6Trends - Nxtbook Media
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6Trends - Nxtbook Media
WEBSITE CRITIQUE P.14 / CONTACT STRATEGIES P.28 / REGIONAL PARCEL CARRIERS P.36 MULTICHANNEL APR MERCHANT ’11 ® 6 INTEGRATING. SELLING. DELIVERING. WWW.MULTICHANNELMERCHANT.COM Trends for 2011 A PENTON MEDIA PUBLICATION A peek into our exclusive Outlook industry research results P.30 REACH MORE. SELL MORE. “While our online sales are growing, our metrics show that print is driving the growth.“ Jeffrey Nichols, senior manager, creative services HD Supply In this multi-channel world, print does what no other medium can do. Smart catalogers like Jeffrey Nichols know it has the power to drive sales online, in store, by mail and by phone. Request our free kit to find the perfect paper for your next print project. Go to NewPageReachSell.com /mcm 8540 Gander Creek Drive | Miamisburg, OH 45342 | 877.855.7243 ©2011 NewPage Corporation Illustration: Michael Austin MCM APR ’11 30/ Six trends for 2011 Our Outlook 2011 research study reveals what multichannel merchants are doing—or, as is often the case, not doing NEWS 7|Swiss Colony parent acquires Wisconsin Harry & David bring in turnaround pro/The troubled food/gifts mailer has hired Kay Hong, a global turnaround specialist Delia’s on the selling block/The struggling teen girls apparel cataloger/retailer is reportedly looking to be acquired 9|NEMOA COVERAGE NEMOA panel sprouts Cheeseman/The multititle mailer paid $550,000 for a “smaller clone” of Swiss Colony Shareholders approve J. Crew deal/It took four months, but affiliates of TPG Capital and Leonard Green & Partners finally acquire J. Crew 8|Oriental Trading exits bankruptcy/The gifts award-winning advice/Judges from the 2011 MCM Awards share what they have learned from this year’s entries Giving people a reason to “Like” you on Facebook/What a few merchants are doing to encourage customers to become fans socially merchant has eliminated 70% of its debt and has Mobile apps push may be softening/Why some marketers are shying away from creating apps invested in a new marketing database The deal on Chapter 11 prepacks/Financial experts provide some insight as to why more companies are doing prepackaged bankruptcies 28/ 10|POSTAL New PMG brings refreshing change to the USPS/The president of the ACMA offers his take on the Postal Service’s Patrick Donahoe MULTICHANNELMERCHANT.COM / APRIL 2011 41/ p.38 Editor-in-Chief Melissa Dowling, melissa.dowling@penton.com SeniorWriter Tim Parry, tim.parry@penton.com SeniorWriter Jim Tierney, jim.tierney@penton.com CHanneLs 12|eCommerCe SEO and replatforming/ 28|Lists & dAtA strAteGies Is your A website overhaul can have a detrimental effect on search if you’re not careful contact strategy in crisis?/Five warning signs that your marketing needs work 14|Website critique: Polishing a pewter 34|operAtions & fuLfiLLment EditoratLarge Sherry Chiger, sherry.chiger@penton.com ContributingWriters Amy Africa, Curt Barry, Larry Becker, Lois Brayfield, Liz Kislik, Herschell Gordon Lewis, Ernie Schell, Stephan Spencer, Andrea Syverson, Gina Valentino CopyEditor Debbie Schwab, debbie.schwab@penton.com GroupArtDirector Katherine DiMarco, kate.dimarco@penton.com merchant’s site/A review of AmosPewter.com Packaging options abound/Some of the new and noteworthy products for protecting 19|Mobile coupons: physical vs. cloud/Two products in transit strategies for mobile couponing 36|A look at regional 21|Five keys to mobile-ready email design/ parcel carriers/How How to make your emails more readable on regional delivery providers can a mobile device supplement the 23|CAtALoG Seven little words/Why smart service of FedEx and UPS copywriters avoid these words 38|How to leverage barcode technology/ 24|Paper update: Look for paper prices to Most merchants are only scratching the keep going up/It’s a done deal that we’ll see surface of what barcoding can do for their prices increase in the second quarter—and warehouse operations they may continue to go up 41|B-to-G Should you be selling to the 26|mArKetinG The real undercover boss/ government now?/An expert provides Developing a truly customer-centric brand an update on targeting the potentially lucrative B-to-G market checklist to improve your service departments reader serVICes 5|editor’s note Major missed 42|mArKetpLACe opportunities 48|BACKWord MCM Awards Finalists 46|CLAssifieds GroupPublisher Leslie C. Bacon, leslie.bacon@penton.com SalesandMarketingSpecialists William Camaraza, william.camaraza@penton.com Candice Hadley, candice.hadley@penton.com Elizabeth O’Connor, elizabeth.oconnor@penton.com ProductionCoordinator Lauren Loya, lauren.loya@penton.com SeniorAudienceDevelopmentDirector Jennifer Shumar, jennifer.shumar@penton.com AudienceMarketingManager Diane Sontag, diane.sontag@penton.com ClassifiedProductionCoordinator Michael Penelton, michael.penelton@penton.com ResourceSalesAssociate Cynthia Foristel, cynthia.foristel@penton.com ListRental Marie Briganti, marie.briganti@meritdirect.com Reprints/PermissionSales Traci Mueller, traci.mueller@penton.com ChiefExecutiveOfficer Sharon Rowlands, sharon.rowlands@penton.com ChiefFinancialOfficer Nicola Allais, nicola.allais@penton.com Penton Media Marketing Division serves the marketing and media industries with publications that include Multichannel Merchant, Direct, Promo, and Corporate Meetings & Incentives. 47|Ad indeX Multichannel Merchant®, Volume 7, Issue 3 (ISSN 1554-8961, USPS 718-630), is published monthly in Feb, Mar, Apr, May, Jun, Sept, Oct, Nov and Bi-monthly in July/Aug and Dec/Jan by Penton Media, Inc., 9800 Metcalf Ave., Overland Park, KS 66212-2216. 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SeniorVicePresident Dan Bagan, dan.bagan@penton.com 11 River Bend Dr. So./Box 4949/Stamford CT 06907-0949 Phone: 203-358-9900 • FAX: 203-358-5821 Corporate: 249 West 17th Street, New York, NY 10011 Phone: 212-206-3622 • www.penton.com Privacy Policy: Penton Media, Inc. makes portions of our magazine subscriber lists available to carefully screened companies that offer products and services directly related to the industries we cover. Any subscriber who does not want to receive mailings from third-party companies should contact the subscriber service department at 866-505-7173 (US), 847-763-9504 (outside US). © 2011 A Penton Media Publication. All Rights Reserved. Subscription problems/questions: Phone: 866-505-7173 Fax: 402-293-0741 MULTICHANNELMERCHANT.COM/APRIL2011 PrintedintheU.S.A. Redefining B-to-B Direct Marketing OmniChannelBASE: n 1. infinite possibilities, one database. Omni ChannelBASE OmniChannelBASE is an innovative new multi-channel database from the leader in database marketing—MeritDirect. It brings together robust and responsive market-leading data from prestigious publishers, catalogers, online merchants and other leading direct marketers in one marketer-friendly database. The database offers marketers an enormous reach covering all areas of business—while maintaining rich data selects that allow you to target your audience. 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Corporate Headquarters: 333 Westchester Avenue • White Plains, New York 10604 • PH: 914.368.1000 FX: 914.368.1150 • www.meritdirect.com Services: • List Management • List Brokerage • Interactive Services • Marketing Databases • Strategic Services D:DC@M<:FE=<I<E:<8N8I;J D8P*$+s;@>@K8CJ8E;9FOsE<NPFIB:@KP I\n`i\pfliYlj`e\jj n`k_`ej`^_kj]ifdk_\Y\jk 8gi\d`\i\XnXi[j#\[lZXk`feXe[e\knfib`e^\m\ekkf_\cg dlck`Z_Xee\cd\iZ_XekjeXm`^Xk\k_\e\nX^\f]i\kX`c`e^ Af`ek_\jkX]]f]Dlck`Z_Xee\cD\iZ_XekXe[Xc`d`k\[ifjk\if](),\o\Zlk`m\j]ifdfec`e\Xe[ZXkXcf^i\kX`cZfdgXe`\j u XZifjjk_\Zflekip]fik_`j\oZclj`m\#_`^_$c\m\cZfe]\i\eZ\%K_\X^\e[X`eZcl[\jXeXnXi[jcleZ_\fekfgi\j\ekXe[ _fefik_\n`ee\ijf]k_\)'((D:D8nXi[j#Xjn\ccXjjkiXk\^`Zj\jj`fejk_Xkgifm`[\XZk`feXYc\#]finXi[$k_`eb`e^jfclk`fej kfZfdgc\o#Zifjj$Z_Xee\cZ_Xcc\e^\jpfl]XZ\kf[Xp% <c\d\ekjXe[]leZk`feXc`kppflin\Yj`k\_Xjkf_Xm\ kf[XpÇfi\cj\ ?fnkfdXb\jfZ`Xcd\[`XXi\m\el\$[i`m`e^#`ek\^iXk\[ Zfdgfe\ek`epfliYlj`e\jj ?fnkf[i`m\\e^X^\d\ek`ek_\dfY`c\Z_Xee\c @eZfigfiXk`e^jfZ`XcXe[`ek\iXZk`m\\c\d\ekj`ekfgi`ekZXkXcf^j ?fnkfc\m\iX^\m`[\fXe[fk_\ifec`e\k\Z_efcf^p 8e[dlZ_dfi\ Ç u PflXcjf^\k\og\ik$[i`m\ekXb\XnXpj#k`gjXe[k\Z_e`hl\jk_`jp\XiËjD:D8nXi[n`ee\ijlj\[kf[i`m\Ylj`e\jjjlZZ\jj Xe[k_\i\ËjXdgc\e\knfib`e^k`d\Yl`ck`ekfk_\X^\e[Xkf\oZ_Xe^\`[\Xj#[\YXk\k\Z_efcf^`\jXe[[`jZljjjfclk`fej n`k_g\\ij]ifddlck`Z_Xee\cd\iZ_Xekjf]Xccj`q\jXe[m\ik`ZXcdXib\kj% JG8:<@JC@D@K<; KF(),8KK<E;<<J! Lj\Zf G8(kf [\ jXm\ ,' M@<NK?< 8><E;88E; F I<>@JK<IKF;8P nnn%dlck`Z_Xee\cd\iZ_Xek%Zfd& dZdc`m\ Dlck`Z_Xee\cD\iZ_Xek`jk_\fecpi\jfliZ\ k_Xkj_Xi\jpflig\ijg\Zk`m\ÇXe`ek\^iXk\[ m`\nf]XccZ_Xee\cj#n`k__fc`jk`ZjkiXk\^p Xe[Zljkfd\i`ej`^_kj%Fli\og\ikjXe[ Z Zfeki`Ylkfij_\cgpfleXm`^Xk\k_\\mfcm`e^Z_Xcc\e^\jf]pfli[peXd`Z d dlck`Z_Xee\cYlj`e\jj Ç]ifdg`egf`ek`e^Zljkfd\idXkZ_YXZbjkf[i`m`e^ i i\m\el\m`XjfZ`Xcd\[`X#[\m\cfg`e^Ylj`e\jjZfek`el`kpgcXejkfk_i`m`e^ n`k_]cXnc\jjcf^`jk`Zj#Zi\Xk`e^Zfdg\cc`e^dfY`c\Zfek\ekkf]`e[`e^ i\jfliZ\]lcZXkXcf^[\j`^ejfclk`fej%KLIEKFDLCK@:?8EE<CD<I:?8EK KF=@E;JL::<JJ8:IFJJ8CC:?8EE<CJ% !8kk\e[XeZ\`jc`d`k\[kf\o\Zlk`m\jn_fnfib]fidlck`Z_Xee\cd\iZ_Xekj#i\kX`c\ijXe[ZXkXcf^ZfdgXe`\j% editor’s note Major missed opportunities Direct merchants, particularly those with roots in the catalog channel, aren’t exactly known for being among the first to embrace ecommerce and other technology. But the results from our Outlook 2011 research survey were shocking in revealing all the things that marketers aren’t doing but should be. Here are four of them. Mobile. I knew multichannel merchants were a little slow to embrace mobile, but I had expected the percentage of respondents who were not involved in m-commerce to plummet from 79% last year. It did fall—but only to 74%. Yikes. Marketing to shopping cart abandoners. You’d think the way that marketing to cart abandoners can help salvage a sale would make it a highly important online strategy. But when asked to rate it on a scale of 1 to 10 (with 10 being the most important), marketing to cart abandoners had a mean score of 4.17. And that’s down from a 4.32 in 2010. What’s more, 61% of the total respondents do not market to people who have abandoned carts. This is actually up a percentage point from the 2010 survey. Yikes again. Live chat. Not only are just 17% of the total respondents using live chat, that’s fallen a percentage point from the 2010 survey. About a quarter of the larger respondents are using it—but still. Research has shown that live chat helps convert customers, so this statistic is pretty disappointing. I’d have said maybe more merchants will use it next year, but the percentage who aren’t currently using live chat but are considering it fell as well, from 28% last year to 25% in 2011. Trigger emails. The good news is that several merchants are using triggers. But any way you slice and dice the data, less that half of the respondents have a trigger email campaign. That’s leaving a lot of money on the table. On the upside, multichannel retailers are investing in ecommerce, they’re adding rich media and incorporating user-generated content. But they’re overlooking technology and tactics that would no doubt help them generate more revenue and, in many cases, save money. For a more detailed look at the survey results, you can download research reports for each area (catalogs, ecommerce websites, general marketing and operations and fulfillment) at Multichannelmerchant. com/outlook2011. For six trends that we’ve unearthed from the findings, turn to page 30. Melissa Dowling Editor-in-Chief MCM Outlook 2011: Key Trends In Multichannel Selling Exclusive research downloads COMPLIMENTARY TO SUBSCRIBERS from the editors of Multichannel Merchant Now that we’re finally pulling out of the recession, multichannel merchants are looking to seize the moment when consumer and corporate spending finally loosens up. New research now available from our editors shows how they are planning to do this. 2011 MARKETING OUTLOOK REPORT Sponsored by • Hiring and investments planned for 2011 • Essential marketing metrics • How merchants are using email campaigns • Plans for loyalty programs • Profitability and revenue expectations for the coming year 2011 CATALOG OUTLOOK REPORT Sponsored by • Changes in catalog creative and production • Circulation strategies for the next 12 months • Alternative print formats merchants are testing • How catalogers are using co-op databases • Interest in print personalization 2011 E-COMMERCE OUTLOOK REPORT Sponsored by • How merchants are going mobile • Social media strategies and measurements • Site redesign plans and goals • Search engine optimization tactics • Alternative payment options 2011 OPERATIONS & FULFILLMENT OUTLOOK REPORT • IT spending for 2011 • Distribution center software—what merchants have, what they want • Channel ordering trends • Parcel carrier preferences • Contact center technology Download reports at our Website www.multichannelmerchant.com/outlook2011 MULTICHANNELMERCHANT.COM/APRIL2011 5 MCM/NEWS SWISS COLONY PARENT ACQUIRES WISCONSIN CHEESEMAN DISTRESSED FOOD GIFTS MERCHANT WISCONSIN CHEESEMAN was snapped up by Swiss Colony parent company Colony Brands last month. TheDaneCounty(Wisconsin)CircuitCourt approved the sale of Wisconsin Cheeseman from parent firm Wisconsin Food Gift Co. to Colony Brands on March 7 for $550,000, according to court documents. The acquisition includes the brands, assets and inventories of Wisconsin Cheeseman. According to Wisconsin Chapter 128 paperwork filed with the Dane County Circuit Court, Wisconsin Food Gift owes $110,000 to Jim’s Cheese Pantry, $37,000 to Dynamic Print Group and $27,000 to Uline Shipping Supplies. Chapter 128 is not considered bankruptcy under Wisconsin state laws, but it declares a company or person to be “insolvent.” Under Wisconsin’s Chapter 128 laws, a petitioner has three years to pay off its creditors. This is done through a courtappointed trustee, and on a monthly basis. Colony Brands president/CEO John Baumann sees Wisconsin Cheeseman as a “smaller clone” of Swiss Colony. Like Wisconsin Cheeseman, Swiss Colony has a history in the food and gifts business. So the acquisition “should fit us like a glove,” he says. “And it gives us additional volume in our cheese operation.” Baumann notes that the Wisconsin Cheeseman buyer file is not that big (its 12-month buyer file has just 71,572 names, with a $70 average order value), “but it’s one we think we can build profitably. According to its data card, Swiss Colony has 1.7 million 12-month buyers who spend an average of $95 per transaction. For now, it will be status quo for Wisconsin Cheeseman, Baumann says. “We’ll keep the catalog on schedule and try to do some testing,” he says. It will hold the circ to what it was in 2010,” and there won’t be significant branding or merchandising changes. For the longer term, Baumann notes, “we’ll see if we can grow the business because there are reasonable amounts of synergies between the two files.” Tony Cox, president of food catalog consultancy 5th Food Group, says Colony Brands should make back its investment in no time. Colony already has the infrastructure and management team to support this add-on business, “so they get the sales boost with little or no increase in their fixed costs or overhead.”—TIM PARRY AND JIM TIERNEY DIVESTITURE: DELIA’S ON THE SELLING BLOCK TEEN GIRLS APPAREL CATALOGER/ RETAILER DELIA’S HAS PUT ITSELF UP FOR SALE. According to published reports, the company, which has a market value of about $60 million, has been soliciting interest from buyers. Why is Delia’s looking to sell? “Essentially, they have no choice,” says Stuart Rose, managing director for investment bank Tully & Holland. “Delia’s has $14 million cash on hand, and last year lost $11 million in EBITDA (earnings before interest, taxes, depreciation and amortization) and is trading below book value.” Delia’s, which has been struggling to keep pace in a depressed economy, hasn’t been profitable in recent years and “was just about breakeven” in 2006, Rose says. The merchant also hasn’t made any improvements in operating efficiency to bring costs under control, he adds. It doesn’t help that the teen market is crowded with competitors such as Aeropostale, Forever 21, Hot Topic, Tween Brands, Abercrombie & Fitch, Hollister, Nordstrom, Pacific Sunwear and Target. And it’s a tough target audience: Teenagers travel in packs, they’re fickle and demanding, Rose says. Bottom line, “Delia’s isn’t the fashion leader,” Rose says. “Something has to be done to right the ship and monetize the remaining value of Delia’s, because continuing on this path leads nowhere.” Delia’s had been acquired by teen apparel and sporting gear cataloger Alloy in 2003. It still operates the Alloy brand, but in 2008 it sold its extreme-sports gear merchant CCS to retail chain Foot Locker.—JT MULTICHANNELMERCHANT.COM / APRIL 2011 SHAREHOLDERS APPROVE J. CREW DEAL APPAREL CATALOGER/RETAILER J. CREW GROUP was finally acquired by funds affiliated with TPG Capital and Leonard Green & Partners for $43.50 per share in cash, or nearly $3 billion. Stockholders approved the merger with Chinos Holdings and Chinos Acquisition Corp. (affiliates of TPG Capital and Leonard Green & Partners), on March 1. The deal closed on March 7. Neil Stern, a retail analyst and senior partner for retail consultancy McMillan Doolittle, says recent private-equity buyouts of apparel cataloger/retailers suggest that some believe this sector to be undervalued on Wall Street. “Most specialty retailers struggled during the recession, with J. Crew being no exception,” Stern says. “Private ownership will allow them more strategic flexibility while being out of the public spotlight.”—JT 7 MCM/NEWS ORIENTAL TRADING EXITS bANKRuPTCy iT was a Happy valenTine’s day fOr OrienTal Trading cO.: The party supplies and novelties seller that day announced it had come out of bankruptcy. It had filed for Chapter 11 on Aug. 25 under the name OTC Holdings and on behalf of Oriental Trading, OTC Investors Corp., Fun Express and Oriental Trading Marketing. Harry & david bring in TurnarOund prO TrOubled fOOd gifTs mercHanT Harry & david Has brOugHT in a TurnarOund specialisT as iTs new ceO. Kay Hong, a managing director at global turnaround specialist firm Alvarez & Marsal, was appointed chief restructuring officer on Feb. 18, and will also serve as Harry & David’s interim CEO. Steven Heyer, who replaced Bill Williams as Harry & David’s CEO last February, will retain his position as chairman of the company. Hong served as an officer at Spiegel and Movie Gallery and as a financial adviser for Eddie Bauer Holdings, London Fog Group, Lululemon Athletica and the secured lenders of Legacy Estates Group. Can Harry & David be turned around? The company is facing an estimated $7 million interest payment on March 1 on its senior unsecured notes, and a substantial scheduled debt maturity in 2012 when its $58 million senior unsecured notes mature. “We believe that Harry & David’s current capital structure is unsustainable and that the company will seek to restructure its balance sheet,” Standard & Poor’s analyst Mariola Borysiak said in a report. “In our opinion, this could lead to a selective default or a filing for protection under Chapter 11.”—TP 8 The 79-year-old merchant, which throughout the restructuring maintained double-digit operating margins, has reduced its debt by nearly 70%, says its CEO Sam Taylor. And Oriental Trading, which had been owned by private equity firm The Carlyle Group, while Brentwood Associates held a minority ownership stake, has new owners. About 15 financial institutions comprise OTC’s new ownership, Taylor says, with no one retaining a majority stake. How did Oriental Trading come to have so much debt? The “go-go” years from 2005 to 2007 allowed some companies to add too much debt in financing acquisitions, says Stuart Rose, manag- ing director with investment bank Tully & Holland. “The bankruptcy puts the debt to equity ratio back in line,” Rose says. “While it doesn’t correct the fundamentals of sales and profits, it gives companies fighting and realistic chances for long-term growth.” Taylor says Oriental Trading is optimistic about the new ownership, “who got to know more about the business than ever before through the restructuring process.” What’s more, the company has invested in a state-of-the-art marketing database, “which will really help us going forward with email targeting, website content and our numerous catalog titles,” Taylor says. “It not only captures historical transactional data, but also behavioral data.”—TP/JT THE DEAL ON CHAPTER 11 PREPACKS gifTs and nOvelTies mercHanT OrienTal Trading cO. did iT in february. Multititle mailer Orchard Brands is scheduled to do it this month. Multichannel Merchant parent company Penton Media did it last year. what are they doing? Filing prepackaged bankruptcy plans and emerging from Chapter 11 in a short period of time. While prepackaged bankruptcies are not a new trend, says Craig Battle, managing director at investment bank Tucker Alexander, “you see more of them in recessions and challenging economic climates.” Companies with critical mass, operating cash flow and assets of value often choose “prepacks,” Battle notes. This approach recapitalizes the company at proper levels, with new debt and equity, “and by having it lined up in advance they are in and out of bankruptcy quicker.” When the lenders are owed large sums of money, and a sale of assets would not generate nearly what they are owed, they might opt for a prepackaged bankruptcy, says Lee Helman, managing director with investment firm Financo. “The lenders oftentimes will attempt to negotiate with all constituencies a deal in which they agree to wipe out a lot of debt in exchange for the lenders becoming substantial/significant or even complete owners of the business.” Changes to the bankruptcy law in 2008 shortened the available time for a company in bankruptcy, says David Solomon, co-CEO of investment firm Lazard Middle Market. This has led debtors “to try to get their ducks in a row before entering bankruptcy.” For companies with solid core businesses but too much debt, a prepack can result in less disruption, which preserves value through the bankruptcy process,” Solomon says. “That’s because a prepack is not only faster, but has much more certainty.” Solomon adds that prepackaged bankruptcies are typically more common when the capital structure is less complex “and there is less to argue about.”—JT MuLTICHANNELMERCHANT.COM / APRIL 2011 NEMOA COVERAGE NEMOA panel sprouts award-winning advice Giving people a reason to “Like” you on Facebook if you ask someone to “like” you on Facebook, will they do it? Some people will, but if you give someone an incentive to like you, you’ll have a better chance of grabbing that Facebooker’s attention. During a session at the NEMOA conference in Boston last month, Ken Burke, founder/chairman of ecommerce platform provider MarketLive, showed how some merchants are getting people to like them. Jockey, for instance, unlocks its Facebook page to nonfans when they choose to like the apparel brand. This access also enables the customer to learn more about Jockey. Sierra Trading Post does something a little more conventional: If you choose to like the discounted products merchant on Facebook, it will give you a discount off your next purchase. Kelly Goldsmith, ecommerce manager for Title Nine, described how a contest helped the women’s apparel merchant get 8,300 new Facebook likes during the second quarter of 2010. The company gave away a $199 gift card to random people who like it. As powerful as a Facebook “like” is, Burke noted that an email address is more valuable. Citing a recent study by Responsys, Burke said social media drives just 12% of the revenue that email marketing does. But there’s a reason, Burke said: Social media is a two-way communication channel that merchants can use to talk with their customers, while email marketing is used largely just to drive sales.