When Christian Feuer left his wife’s side two days after their third child was born to travel from the East Coast to Downers Grove, IL, it was to tackle an impossible task. As vice president of marketing and advertising production, his mandate was to revive the troubled Spiegel catalog.
Between 1995 and 1998, sales had dropped from $1.17 billion to less than $587 million. Circulation was down from 154 million in 1997 to 112 million by that October day in 1998, in large part due to company-initiated belt-tightening measures.
Feuer wasted no time. Gathering the merchandising, marketing, planning and control teams around a huge table, they ripped up the existing plan for 1999. “It was like a little war room,” Feuer recalls.
A primary goal was to refine the firm’s prospecting. Gina Valentino, Spiegel’s customer development director, homed in on what magazines would perform best for the space ad campaign. Publications like Harper’s Bazaar, Better Homes and Gardens, and Glamour fit the Spiegel woman, who is a college-educated, 40ish, working mother. The ads offered the big book plus a $5 coupon and a free tote bag – all for a cost of $5. By last fall, paid catalog requests increased 64% over fall 1998, and conversion was solid.
It was also determined that the 512-page big book needed to be streamlined, so Melissa Payner, Spiegel’s vice president of merchandising and creative advertising, took over that chore. The Spiegel woman had become more casual and family oriented, so high-end and sale products were eliminated, and one casual style was shown throughout.
Another decision was to delve into the inactive file. Spiegel launched two activation catalogs filled with the best-selling products from the big book and sent it to inactive customers – some of whom hadn’t ordered in 30 months. The response was so good that by fall, it was mailing five activation books. The same best-of-Spiegel catalogs, which averaged less than 100 pages, were also sent to proven catalog buyers from the same lists Spiegel had used in the past.
In 1999, the group tested specialty catalogs against how they had performed the year before. On View, which had featured apparel and home decor, was split into two separate books. The home catalog has done best at activating old customers and may be applied to prospecting in 2000, says Payner.
Three new concepts tested in fall 1999 and winter 2000 did so well that they have been rolled out in spring 2000. Spiegel Life, with its playful, more casual attire, has brought in or activated customers whose average age is 33. The Kid’s Resource, with wares for children, and a Large-Size catalog that presents all Spiegel’s large-size items in one book, are delivering beyond expectations. In all, the number of specialty books grew from 10 to 13.
In addition, the majority of visitors to the Web site (www.spiegel.com), which was redesigned in fall 1999, have become customers.
By late last year, the turnaround was rolling along. New customers poured in from all channels, increasing by 60% last fall compared with fall 1998.
Recovery has not ceased. Circulation has climbed from 112 million to 129 million. A financial report from the Spiegel Group, which also includes Eddie Bauer and Newport News, says the company had record first quarter 2000 earnings of $20.2 million.
“New customers, existing base and media – when those three components are working and there’s a lot of momentum behind all three,” says Valentino, “it’s amazing what happens.”
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