog this year. “We plan to step up the number of mentions of the Web address from just a few to where they will almost equal those of the 800 number,” says Howard.

This year should also mean more improvements to the site. “We want to do more to the extent that we can without going overboard. We have to,” Howard explains, “in order to look competitive with the marketers who have armies of people—their entire staffs—devoted to the Web compared to a few people working the site part time. It’s a delicate balancing act.”

Ingredients of a Successful Web Catalog

Jeff Bezos of Amazon.com told me several years ago that his Web-based site would never be able to replicate the feel of a real bookstore, with its wafting aroma of cappuccino and the crisp potential of unturned pages. Despite the success of his own venture and of many paper-and-postage catalogers and bricks-and-mortar retailers who followed him online, Bezos was right.

Today’s best commerce sites don’t try to replicate the retail experience, but try to capture something else entirely. Catalogers are among the businesses that are best equipped to extend their business to the Internet. After all, the Web is not really an extension of a mall or television broadcast but of the printed page. Based on a survey of the most talked about, most trafficked, most (nearly) profitable Web sites, the following are ingredients that successful Web catalogs have in common.

An established brand name. Most of today’s successful catalogers have jumpstarted their Web business by leveraging a strong existing brand name, either from a print catalog (Land’s End (www.landsend.com), Omaha Steaks (www.omahasteaks.com) or retail store (Gap(www.gap.com), Barnes & Noble (www.barnesandnoble.com). While it’s possible to build a Web-only brand name, the required cross-media promotions (such as those undertaken by Amazon.com and CDnow) are so expensive that profitability is still a distant goal for most Web-only retailers.

Strong customer service Buyers need assurance that problems or questions will be corrected, especially since the Web is otherwise faceless. MicroWarehouse (www.warehouse.com) does a good job of integrating telephone reps with the Web, in addition to providing a thorough FAQ and reliable e-mail assistance. The Web also can be an alternative information and customer service channel for existing customers. For example, New Pig (www.newpig.com) allows registered customers greater access to information, prices and their accounts.

Frequent specials and discounts. Substantial discounts can overcome the barriers that some shoppers have to purchasing online, and, since price comparison is a simple matter on the Web, the best price will often win when it comes to commodities. Even among unique brand names, online discounts are traffic builders and sales motivators. Actively promoted specials can yield even bigger results—even too big if the site isn’t equipped for bursts of heavy traffic. For example, an e-mail promotion of J. Crew’s (www.jcrew.com) October Clearance caused such heavy traffic that the site turned shoppers away. By the time traffic had eased, much of the clearance stock was gone.

Additional editorial. The much talked-about “magalog” may be an alternative format for print catalogs, but it’s the standard for the Web. Because the Internet developed first as a medium for information exchange, and second as a commercial channel, many browsers visit sites looking for information. The cataloger’s mission is to attract these info-seekers and convert them into buyers with good merchandising. For example, extensive gardening and horticulture how-tos at Garden Escape (www.garden.com) bring research-seeking gardeners to the site; then specials woo them to buy.

Effective use of interactivity. Some interactive features (such as Gap’s virtual paper dolls) are designed as toys to attract surfers to a site, while others are effective upselling mechanisms. For example, the interactive garden-planning software on the Garden Escape site creates a powerful temptation to make a dream garden reality by ordering the requisite plants with a single click.

Consistent brand identity and marketing integration. While some of the high-tech features designed to link CSRs and Web sites are not yet in common use, the best sites display consistency and integration between the products they offer and the media they use. For example, Martha Stewart Living’s site (www.marthastewart.com) blends information about Martha-by-Mail along with her books, magazine and TV show.

Easy browsability as well as searchability. Web sites must be easily browsable by several different criteria, and file sizes should be manageable for dial-up users. The last thing online catalogers want to do is bore potential buyers with long download times so that they log off without buying.

Thorough product descriptions. Potential buyers can’t see, touch or smell the product, but they should know exactly what they’re getting. The Avon site (www.avon.com) does an exemplary job by not only listing the touted benefits of each skin care product, but enumerating the entire ingredient list—a wonderful example of truth-in-advertising for the cosmetic industry.

Assurance of secure shopping. Several seals or accreditation systems (such as BBDO, Excite Secure Shopping Seal, Compuserve Certified Shopping) are competing to become the standard that imparts instant credibility to an e-commerce site, just as the Good Housekeeping Seal of Approval has done in print ads. Until there is one standard, Web sites must provide their own clear statements of security and fraud-protection measures to allay the fears of new online shoppers.

ROSS-SIMONS FACTS

Headquarters: Cranston, RI

Company founded: 1952

President: Darrell Ross

Catalog launched: 1981

1998 Sales: $200 million+

Employees: 900

Retail stores: 9 locations in 6 states

Fulfillment center: 100,000-square-foot facility in Cranston, RI

Catalog printer: R.R. Donnelley & Sons

List manager: Millard Group

Web site [www.ross-simons.com] launched: December 1996

Web site creator: Online Development Corp.