—TP Catalogers and websites Could learn a lot from sitting in on the Multichannel Merchant Awards judging session. A panel at the NEMOA conference last month offered up some advice based on reviewing the 2011 MCM Awards entrants. These are a few of the tips from MCM Awards judges Amy Africa, “chief instigation officer” at web consultancy Eight By Eight; Neal Schuler, president/ principal of Schuler Creative Consulting; and Brad Wolansky, CEO at The Golf Warehouse. take advantage of opportunities for trigger emails.Africa noted one website (Beretta.com) that was collecting the email addresses of people who were interested in a product it had sold out of. Not only is this a way collect emails to do a trigger campaign when the product is in stock, it also lets you know what customers want and gives you a better handle on phantom demand, Africa said. Promos and pop-ups are great, but don’t sacrifice your home page. As an example, Wolansky cited an apparel merchant home page that was a “road block” due to a major promotion that dominated the page. “I don’t believe in sacrificing brand for a promo,” Wolansky said. “I want to show off what my brand is about—even while viewing a promo. The home page is where you put your best foot forward.” invest in “championing your beneficial difference” vs. square-inch analysis. The Shoes For Crews catalog names its competition and quantifies the difference in terms of what makes its products better. “When you can be that specific, it resonates with customers,” Schuler said. Africa offered five critical areas merchants need to get right: entry page, search engines, checkout, email programs and navigation. “Your search is an evolutionary process,” she added.—JT MOBILE APP PUSH MAY BE SOFTENING “there’s an aPP for that” may become less of a reality and more of a catch phrase. Merchants seem to be shying away from creating apps for specific mobile devices and are instead creating sites that are native to mcommerce, according to Bernardine Wu, founder/CEO of ecommerce consultancy FitForCommerce. Speaking on March 2 at the NEMOA Spring Conference, Wu noted that there was a big push for apps a few years back because of the iPhone. “But now merchants wHENITCOMEs TOwEbsITE HOMEPAgEs, “IdON’TbELIEvE INsACRIfICINg bRANdfORA PROMOTION.” —bRAdwOLANsky, CEO,THEgOLf wAREHOUsE need to decide if they want to build one for the iPhone or the Android or for BlackBerrys, or create a site that can be seen on several devices.” Another reason for the lack of app interest: app saturation. Wu said when apps were all the rage, users would download several for their phones, but really only use the same four or five on a regular basis. That doesn’t mean Wu is totally against apps, however. If a merchant has a specific reason for an app other than to launch the mcommerce site in a new window—such as to provide the customer with a game, a configuration tool or some sort of entertainment—it might be worth considering an app, she said.—TP MULTICHANNELMERCHANT.COM/APRIL2011 9 MCM/NEWS —By Hamilton Davison P OSTA L : NEW PMG BRINGS REFRESHING CHANGE TO THE USPS JACK POTTER RETIRED AS POSTMASTER GENERAL (PMG) OF THE U.S. POSTAL SERVICE ON DEC. 3, 2010. That same day, his deputy, Patrick Donahoe, became the head of the second biggest government employer in the U.S. Seeing that Donahoe was a lifelong career postal employee, pundits did not expect to see any radical shifts in strategy as a result. They could not have been more wrong. There is a new sheriff in town, and he is already making a noticeable difference at the old USPS. Who wudda thunk it? In this new world according to Donahoe, customer is king and priorities are shifting. The approach to dealing with mailers has changed totally and is beginning to percolate down. New language is permeating through the postal ranks, such as “be collaborative,” “partner,” “change the game on how we do business,” and my personal favorite: “drive customer value.” As every mailer knows, the Postal Service needs revenue. What is different now is the means to accomplish this: “Figure out why people are giving us money, then find out how we could create more value so they give us more money.” It’s not a new concept for those in business, but a wholly new tactic for a former monopoly only now truly grappling with today’s competitive reality. As Donahoe sees it, technology has done what Congress would not: broken the postal monopoly. Marketers have lots of choices as to where to spend their dollars. The Postal Service aims to get more than its fair share. In more than a half-dozen meetings with the new PMG since he took the helm, I’ve witnessed consistency of theme: Simplify everything, remove barriers to doing business with the USPS, and become far more customer-centric. At the same time, he’s picking up where he left off in his former role as deputy PMG and chief operating officer: the relentless drive to take costs out. It’s more than mere lip service. We are already starting to see results. Gone is the hammer for Intelligent Mail Barcode (IMB) implementation. “We are going to make full-service Intelligent Mail so valuable that everyone wants to use it, not create penalties that force adoption,” said one vice president at the Mailers Technical Advisory Committee (MTAC) meetings in February. This isn’t the old way of doing business at the Postal Service. 10 The IMB, formerly known as the 4-State Customer Barcode, is the next generation of USPS barcode technology used to sort and track letters and flats. IMB technology, among other things, combines the capabilities of the POSTNET barcode and the PLANET Code barcode into one unique barcode. Until recently, mailers had been forced to adopt this by May 2011 or face the loss of automation discounts—which, of course, was a huge penalty. Yet barriers to adoption were large and the payback meager in previously announced plans. This changed in January with the indefinite postponement of the May deadline. The vision is good too. Smart people make things simple. The USPS’s new chief information officer, Ellis Burgoyne, said at the recent MTAC, “We are going to make revolutionary changes to payment systems to make it less inconvenient. Why do you have to open a new permit just because you want to mail from a different location?” MORE WORK TO BE DONE While there’s plenty to get excited about, catalogers must remain diligent about postal matters. The Postal Regulatory Commission on Feb. 16 approved a modest postage increase, effective April 17. The PRC also signaled that it is running out of patience with “underwater flats,” meaning that the Commissioners remain convinced (perhaps erroneously so, as we have contended in recent PRC filings) that catalogs are a money-losing proposition for the USPS. This must be addressed or catalogs could be hit with another massive round of postage increases. Fortunately, the positive, “let’s get it done” team at postal headquarters is planning to leverage IMB to get actual “engineered” costs on mail flow to find new opportunities to reduce costs. Given the fresh attitude from the USPS and the granular data we expect to become available from the IMB, it just may be possible to restore the Postal Service to a pattern of growth and profitability. That is, of course, if mailers embrace this new approach and other constituencies like labor and Congress don’t block such progress. It’s time for all mailing interests to get involved and use the opportunities this openness creates to lower costs, improve value, and ensure that mail remains a viable and useful part of the marketing mix going forward. ● HAMILTON DAVISON (hdavison@catalogmailers.org) is president/executive director of the industry group American Catalog Mailers Association. MULTICHANNELMERCHANT.COM / APRIL 2011 MCM/ECOMMERCE How your ecommerce upgrades or overHauls can affect searcH by paul elliott M ore than half (57%) of online retailers increased their ecommerce technology spending in 2010, according to The Forrester Wave: B2C ecommerce Platforms, Q4 2010. That’s because ecommerce platforms have a “relatively low cost” and a high return on investment. But the reality is that changing or upgrading ecommerce platforms can have a much higher cost than anticipated when the impact on search engine optimization is overlooked. Most major ecommerce platforms tout their ability to produce “search-engine-friendly” or even “search-engine-optimized” websites by simply deploying their out-of-the-box software. But like many other commitments made during the sales process, real world examples make it clear that out-of-the-box search engine optimization can be as elusive as a free lunch. And we all know there is no such thing as a free lunch. Several times during the past year, our SEO team has been called on to help merchants diagnose and remedy the ill effects of platform implementations on search engine performance. These retailers were not seeing the performance gains they were expecting from launching their sites on a new platform. In fact, all of them experienced a detrimental impact on the search results they’d had prior to the upgrade. The experience of a major online specialty retailer that migrated its existing commerce site to a new one built on an industry-leading ecommerce platform illustrates how such a move can affect SEO. Prior to the site migration, organic search represented one of the single largest (and certainly most economical) sources of website traffic for this large retailer, averaging nearly 30% of site traffic throughout the year. Immediately following the launch of the new site, however, the paradigm changed dramatically. Most, if not all, of the organic search key performance indicators (such as keyword rankings, number of indexed site pages, percentage of organic-referred traffic, and percentage of organic-referred revenue) showed a major issue that had to be addressed quickly. By the time holiday 2010 came around, the retailer was in true crisis mode, with organic search down roughly 95% from the prior year. This meant that a significant increase in paid search expenditure was needed just to help fill the gaping hole left by the drop in organic search performance. The end result was a precipitous drop in the merchant’s fourth-quarter revenue and profit due to the disastrous organic search performance. So much for ecommerce platforms having a “relatively low cost.” While there were many factors that ultimately contributed to the organic search problems, the following are some of the major culprits that were tied to the MULTICHANNELMERCHANT.COM/APRIL2011 Illustration: William Rieser 12 SEO and replatforming new ecommerce platform or decisions made during the migration process: >> URL structure Best practice: An optimized URL ideally includes targeted keywords and only alpha-numeric characters. What we found: This ecommerce deployment produced painfully long URLs that included session IDs and other suboptimal parameters. While the ecommerce platform uses a “cloaking” solution to (supposedly) remove session IDs for the search crawlers, Google’s index clearly shows the solution does not work in all instances. Recommended solution: If the selected ecommerce system package does not offer flexibility for altering the URL structure, you can use various external URL mapping or rewriting solutions to remove the nonalphanumeric parameters, as well as shorten the overall length and complexity. >> Directory length/structure Best practice: While URL length is more often a business decision than a technology issue, Rosetta recommends that URLs be shorter than 75 characters and contain fewer than three levels of directory depth. What we found: In this deployment, we found URLs that averaged in excess of 150 characters and six levels of depth for product detail pages, causing significant problems with indexation and passing of link value. Recommended solution: Just because a page technically lives deep in the site hierarchy does not mean that the URLs must reflect that depth. Many retailers make the mistake of building URLs in a similar fashion to navigational breadcrumbs. But it’s not necessary to represent all of the multiple sub-categories and filtering options in the URL. Simple rules can be established to help flatten some of the directory levels presented in the resulting URLs. >> Canonical URLs Best practice: Canonicalization is the process of picking the best URL when there are