SPECIALTY STORES USED TO live on foot traffic, but today that’s not enough. Retailers need a leg up from things like private-label credit cards and brand advertising to get customers in the door.
At the Direct Marketing Association’s Catalog on the Road Conference in Cambridge, MA last month, Richard E. Jaffe, managing director of consumer group equity research at Legg Mason Wood Walker Inc., said specialty retailers are using direct tools as well to connect with consumers.
Most retailers’ direct sales come from the Internet. Urban Outfitters, which targets teens, gets about 90% of such business from the Web. And even Talbots, whose typical customer is in her 50s, does 60% of its direct sales in cyberspace.
Victoria’s Secret has been successful in its direct endeavors despite keeping them almost completely separate from the retail end. Jaffe said the lingerie marketer recently cited the fact that half its catalog offerings could be found at retail as a victory. That’s great, he said, except it still leaves shoppers disappointed when they try to find the other half of the catalog’s stock in stores.
The Gap has put a lot of attention into direct this year. It shunned television for a sharply targeted magalog promotion, which didn’t pan out quite as well as the clothing chain hoped.
Seventy-five percent of The Gap’s shortfall was attributable to the product mix. “But good marketing could make a difference,” Jaffe said. He added that he doesn’t expect the retailer to go back into TV advertising until it gets the clothing selection right.
Limited Too also is using a magalog approach to target its audience, “tween” girls ages 7 to 12. The problem is that because the audience moves out of the target demographic so quickly, the last-12-month file is good for only 14 months at best, he said. And since lists of 11-year-old girls aren’t exactly available, the challenge is to capture moms’ names at the point of sale.
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