real Goods Trading Corp., a DMer of environmentally sound products, is shifting its focus to the Web.
“We don’t see the catalog industry – or at least our segment of it – growing significantly in the next few years,” says Mark Swedlund, president of the Santa Rosa, CA-based company. “We’re putting the bulk of our new resources into the Internet.” That means the firm’s print catalogs, 5 million of which are mailed each year, will be used primarily to generate Web site traffic and online orders, and that their budgets will remain flat.
However, online budgets will grow. “The new model for will be clicks and print,” Swedlund says. About 10% of the firm’s sales were from the Internet in 1999, up from 3% in 1998 and 1% in 1997. In the four years since the start of Real Goods’ Web site (www.realgoods.com), the Internet has emerged as the company’s biggest source of new customers. Real Goods has also found that many customers who receive print catalogs prefer to place orders online, rather than by phone or mail. For other customers the catalog functions more as advertising to generate online Web site traffic.
The firm’s new growth strategy also includes setting up partnerships with other Internet marketers and establishing online links to other sites. Real Goods has formed three marketing partnerships and established more than 5,100 links to other sites. The links or affiliations were arranged by Linkshare.com, an Internet company that establishes and maintains Web site links for advertisers.
Real Goods is seeking marketing partnerships with groups that target similar consumers – those sharing an interest in environmentally sustainable lifestyles. It recently entered agreements with ShopForChange. com, a charity formed by Working Assets, and with Wholepeople.com, the online division of the Whole Foods Markets supermarket chain. Another partner is electricity reseller Greenmountain.com
The partners promote each other’s sites, share e-mail addresses and provide access to their customer or member databases. As with a conventional direct mail list, names and e-mail addresses are only transferred among partners when an order is placed or some other kind of response is generated. “If someone just surfs through our partner’s Web site we don’t get the name,” says John Dennen, director of e-commerce at Real Goods. “They must sign up for a catalog, send an e-mail or call.”
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