several choices. This helps the search engines concentrate their focus and consolidate incoming link value. What we found: We found as many as six different ways (URLs) to access this retailer’s homepage. Recommended solution: Canonicalization is most effectively managed through the combination of rel=”canonical” tags and 301 redirects. This approach ensures that all major search engines can find and maintain only one version of the URL in their indices, therefore maximizing link value and authority. >> Duplicate content Best practice: High quality—and highly valued—sites avoid publishing multiple pages with duplicate content. Duplicate content can not only affect an individual page’s performance, but, in aggregate, reduce the overall authority and quality score for the domain. What we found: Poor implementation of ecommerce platforms and connected applications (like on-site search and product recommendations) can lead to inadvertent, technology-driven duplicate content. We found tens of thousands of pages and empty page templates that were likely perceived as duplicate content by the engines. Recommended solution: Because duplicate content can be caused by a wide variety of technical missteps, the recommended solutions vary almost as greatly. But by directing the search engine spiders to avoid certain pages or directories, the robots.txt protocol or meta robots (with no index) are very effective for correcting many instances of duplicate content. A well-planned and tested technical SEO strategy will lay the foundation for overall SEO health and strong organic search performance. Google and Bing both offer pattern-matching options with regular expressions that can be used to identify pages or subfolders that should be excluded. These two characters are the asterisk (*) and the dollar sign ($). • * - is a wildcard that represents any sequence of characters • $ - matches the end of the URL W hile there are no doubt many other on- and offpage factors that affect search engine performance, starting with a solid technical base is a must. As the cautionary tale of our retail example demonstrates, your business deserves more than an empty sales promise from a software salesman. A well-planned and tested technical SEO strategy will lay the foundation for overall SEO health and strong organic search performance. ● Paul Elliott is a partner in Rosetta’s Consumer Products and Retail Vertical, and previously founded and led the ecommerce website design firm’s Search & Media Practice. MULTICHANNELMERCHANT.COM / APRIL 2011 13 MCM/ECOMMERCE WEBSI T E CRI T I QUE: Polishing a pewter merchant’s site WWW.AMOSPEWTER.COM A mos Pewter designs, makes and sells pewter gifts and keepsakes. But is its website a shining example? Or could it use a buffing up? Our critiquers— Amy Africa, president of web consultancy Eight by Eight, and Brian R. Brown, senior manager, SEO of search agency Covario—gave AmosPewter.com some serious scrutiny. Africa looked at content and functionality, and Brown tested search capability. Here’s what they had to say. AMY AFRICA Where should Amos Pewter start in improving its website? Here are nine things the merchant should tweak—you might want to consider them too. 1. Carousels are an amazing tool if they’re used effectively. If not, they can be the kiss of death for your site. In a perfect world, your carousel will fit on one view of your site. The key to the best performing carousels is to make sure that every frame has an action directive—shop NAVIGATION ACCOUNTS FOR OVER HALF YOUR SUCCESS ONLINE. IF YOU CAN’T FIND IT, YOU CAN’T BUY IT. Amos Pewter’s top navigation is okay (the site would be much stronger with more robust lefthand navigation), but it puts way too much emphasis on its text search, which is weak at best. If you want people to use your text search, put it in the upper right-hand corner. 14 now, click here now, add to cart, buy now—whatever the user should do next! Stunning visuals and provocative headlines are good, but if you want to be great, you need to use your carousel to get people to drill deeper into your site. Otherwise, it’s just a bunch of noise. 2. Navigation accounts for over half your success online. If you can’t find it, you can’t buy it. Amos Pewter’s top navigation is okay (the site would be much stronger with more robust left-hand navigation), but it puts way too much emphasis on its text search, which is weak at best. If you want people to use your text search, put it in the upper right-hand corner. Should you put it there? Not likely. Yes, statistically people who use your text search will be more likely to buy than almost anyone else on your site. But if your text search sucks, the traffic won’t buy and they will leave. (Either on the search results page or one of the three subsequent search pages after it, successful or not.) Chances are, you don’t want that. 3. Having a solid cart/checkout, like navigation, will be a big part of your success online. One of the biggest secrets to cart/checkout success? In-your-face action directives that tell users exactly what they’re supposed to do next. This starts with the very first page (for some, it’s a “view cart” page, for others it might be a popup cart). Amos Pewter’s shopping bag is long, and the checkout button is small and somewhat insignificant. That’s an issue. From a user perspective, the best checkouts have alternative ways to order (read: BIG phone numbers), safety and security icons, a temperature bar (allows users to know how far along they are in the process), and speed (you’ve got to be seamlessly quick and without a lot of drama). What does that last part mean? It means that the checkouts with the absolute highest conversions all have one thing in common: MULTICHANNELMERCHANT.COM / APRIL 2011 they only ask questions that are relevant to the order. Getting people to make complex email sign-up choices for one of your bazillion newsletters, or asking them to register with your site before they hit checkout, are not the best ideas. In fact, they’re often the worst. 4. Email is your silent weapon. One of the best things about email (especially trigger emails) is that it makes up for all your other weaknesses online. To have a solid email program, you’ve got to capture as many email addresses as you can. Amos Pewter does a nice job with its “Sign-Up to Receive E-Mail Promotions” handlebar—it’s big and bold, but, unfortunately, it’s buried in the second view. The site also has an email sign-up box in the bottom navigation. Yes, people will scroll on your site, but don’t take the chance—when something is important, ask for it on every view of your site. (One view is approximately the size of your average user’s first screen.) If it’s super important to you (like capturing an email address or getting an order), you’ll likely want to include it in other places as well, perhaps in your top bar navigation, near your shopping cart, or maybe even in a pop-up or a midi. 5. Trigger email programs are key for any size ecommerce business, especially small ones. There are all sorts of trigger emails you can choose from: abandoned cart, abandoned search, abandoned site, EBOPPs (emails based on past purchases), EBOSIs (emails based on selected interest), thank you for ordering, thank you for signing up for our free newsletter, and so on. The key with triggers is to make them look like oneto-one communications—from me to you. Unlike thrust emails, big, fancy graphics aren’t going to make the difference in your triggers, so you’ll want to keep them simple and action-oriented. For example, if you send a thank you after a catalog request, you may want to send a trigger that suggests items that users might want to look at/buy online while they’re waiting for their catalog. 6. Category pages are often more important than your main entry page, so use them wisely. Amos Pewter has set up its site in such a way that there’s a lot of pressure on the category pages. Unfortunately, the site’s category pages are just a bunch of nice pictures, which never quite cuts it. What’s important for a category page? Good question. You want to show users your breadth of product line in such an aggressive way that they know what they’re supposed to do: purchase. CATEGORY PAGES ARE OFTEN MORE IMPORTANT THAN YOUR MAIN ENTRY PAGE, SO USE THEM WISELY. WHAT’S IMPORTANT FOR A CATEGORY PAGE? GOOD QUESTION. YOU WANT TO SHOW USERS YOUR BREADTH OF PRODUCT LINE IN SUCH AN AGGRESSIVE WAY THAT THEY KNOW WHAT THEY’RE SUPPOSED TO DO: PURCHASE. Amos Pewter does a good job with its subcategory pages (Our Favorite Gifts, for example), but the Gifts and Occasions category page leaves a lot to be desired. Can’t fix your category pages? Consider enhancing your navigation and getting rid of them altogether. 7. Know where your traffic is coming from, as well as the best way to sell them. Amos Pewter offers a catalog— we know this because it has a “Request a Catalogue” box. So, it’s only reasonable to expect that Amos Pewter should have an “Ordering from a Catalog” quick order form, right? Unfortunately, it doesn’t. This should be a must-do on its list. By the way, if your quick order isn’t converting at over 82%, there’s something wrong with it. (And if you’ve done it in the past and it didn’t work, that was 100% your problem, not your users.) 8. Use your social sharing icons wisely. If you are advertising on Twitter/Facebook (which is not right for everyone), bring them to your page, not to a “create an account” page or a “sign in and share” page. Also, if you are not using these tools consistently—as in once or more per day—it’s often best not to promote them. 9. Check your site speed regularly. Things like Flash, guided navigation and search, heavily scripted forms, unwieldy carousels, and poorly optimized images can all MULTICHANNELMERCHANT.COM / APRIL 2011 Amos Pewter does a good job with its subcategory pages (Our Favorite Gifts, for example), but the Gifts and Occasions category page leaves a lot to be desired. continued on page 16 15 MCM/ECOMMERCE continued from page 15 have a huge impact on your site performance. Just because your main entry page loads quickly does not mean that your users won’t experience a slowdown in your checkout. Be diligent about your site load/performance and your email deliverability. BRIAN R. BROWN Amos Pewter is one of those specialty retailers that can capitalize on the power of search to connect with customers everywhere. Having a website doesn’t necessarily make a market for products any greater, but it can expose a retailer to more of that market. When dealing within a niche, such as “all-things-pewter,” retailers really want to be performing as well as they possibly can within the search engines to capture as many of the relatively limited searches for the niche as they can. Fortunately, Amos Pewter has a leg up on some of the frequent technical and architectural challenges that often plague ecommerce sites. Let’s look at a few wins: Site is canonicalized on the “www” version Mostly keyword-based URLs Has a robots.txt file and XML sitemap Dropdown navigation is powered by JavaScript, but is accessible to search engine bots • • • • product level, where today, all the product title tags only become more unique further into the title, rather than starting out unique. In many cases, the most unique part that might relate to what is being searched for may not even be visible in the search results listing. Programmatic title tags aren’t a bad thing, but they should still follow the basic principle that the most important, unique keywords are featured at the start of the title tag—and generally any element. Hopefully, the merchant also has the ability to manually control title tags so that the most important, top-level category and subcategory title tags can be overwritten based on insights gained from keyword research. And while title tags are being updated, manually or programmatically, I’d be sure to update the meta descriptions. While these won’t carry a lot of weight with regard to ranking, they may grab a searcher’s attention and help drive click through. Retaining the default “X-Cart” meta descriptions, which some have, won’t do much of anything, however. As stated, Amos Pewter has canonicalized to the “www” subdomain using 301 redirects. Excellent! But for some reason, it switches over to “https” from the categories on down. Again, the site has 301 redirected from “http” to the secure protocol; however, this isn’t really necessary until purchase, where sensitive data may be submitted. No THE AMOS PEWTER HOME PAGE, QUITE POSSIBLY THE MOST IMPORTANT PAGE OF ANY SITE, IS ALMOST ENTIRELY WITHOUT BODY COPY. BEST WAY TO TELL? VIEW THE TEXT-ONLY VERSION OF A CACHED RESULT FROM GOOGLE AND YOU’LL QUICKLY UNDERSTAND WHAT THE SEARCH ENGINES SEE.