Imagine getting invaluable customer feedback on your products. “I like them but they need to be a little wider around the legs…Like totally drek and like totally no way in the world…Soooooo last year.” Now imagine this research is delivered free for the asking on every item you show to your catalog readers, with fresh observations posted every day.
That’s what online teen catalog Alloy (www.alloy.com), gets from a page on its Web site entitled “Dig or Dis.” Like much of the catalog, the page is a forum for personal expression for people ages 10 to 24.
Alloy Online Inc. CEO Matthew Diamond calls the site a community. And this spirit is promoted in areas of the site such as chat rooms, “Ask Fiona” and “Ask Tucker” advice columns where readers post advice along with the columnists, “Weird Dream of the Day” and “Trend of the Day” where kids nationwide compare notes about style (or, usually, lack of it) in their hometowns.
The catalog is a click away and sale notices are sprinkled about, but it’s the interaction-such as the postings on reflector pants quoted above- that have drawn 470,000 Generation Y girls and boys to register as members since the catalog launched in August 1997, Diamond says.
“They want community,” Diamond explains. “They want a place to hang out with their friends. It allows them to be [in] all the areas where they can chat with each other. We consider most of what goes on the Web [site] to be entertainment.”
Members get a weekly e-zine and aren’t required to order anything. Alloy gets their registration information for the database: name, address, date of birth and e-mail address if they are requesting a catalog; just the e-mail address if they are requesting the e-zine. Teens 13 and younger are not allowed to register.
A squad of eight “cool hunters” tool around teen hot-spots nationwide, dishing what’s hip on their return. “We’re not in the business of figuring out what is the next big trend,” Diamond explains about the Alloy brand, a colorful mix of T-shirts, bottoms and accessories with youth-specific logos and graphics. “We want to sell teens what they want. We stop short of saying we predict fashion because we don’t.”
Although New York-based Alloy is decidedly an Internet project, Diamond and partner, COO James Johnson, realized that the novelty of the idea would not be enough to build and sustain a customer base. They produce a paper catalog as an “advertising vehicle,” Diamond says, because they realized that “we’d spend a lot of money to get a catalog out, but it was either that, or spend a lot of money on TV, radio or banner ads online. It proved to be the most cost-effective means to drive people to the Web site,” he adds.
The paper book has grown from a 24-page pamphlet to a 60-page, full-color glossy mailed out twice a season. Some 10 million catalogs went out in 1998 to Web site registrants and a “limited” number of names from outside lists. The average sale is between $70 and $80.
The paper catalog touts the Web site loudly and often. The cover of the recent spring break issue, for example, is devoted to alloy.com happenings and sales. A portion of many pages inside offer a $10 discount for ordering online, and pushes events like online movie previews and virtual makeovers.
All the merchandise (apparel and accessories) in the paper version is on the Web site as well, but the e-catalog also sells entertainment products.
The catalog-feeds-Web-site model is sound, Diamond says, but admits “the majority of the revenue still comes from the paper catalog.”
The company has come a long way from its start-up days when Diamond was at Harvard Business School and ran the business from his basement apartment, hanging racks for inventory in the kitchen. He says the growth is exemplified by Alloy’s recent filing with the Securities and Exchange Commission to go public. But a cash infusion from investors would surely help test the model and bolster the growing company.
Since the teens are online, “the market continues to shift online. So we’re going to watch it shift from the paper to the Internet. And we think [the shift is] going to go faster than it has.”
With a nod to Delia’s catalog, the teen-market leader, Diamond declares, “What makes us unique is, this is a huge market and not many people are in it. Kids want anything. They are online and say, ‘Yes, send me a catalog.'”
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