—BRIAN R. BROWN • Category and subcategory pages feature body copy text But there are still areas that fail, and even some of the wins are only partial. Starting off then, we’ll look at the timeless classic that is the “title tag.” The site no doubt mostly uses programmatic title tag creation, especially when drilling down into the deeper subcategory layers. Unfortunately, the formula is backwards, with nearly all title tags starting off with “Pewter Gifts and Collectibles by Amos Pewter,” followed by each section level. Ironically, the homepage’s title itself doesn’t feature the company name at all. At a bare minimum, I’d suggest these be reversed, so the most relevant, and unique, portion of the page’s title is at the beginning. This becomes hugely powerful at the 16 sense taking the extra hit on page-load through the bulk of the site, though. While it is great to see the site has a robots.txt file and XML sitemap in place, these need a little attention as well. The major search engines are not likely having any issue, but being a stickler, I’d eliminate the blank line between the “User-agent” line and the first “Disallow.” While we’re at it, I’d recommend not blocking CSS or images directories. The former because the search engines may be less trusting, concerned that CSS files may be blocked because spammy and/or sneaky tactics are being used, and the latter because these images may drive some additional traffic via image search results. I’d also like to see an auto-discovery line for the XML MULTICHANNELMERCHANT.COM / APRIL 2011 sitemap added. While we’re on the topic of XML sitemaps, seeing “2008” dates tells me that a little updating is in order. Body copy is often a big challenge for ecommerce sites. I was happy to see that Amos Pewter has made an effort to incorporate some body copy into the site. Ironically, however, the homepage, quite possibly the most important page of any site, is almost entirely without body copy. Best way to tell? View the text-only version of a cached result from Google and you’ll quickly understand what the search engines see. I’d like to see even more body copy added to the category and subcategory pages—especially at the highest top-level categories, which are almost entirely imagebased. Fortunately, the subcategories are on their way with a little more keyword-rich body copy. It’s a fine line, but I might want to incorporate “pewter” into more of the body copy, the headings, and at least page titles. We aren’t just looking at “Collectible Ornaments” or “Earrings,” but “Pewter Collectible Ornaments” and “Pewter Earrings.” But we don’t want to go overboard and toss “pewter” in front of everything. Finally, while URLs and structure aren’t presenting too many obstacles to search engines crawling the site, there are opportunities for improvements. However, these might be limited to the capabilities of the shopping cart or the ability for further development. First, I’d try to avoid getting super deep in directories. Rather than appending every subcategory layer, perhaps limit URL to the current subcategory within the overall category, limiting depth to two to three levels. Second, exclude the category and referring page number in the product URLs. Dropping the keyword-rich URL for a product number parameter-based URL doesn’t concern me much for these primarily longtail type pages, but creating URL bloat and duplication due to multiple URLs for the same product is something to avoid. Need these additional parameters for breadcrumbs or navigation? Then send them wrapped up in a cookie or behind the scenes some other way. That’s a gift that even Google-bot would enjoy! ● MULTICHANNELMERCHANT.COM / APRIL 2011 17 YES, S, YE It’s ,t’It’s a s a 10! 10 Pages WOW !!! No Wafer-Seals USPS Approved Fewer Pages Prospect More Grow Base Open Easy acks Glue T GES 10 PA Mail All Year Creative Mini “Slim” Design Services Mini “Slim” Catalog 10 Full Pages Format 10.5 x 5.875 TM TM Inside/Outside Personalization Commingled Mail Deep into USPS s '-ASTER0RINTERs MINI “SLIM” CATALOG MAILER ™ INCREASE WEB TRAFFIC, ALL YEAR! For the cost of a Standard Letter . . . B&W PRESS Point to Us! 1-877-246-3467 Private Since 1965 www.bwpress.com Scan with your smart phone for more info. T he Best Per Piece Value! FREE OFFER! I like you to prepare a FREE Creative I’d Design Mock-up from my existing artwork, DignMoc so I can evaluate the Mini “Slim”TM Catalog for my marketing efforts. I’d I like to receive a FREE Mini “Slim”TM Idea IaKitKit from B&W Press with preliminary pricing. Please Pase send me a Mini “Slim”TM electronic design template. digntempla Fax or Email this FREE OFFER to 978-352-5955 CSR@bwpress.com MCM/M-COMMERCE Mobile coupons: physical vs. cloud By RiCk ChaviE M obile couponing gives you an opportunity to meet customers where they are present in a channel, interact with them on a personal level and, ultimately, earn their loyalty. But merchants looking to incorporate mobile coupons into their business models must understand the various levels of mobile couponing to be sure they are investing in a model that yields the greatest return on investment—now and in the future. First, do retailers need to adopt a mobile strategy? If you aim to survive in the current consumer-driven marketplace, you should probably go mobile. Consumers are less loyal, more demanding and constantly on the go. They are also increasingly accessible via mobile devices, offering retailers a favorable channel for consistent engagement. Before you select a mobile strategy, however, you must evaluate your desired mobile marketing goals and the customers you are trying to reach. Key to this strategy: considering the benefits and limitations of “the physical” and “the cloud” levels of mobile couponing before moving forward with implementation. Let’s get physical The “physical” level of mobile couponing is a simple, effective approach for engaging customers with highly personalized messaging by sending a barcoded coupon. According to 2010 NCR research, mobile phone use is growing, with 86% of respondents reporting that they currently use a mobile phone. This demonstrates the importance of the mobile channel, and evidence supports the fact that customers want to receive information via mobile channels. In fact, 44% would like to download coupons to redeem when checking out through a barcode scanner. Despite the benefits of physical mobile couponing, there are significant limitations to this device-centric level of mobile couponing. First, there are technical hurdles, including the reality that not all devices read 2D barcodes, impeding the ability of the consumer to redeem the discount at checkout. Second, if a retailer’s application requires the consumer to use a particular mobile device, there can be a compatibility issue. Both of these issues are at odds with a customer-centric retail marketplace in which customers demand to be reached where, when and how they prefer at any given time. What’s more, while it is true that customers are frequently in transit and often carry their mobile phones, at times a customer may be without his or her device and therefore would not have access to the coupon. Whether consumers are on their home computers, checking email via smartphone or looking to redeem a discount in-store, retailers must make the information accessible where consumers choose. Looking to the cloud Keeping information in, and executing mobile couponing communications from “the cloud” can help break through these limitations and broaden interaction options through multiple channels. Cloud-based computing makes information readily accessible to the mobile customer independently of one specific device. Converged retailing technologies and solutions allow retailers to deliver timely, personalized transactions, information and promotions seamlessly across all channels. Systems that push information out to all types of webenabled mobile and stationary devices are being developed using downloadable applications and web links alongside existing email technologies for barcode delivery to mobile phones. Keeping information in the cloud supports an infrastructure that enables a converged communications strategy. And it adds the convenience of tapping into information when, where and how customers want. Furthermore, it lays the foundation for a more flexible mobile platform that adapts to individual preferences in real-time, and larger retailing trends and technological innovations. No matter what technology/device emerges next, maintaining information in the cloud provides a flexible, economical infrastructure. T he bottom line is that retailers must meet customers’ preferences in interaction, and market directly to each individual—however the individual prefers. Mobile communication is essential for survival in this environment, whether via a physical device or by keeping information in the cloud. Retailers need to make it a priority to know their audiences and adopt the mobile marketing model that best suits their goals now and into the future. l MObILE COMMUNICATION IsEssENTIAL fORsURvIvAL INTHIs ENvIRONMENT, wHETHERvIA APHysICAL dEvICEOR bykEEPINg INfORMATION IN“THECLOUd.” RETAILERs NEEdTOMAkE ITAPRIORITy TOkNOwTHEIR AUdIENCEs ANdAdOPT THEMObILE MARkETINg MOdELTHAT bEsTsUITs THEIRgOALs NOwANdINTO THEfUTURE. Rick Chavie is vice president, marketing retail and hospitality solutions, for global technology company NCR Corp. MULTICHANNELMERCHANT.COM/APRIL2011 19 MCM/M-COMMERCE Five keys to mobile-ready email design W e all know that more people are reading their email on smartphones. But do you know how to craft your emails so that smartphone users can read and respond to them easily? Matt Caldwell, senior creative director at Yesmail, says that there are three options with “mobile opens.” • You can include a link to a text version of the message, which many marketers do in their preheaders. This is easy and safe, but it doesn’t provide a riveting email experience. • You can create a dedicated mobile version of each email, but this can be costly and time-consuming. What’s more, both of these options require additional clicks by the subscriber, and we all know that more clicks translate to lower response rates. • The third, and as far as Caldwell is concerned best, option is to “design your emails to scale down cleanly” so that they are legible and engaging regardless of the platform on which they’re being read. Given that an iPhone allows for a 300pixel width when held vertically and a 480pixel width in landscape format, compared with typical inbox pixel widths of 600 and more, this can seem daunting. Making matters trickier, while iPhones do resize emails to fit their screen, other smartphones do not. These are Caldwell’s five keys To sCalable email CreaTive: 1. A grid system Designing your mes- 5. vieWport metA tAg This is a simple code placed in the HTML header that enables some smartphone browsers to automatically change the dimensions of the email to accommodate the smartphone. l With us, opportunity flows like a river Nar row Yo u r S e arch an d Ta rg e t an A cti v e , L oyal Cu stom e r B a s e At William-Neil Associates, we maximize your marketing potential with targeted customers who spend more than $130 per purchase on average. From outdoor sages on a grid system, in which the various elements are aligned, allows emails to scale down much more neatly. By ShERRy ChigER enthusiasts to everyday consumers of casual clothing and home accessories, our customer database includes prospects who enjoy a casual outdoor and do-it yourself lifestyle. Check out Cabela’s additional product categories www.william-neil.com 2. A single-column design 3. items grouped into sections If your email has multiple items or article links, group several together to create a discrete section. Use the background color of the email itself to act as the divider between the various sections for easy organization. 12 Month Men’s Clothing 12 Month Men’s Footwear Annual Package Insert Program 567,060 386,840 6,145,000 4. big scAle on A nArroW pAge 55 104 55-104 Caldwell advises designing to a width of 450 or so pixels, with a minimum font size of 14 pt.; headlines, he adds, should be at least 30-pt. type, which means “you’re going to have to go on a word diet.” MULTICHANNELMERCHANT.COM/APRIL2011 21 ON THE MOVE WITH. . . Printing Lettershop Imaging Commingling DIRECT MAIL! JAPS-OLSON MAKES IT EASY FOR YOU! Contact us today for our sample kit. JAPS-OLSON COMPANY l 7500 Excelsior Blvd. l St. Louis Park, MN 55426-4519 l 952.932.9393 l Fax: 952.912.1900 l www.japsolson.com Call or Fax coupon for our Sample Kit to be mailed to you. Name Company Address City State Zip Email: Ph. Email: droth@japsolson.com Fax Phone: 952-912-1440 MM MCM/CATALOGS CATALOG COPY BY HERSCHELL GORDON LEWIS Seven little words O ne of the most desirable disciplines any copywriter can employ is avoiding the automatic use of words that have less impact than a “parallel” word might have. Why not swap some words we use without analyzing their implicit weakness for other words that have more a) salesmanship, b) color, and c) positive impact. We probably won’t agree on all these proposed exclusions; we may not agree on any. So I’ll settle for agreeing that before we turn any wordage loose, we inspect at least one sentence in each paragraph with the heartless intention of improving one word. Let’s start with an obvious candidate: Available What’s wrong with “available”? It suggests, openly or subliminally, that something else exists, but we don’t have it. The use of “available” also implies incompleteness on our part as vendors of products, services or concepts. Write around it in any intelligent way and you’ll increase acceptance of your position as a prime source of whatever. Close on the heels of “available” is another contender: Among Replacing “among” is as easy and basic as substituting “one of.” What positive factor does “one of” have that “among” doesn’t? Even a cursory analysis exposes “among” as telling the reader, viewer or listener that what we’re selling—or, worse, that the reader, viewer or listener himself/herself—is a pale and neutral component in a mob or mass. Let’s add a symbol that spontaneously damages rapport: & The ampersand, official name of “&,” is necessary when we’re directly quot- ing a product or company name. It destroys personalization. Visualize Elgar’s “Pomp and Circumstance” reduced to “Pomp & Circumstance.” Cringe when you see Shakespeare’s “Romeo and Juliet” tossed into a mediocre, rhetorical dungeon as “Romeo & Juliet,” which might be a fast food joint. Want ultimate ampersand-damnation? Invariably, it’s part of the name of a law firm. The web has diminished the cachet of a once-valid but never inspiring word: Participation Invariably, web references are turnoffs: “Participation required.” What a deadly combination! “Participation” implies work without reward. And we don’t need an external goad to remind us that the word “required” has all the positive impact of a boil on the neck. Are you pitching exclusivity? Then you’d better erase this word, temporarily at least, from your creative dictionary: Quantities You’re suggesting this is rare, uncommon, hard to get, exclusive—and you say, “Quantities are limited”? The very existence of “quantities” belies your claim. Even a simple patch such as “our allotment” avoids the quantity-mismatch. And that realization tells you when “quantity” has a place in selling copy—when you want to imply bulk or plenty. Now, a word the Internet has thrust into prominence. It’s one that generates subliminal rejection, even as we use it: Submit Ever look up “submit?” Along with “refer for judgment or consideration,” you’ll see “put before,” “yield to the control of another,” “hand over formally,” “refer to another person for decision or judgment,” and “accept or undergo, often unwillingly.” Every one of those puts the buyer in an underling position. Why do that? Our job as salespeople is to make the recipient think we’re placing him or her in a superior position. One more. It’s a personal prejudice, and I admit cheerfully I’m foisting it on you: However That word may have had some position in the 19th century. But we’re in a more universally proletarian society, and words such as “however” and “indeed” tell the people we’re trying to influence—even the hypersophisticates—that we’re pompous pseudointellectuals. Do we want to transmit that image? W ell, okay. The purpose of this rant is to recruit more creatives who will care more about the possibility of adding octane to the psychological power of their prose. Are you in that elite group? After all, quantities are limited. ● THE UBIQUITOUS “QUANTITIES ARE LIMITED” SHOULD SUGGEST TO AN ALERT CATALOGER THAT REWORDING THE CONCEPT TO AVOID SUGGESTING BULK MIGHT BRING BOTH GREATER POSITIVE ACCEPTANCE OF “FEWNESS” AND GREATER ACTUAL RESPONSE. Herschell Gordon Lewis is the principal of Lewis Enterprises (www.herschellgordonlewis.com) in Pompano Beach, FL. MULTICHANNELMERCHANT.COM / APRIL 2011 23 mCm/CATALOGS Q UA rTerLy PA P er U PDATe: Look for paper prices to keep going up By Jim Tierney T he cost of catalog paper will go up in the second quarter. Most of the major paper mills have announced an increase of $2 per hundredweight (cwt) effective April 1. The price hike is no surprise, says Dave Goldschmidt, vice president of marketing, catalog division, for paper brokerage Strategic Paper Group. “The mills have been stingy with price protection and caps,” he says. “They have been holding pricing; inventories are low; and all signs were pointing toward a second-quarter increase.” In addition to market tightness, mills are facing cost pressures from rising chemical, fiber, and fuel and transportation costs that will likely result in another paper price increase in the second half of the year, Goldschmidt adds. Worse yet, Goldschmidt expects the market supply to tighten up because coated paper supplier NewPage eyeS oN NewPage’S ProSPecTS Some industry watchers are concerned about the fate of coated paper supplier NewPage, which shut down its Whiting mill in February. “It’s anybody’s guess if [NewPage] follows the path of AbitibiBowater (a merger), gets purchased by another company, or manages to find a way to survive on its own,” says Dave Goldschmidt, vice president of marketing, catalog division, for paper brokerage Strategic Paper Group. But Goldschmidt does not expect NewPage to stop operating altogether. The company has good assets remaining, he notes, “so we suspect that whatever happens, most of their manufacturing equipment will keep running.” NewPage, the largest manufacturer of coated paper in North America, has some of the most efficient equipment in North America. And, Goldschmidt says, “It has already taken the most coated capacity out of North America by removing its less efficient mills over the past few years.” If NewPage were to merge with another mill, Goldschmidt adds, “it would not be the best situation for the end user, because it would mean one less potential supplier—which is the same thing we have been seeing with consolidations in the printing industry.”—JT 24 shut down its Whiting mill in February, due to declining demand. The mill operates two paper machines, which produce about 250,000 tons of coated paper a year for catalogs, magazines and retailers. (See “NewPage’s prospects,” bottom left, for more.) Another factor fueling the price hikes Paul Buohl, manager of estimating and purchasing for direct marketing production consulting firm EU Services, points to rising fuel prices nationwide that will affect paper pricing in the second quarter and, possibly, for the remainder of 2011. The prospect already has harried paper buyers scrambling. Lead times for many paper purchases during the end of the first quarter were less than a week so that companies could beat the April 1 price increase date, says Buohl. “I would say that paper prices will increase again before the end of the calendar year as input costs continue to rise,” Buohl predicts. “The mills are doing their best to control the supply side, but demand is still weak.” Gary Evjen, senior vice president of sales at Wade Paper Corp., agrees that the second-quarter price increase will be implemented “even though the mills aren’t jammed with orders.” Mills are replenishing their inventories slowly, Evjen says. However, inventory volume building will accelerate during the latter part of the second quarter to prepare for the catalog season. “Inventory building will be weighed against profitability,” Evjen says, “and major paper mills won’t hesitate to take downtime to balance supply and demand.” While there don’t appear to be any labor issues threatening capacity, the brutal winter for most of the country and subsequent spring thaw could present a disruption later in the spring, Evjen speculates. “The incredibly tough winter across the upper tier of states will cause disruptions with weight limits on the roads and access to forestlands,” he explains. “The Southeast will also have issues with flooding and road conditions in the woodlands.” Increasing energy and chemical costs will consume much of the benefit of the second-quarter paper price increases, Evjen says, and transit costs will have a sizable impact on mill profitability. He also believes fuel surcharges will be reinstated by those mills that dropped them in the past year or two. l MULTICHANNELMERCHANT.COM/APRIL2011 Need Better Solutions for Shipping and Order Fulfillment? See our Fulfillment Videos at... autobag.com/shipping Our Systems Deliver. Autobag® AB 255 OneStep™ Mail Bag System Automated Packaging Systems invented the original Autobag® pre-opened bags-on-a-roll systems and products in 1962. Today, we are a global leader in bag packaging, void-fill, and protective packaging solutions for shipping and order fulfillment operations. Order Fulfillment Systems PaceSetter PS 125™ Tabletop Baggers From integrated and customizable printing and packing systems using the Autobag® AB 255 OneStep™, to the portable, tabletop PaceSetter PS 125™ Baggers, we have flexible and efficient bag packaging systems to streamline your fulfillment operations. 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EarthAware™ biodegradable and recycled films are a cost-effective alternative to PLAs and other bio films. 888-288-6224 | www.autobag.com/shipping MCM/MARKETING MERCHANDISING BY ANDREA SYVERSON The real undercover boss M IN HIS BOOK LOVEMARKS: THE FUTURE BEYOND BRANDS, KEVIN ROBERTS LISTS SIX QUESTIONS THAT ARE NOW TOP-OF-MIND FOR CONSUMERS. THESE INCLUDE: How can I buy material things and feel good about it? Why does choosing take up so much of my attention? What can you offer me besides price? What do you really know about me—and what do I know about you? What have we got to talk about? And, can you keep up with me (in-store, in games, on TV, on mobile phones and across platforms in general)? THESE QUESTIONS ARE A GOOD STARTING POINT FOR DEVELOPING A TRULY CUSTOMERCENTRIC BRAND CHECKLIST. 26 uch as we may enjoy watching various C-level executives go “undercover” on the popular reality TV show, the real “boss” for all merchants is—or should be—the customer. Walmart founder Sam Walton put it best: “There is only one boss: the customer. And she can fire everybody in the company from the chairman on down, simply by spending her money somewhere else.” But an informal poll of my friends in recent months uncovered little good news on the customer satisfaction front in either stores or online channels. In fact, they all complained about poor/ rude customer service, inventory issues, disappointing selections, long lines, slow websites and long phone holds— at merchants across product categories. So while merchants continue to pay lip service to customer service, relatively few invest in the training, adequate staffing and other support systems. Without that investment, the employees who are on the front lines will be hard-pressed to deliver a “customer is the boss” experience. Notably, however, I heard no complaints about Amazon.com, Netflix, QVC, Avon, L.L. Bean, Newegg, Apple, eBay, Musician’s Friend, Vistaprint, Walmart and Williams-Sonoma. This turns out to be no coincidence: Foresee reported that these companies delivered a superior online experience during the 2010 holiday season. mind for consumers. These include: How can I buy material things and feel good about it? Why does choosing take up so much of my attention? What can you offer me besides price? What do you really know about me— and what do I know about you? What have we got to talk about? And, can you keep up with me (in-store, in games, on TV, on mobile phones and across platforms in general)? These questions are a good starting point for developing a truly customer-centric brand checklist. Let’s use these same questions to analyze how the above-noted customer-friendly e-tailers differentiated themselves from their competitors during the holidays. Reviewing the partial results below could be good homework for merchant brand leaders. Customer-centric question: How can I buy material things and feel good about it? What if one of your kids wanted a guitar for Christmas, but you had no idea where to begin when it comes to such a purchase? No worries. The How outstanding e-tailers aced the holidays In his book LoveMarks: The Future Beyond Brands, Kevin Roberts lists six questions that are now top-of- MULTICHANNELMERCHANT.COM / APRIL 2011 savvy brand leaders at Musician’s Friend created comprehensive buying guides to help customers sort through the choices. Here’s how Musician’s Friend introduces its service on its website: “Don’t know a humbucking pickup from a single-coil? Not sure if you need a condenser or dynamic microphone? Our experts will help you sort out the specs and understand the key features to help you make the right decision in choosing the instrument or gear that best matches your needs and budget.” The merchant then offers detailed educational explanations for its customers. Below is a section from its piece on acoustic guitars: Customer-centric question: What can you offer me besides price? Many grandparents received a wall calendar chock-full of their grandkids’ photos for the holidays—a gift most recipients treasure each year. Vistaprint not only provides plenty of format options for pleasing Grandma and Grandpa; it has recognized and capitalized on opportunities to help business executives delight their employees and customers. Vistaprint offers wellpriced traditional-format calendars, but also showcases poster- and wallet-size print formats, magnetized versions, desk calendars and other options. When a customer clicks on the desk calendar format, up pops this testimonial from a businessman in Glendale, CA: “Last Christmas, I created desk calendars using some of MAsTERMULTICHANNELERWILLIAMs-sONOMA dELIgHTsINkNOWINgANdREsPONdINgTOITs CUsTOMERs’NEEds.Forthe2010holidays,W-s onlineofferedcurated,trulyselectivegiftideasunder tabsdesignated“FortheCook,”“FortheEntertainer” and“FortheWineLover.”Byhand-selectinggroupsof giftsofferingavarietyoffunctionalities,featuresand pricepoints,thisfamousbrandshareditsexpertisein ameaningfulway. By hand-selecting groups of gifts offering a variety of functionalities, features and price points, this famous brand shared its expertise in a meaningful way. This no doubt helped it win sales as well as gratitude from harried customers looking for thoughtful but easy-to-find gift solutions. this past holiday season—as in the previous year—was its Kindle ebook reader. Kindle 3 became Amazon’s best-selling item of all time (actually beating out DVDs of “Harry Potter and the Deathly Hallows”). One big factor driving this success was the general merchandise giant’s “Buy Once, Read Everywhere” apps, which enabled customers to gift family and friends with flexibility for their mobile lifestyles. Amazon.com definitely keeps up with its customers. my watercolor images. I included birthdays of all my co-workers so everyone knows each other’s birthdays. I gave them as holiday presents and they were a HUGE success! When I visit offices, everyone has them on their desks.” Vistaprint uses such testimonials to serve its customers by providing suggestions about other ways photo calendars can be used, and other family and nonfamily folks who might love receiving these personalized gifts. Very smart marketing—and the copy writing is done for Vistaprint by its brand fans. Customer-centric question: Can you keep up with me? One of Amazon.com’s biggest hits Customer-centric question: What do you really know about me—and what do I know about you? Master multichanneler WilliamsSonoma delights in knowing and responding to its customers’ needs. In addition to its long-standing practice of sharing recipes its customers will love (using branded ingredients, of course), Williams-Sonoma knows that its cooking-enthusiast customers have like-minded friends who covet foodie gifts. For the 2010 holidays, WilliamsSonoma online offered curated, truly selective gift ideas under tabs designated “For the Cook,” “For the Entertainer” and “For the Wine Lover.” Are you (really) focused on what customers care about? Brands that generally excel at understanding and delivering what their customers care about work hard to maintain and build on this competitive advantage. They know that there are always going to be areas where they can and should do better. These areas and nuances become apparent when you become a customer of your own brand. I frequently go undercover and buy in stores and online from a client brand and its competitors and report the often eye-opening experiences. If you are serious about achieving a significant improvement in your brand’s performance this year, here’s my advice: Use Roberts’ six questions as a foundation for creating your own customer-centric brand checklist. Then focus on delivering on the top customer expectations within each of these areas. If you do this, you’ll have the right boss at the head of your organizational chart in time for next holiday season. l ONEOF AMAzON.COM’s BIggEsTHITs THIsPAsTHOLIdAy sEAsON—AsINTHE PREvIOUsyEAR— WAsITskINdLE EBOOkREAdER. Onebigfactor drivingthissuccess wasAmazon’s “BuyOnce,Read Everywhere”apps, whichenabled customerstogift familyandfriends withflexibilityfor theirmobilelifestyles. Amazondefinitely keepsupwithits customers. Andrea Syverson (asyverson@ierpartners. com) is president of the consultancy IER Partners, and author of BrandAbout: A Seriously Playful Playbook for Passionate Brand-Builders and Merchants. MULTICHANNELMERCHANT.COM/APRIL2011 27 MCM/LISTS & DATA STRATEGIES By Philippe Graner and Ken Lane Is your contact strategy in crisis? FIvE wARnInG SIGnS ThAT youR MARKETInG nEEDS woRK B eing proactive is a big buzz phrase in our industry. But many direct marketers continue to engage in practices that seriously undermine the effectiveness of the contact strategies that, in large part, determine their performance and profitability. Once these practices have taken root, they can become so entrenched that marketers no longer even recognize their insidious effects. What can you do? Here’s a look at the biggest contact strategy underminers within the five core stages or components of contact strategies. If you recognize your company or department in any of these, it’s probably time for some re-evaluation. 1) The dysfunctional budget BEsT-IN-CLAss ORgANIzATIONs UsEBOTTOM-UP BUdgET PROCEssEsTHAT AREINfORMEd ANdgUIdEdBy REALIsTIC OvERALL fINANCIALgOALs. THIsENABLEs MANAgERsTO sETAMBITIOUs BUTACHIEvABLE gOALsTHAT AREsUPPORTEd BysUffICIENT INvEsTMENT ININTERNAL REsOURCEs. 28 Here’s a news flash (not): The budget largely determines the fate of your contact strategy. If the budget is faulty or inadequate, you will fight for the rest of the fiscal year to achieve results. Too often the budget process is not only lengthy and tedious, but misguided, frustrating and ultimately counterproductive. Many will recognize this scenario: Detailed, bottom-up budgets are prepared for the executive board by individual department managers worried about over-promising on results. These budgets are then rejected by top management or the board, members who have set a growth target that doesn’t reflect the realities of the organization’s current resources, market dynamics or other core variables. The back and forth eventually results in a budget that fails to support the growth objectives, yet drives inventory purchases, fulfillment and call center staffing, paper purchases, and all other components of the strategy. Truly best-in-class organizations use a different approach. Their bottom-up budget processes are informed and guided by a realistic overall financial goal that enables managers to set ambitious but achievable goals that are supported by sufficient investment in internal resources. 2) Insufficiently defined customer segments Most seasoned direct marketers have a solid handle on traditional recency/frequency/monetary segments for their print customers. But ask some of these same marketers for the segmentation data for their web-only segments or email campaigns, and you’re likely to get blank stares. In today’s multichannel world, knowing which channels work for which customer segments under which circumstances, and the optimal frequency of contact for each segment and channel, is not optional—at least if you plan to achieve your financial goals. Without this in-depth understanding, there’s simply no way to allocate advertising/marketing spending so as to optimize response and order size per marketing dollar spent. One company that recently measured channel preference over a full year discovered that 15% of its file could be contacted solely through the online channel without depressing response rates or average order value. Another 24% needed to receive print campaigns on a monthly basis. The remaining 61% needed a combination of the printed piece (but only every two months), complemented by weekly email campaigns. The merchant’s cost savings on the online-only and reduced print-contact groups more than compensate for recent print and postage increases. Some warning signs that your multichannel segmentation efforts are not optimized include declining AOV and response rates in your best performing segments (print/ online or both); increasing home page bounce rates; increasing opt-out rates for the best performing email segments; a growing proportion of one-time buyers as a percentage of the overall 12-month house file; and model-scored names no longer outperforming unmodeled segments. 3) Allowing silos to sabotage the multichannel strategy When it comes to the synergistic power of a multichannel contact strategy, many companies suffer from the silo effect. One example: Online marketing managers launch an email campaign with a free shipping offer to all top segments, unaware that this is going to skew results for a simultaneous A/B print campaign that’s testing a free shipping offer. Solution? Institute regular strategic contact planning sessions. Create separate “channel cohort” groups to brainstorm ideas and broadcast marketing initiatives across the organization. Marketing managers for print, web, mobile and social media will provide distinct opinions on channels, frequen- MULTICHANNELMERCHANT.COM/APRIL2011 acquisitiOn/reactivatiOn needs Current Frequency 0-12Mo.HL One time 100,000 Two times 60,000 Three times 30,000 Four-plus times 10,000 Total 200,000 cy, timing and offers. The approaches offered by the newer channels can often be applied to older channels. The critical analytical work conducted for some of the older channels (too often perceived as “grunt work” by the newer-channel staff) can be applied to determine accurate ROIs for newer channels. If your marketing managers barely know the names of their colleagues in other channels, the likelihood of skewed test results and inefficient customer contacts is high. Here are some of the data points your marketing managers should be following: u What portion of the business comes in through social media or mobile channels? Is this growing? How fast? What would you do today if you knew that this channel could account for 25% of your total business 12 months from now? u What is the Facebook fan penetration rate on your file? Should it be higher? u How are your prospecting response rates doing? Increasing? At pre-recession levels? u What are your pay-per-click acquisition costs? Are they increasing? What portion of your business is PPC-initiated? 4) Overreacting to preliminary results during post analysis How many times have you seen this happen: A company launches a campaign, reviews the early data, and draws some preliminary conclusions. Then, because of insufficient internal resources or inadequate planning, those preliminary results are reported as “final.” The sad reality is that many teams have ceased conducting promotion wrap-up sessions because of time constraints or—worse yet—inability to measure and manage effectively. This matters—a lot. Case in point: If the company in the segmentation case study described earlier had failed to analyze the full test results before revising its contact strategy, the outcome could have been catastrophic instead of highly positive. The initial one-month read on the online-only channel was 32%—more than double the real (final) 15% finding. Imagine the performance effects had this company pulled the necessary marketing elements for maintaining revenue per customer on 17% of its 12-month file—and shudder as you imagine how the same mistake would affect your own bottom line. 5) Failure to test new acquisition channels The relative levels of emphasis and resources devoted to acquiring, retaining and increasing share of wallet 2011PLAN Prospects Reactivations Total Circ. 4,000,000 400,000 4,400,000 10%YOY growth 110,000 66,000 33,000 11,000 220,000 Industry YOYloss 30,000 12,000 3,000 500 45,500 RR% 1.00% 1.10% 1.01% Acquired names 40,000 4,400 44,400 Totalacquired namesneeded 40,000 18,000 6,000 1,500 65,500 2011ACQUISITIONPLANSHORTFALL Names needed 65,500 Forecast names 44,400 Shortfall (21,100) (through targeted customer penetration programs) vary over time, depending on a company’s life cycle and other factors. But the survival and success of all companies ultimately depends on consistently balancing all three. Unless your customer retention rate is 100%, some level of prospecting is mandatory at all times. Consider the hypothetical example, shown in the box above, in which a company is looking to increase the customers on its 12-month house file by 10% year-overyear. As you can see, it would need to acquire/reactivate 65,000+ names, accounting for typical file degradation. Mobile technology, social media and general 24/7 consumer “connectedness” and empowerment are fast reshaping the entire marketing game. To stay relevant and competitive, all multichannel merchants must continually ask themselves questions such as: uAre my Facebook fans a potential source of new customers? uHave I investigated Groupon? Given PPC cost inflation, are my organic SEO efforts productive (or productive enough)? uWhat’s my ROI for each acquisition campaign, across all channels? What about their lifetime values? Think of your customer contact strategy as a living, continually developing entity that’s born during the budget process, refined through segmentation, acquisition and multichannel optimization prior to a campaign launch, and brought to maturity/fruition through postanalysis and the strategies implemented as a result. Each step in this nurturing process plays a critical role in determining the ultimate result: a whole that is greater than its parts. Within each core step or stage in the contact strategy process, warning lights— if heeded—enable marketers to steer those strategies back on course to achieve their financial goals. l MULTICHANNELMERCHANT.COM/APRIL2011 Philippe Graner (philippeg@jschmid.com) is director of marketing strategy and Ken Lane (kenl@ajschmid.com) is senior marketing consultant for J. Schmid & Associates, a Mission, a KS-based catalog consultancy. 29 A peek into our exclusive Outlook industry research results BY MELISSA DOWLING A 6 MCM OUTLOOK: Trends 30 2011 TREND #1 The catalog is more of a marketing tool rather than an order medium. Merchants naturally hope that their print catalogs will generate sales. But as those sales come in though other channels, the role of the catalog continues to shift to that of brand builder and web/store traffic driver. In fact, on a scale of 1 to 10 in importance (with 10 being the most important), respondents rated branding 7.86—slightly higher than web traffic driver at 7.84. Respondents in 2010 rated web traffic driver a bit higher than branding. When you look at how orders are coming in, the web is clearly the dominant order channel, and this is no surprise. A mean 45.2% of direct orders come in MULTICHANNELMERCHANT.COM / APRIL 2011 Illustration: Michael Austin More than half of the merchant respondents have annual sales of less than $10 million. for dvancing technologies, shifting consumer shopping patterns and priorities, and new economic realities are all fast changing the way multichannel retailers do business. Multichannel Merchant’s Outlook 2011 research initiative aims to get a handle on what marketers are doing now and how they’re planning for the future. We polled our audience earlier this year to determine what they’re doing in the functional areas of catalogs, e-commerce websites, general marketing, and operations and fulfillment. Nearly 600 merchant companies completed the Outlook 2011 questionnaire. Who took the survey? More than half (53%) sell primarily to consumers, about a third (32%) sell primarily to other businesses, and 15% sell to a relatively even distribution of consumer and b-to-b customers. Nearly all (96%) have an ecommerce website, while 65% have print catalogs and 38% have retail stores. The results are weighted toward smaller merchants: Nearly a third (29%) have annual sales of less than $1 million, while 55% have sales of less than $10 million. Just 17% report sales of more than $100 million. What did the responses to Outlook 2011 reveal? For a more detailed look at each area, you can download the full research reports at Multichannelmerchant. com/outlook2011. But in reviewing the overall findings, we uncovered six trends in the multichannel selling industry. COVER STORY Those not using mobile commerce by company size: How merchants track their catalog’s effectiveness Keycode capture 67.9% 64.5% 60.5% Matchback program Sales $10 million-$50 million Sales > $50 million 21.2% 25% 7.1% 45.5% 83.9% Sales $1 million-$9.9 million 73.7% 75.8% Sales < $1 million 13.2% 16.1% 3.2% 7.9% 7.1% 3% We don’t have a formal program Sales Sales Sales Sales of less than $1 million ..................75% $1 million-$9.9 million ................. 86% $10 million-$50 million ............... 69% of more than $50 million ............ 68% Other How are you using mobile commerce? We have an m-commerce site through the Internet, while 19.5% are placed via the catalog call center, 9.5% still arrive via good old-fashioned mail order, and 7.51% come in through fax. Not that ordering is all about the web—especially for b-to-b merchants, who still rely on more personalized contacts with customers. A mean 39.9% come in via “other” methods; these include a direct sales force, outbound telesales, trade shows and mobile. As more orders come in via the web, tracking the effectiveness of the print catalog is a must. Keycode capture is the most popular tactic, as 65% of total respondents this year do it, compared with 61% in 2010. Nearly half (46%) have a matchback program, about the same percentage as last year. Sadly, the percentage of total respondents who have no formal program is also the same—in fact, it increased from 28% in 2010 to 29% this year. As the chart directly above shows, the smallest respondents are skewing the results for this question: A staggering 68% of respondents with sales of less than $1 million do not have a formal program for tracking their catalog’s effectiveness. It’s still surprising that about 15% of larger companies don’t have a program either. We use mobile advertising to promote sales and special offers We use mobile search ads We distribute mobile coupons We have mobile apps We are selling through our mobile channel We send Text/SMS messages 10.3% 6.9% 2.6% 10.3% 3.4% 12.1% 74.1% We are not using mobile commerce Total does not = 100% due to multiple answers Which of the following rich media techniques does your company use? Product visualization tools Zoom 17.7 2011 19.1% Alternate views 20.5% 33.6% 14.4% 21.0% Video Mobile commerce adaptation is shockingly slow among multichannel marketers. If 2010 was supposed to be the year that mobile commerce really took off, multichannel merchants apparently didn’t get the memo. Nearly three-quarters (74%) of the total 2010 26.9% 28.6% Product demonstrations TREND #2 9.5% Widgets We are not using rich media 46% 49.6% 14% 8.4% 38.1% 26.1% Total does not = 100% due to multiple answers continued on page 32 MULTICHANNELMERCHANT.COM / APRIL 2011 31 COVER STORY continued from page 31 respondents are not using mobile commerce this year. That’s fallen a bit from the 79% that were not doing mobile in 2010, but is still not acceptable—what are merchants waiting for? And it doesn’t have much to do with company size. Yes, 75% of the respondents with sales of less than $1 million aren’t in m-commerce, but 68% of respondents with sales of more than $50 million aren’t using mobile either. Given these findings, it’s no surprise that just 9% of the total respondents are using QR codes. That’s too bad, because these barcodes that work with mobile devices would be a great way for catalogers to bridge the gap between the print and web channels. Trend #3 Merchant websites are getting richer. We saw an increase in the use of almost all rich media techniques. Use of alternate views went up the most, from 21% in 2010 to 34% this year. But use of widgets fell from 14% last year to 8% in 2011. Hopefully, respondents are putting the resources they might have used for widgets into mobile apps. Merchants also stepped up their implementation of usergenerated content. What types of user-generated content are hottest? Blog comments saw the biggest leap, from 18% in 2010 to 38% this year, while use of customer reviews/ratings went up from 44% to 57%. Integrating Share this/Facebook/ Tweet this increased from 32% to 42%. What’s not so hot anymore? Surveys and polls fell from 28% in 2010 to 20% this year, while use of forums tumbled from 24% to 13%. It’s likely that merchants are finding that these functions are time consuming to manage but deliver only a minimal payoff. Trend #4 Print isn’t just about catalogs. With the cost of catalog postage and paper constantly on the rise, merchants are looking at other print products to reach customers and prospects. The percentage of Outlook respondents who have tried postcards in the past 12 months increased from 46% to 50% this year, while the percentage that used fliers surged from 30% to 40%. What’s more, the respondents who plan to use fliers in the next 12 months went up from 34% to 40% in 2011. It could be that merchants view fliers selling a few products as a cost-effective compromise between a postcard and a full catalog. What’s not working so well in terms of noncatalog print? Direct mail, apparently. The percentage planning to use direct mail in the next 12 months fell from 22% in 2010 to just 8% this year. 32 Fliers Solo mailers 26.4% Direct mail 28.0% 2011 38.1% 39.2% 28.8% 30.4% 30.4% Postcards 40.3% 2010 50.4% 46.4% Print formats (other than catalogs) merchants have used to cut costs in the past 12 months Have not tried any other formats MULTICHANNELMERCHANT.COM/APRIL2011 Trend #5 everybody loves email. The most valuable online strategy is email, with a rating of 8.32 on a scale of 1 to 10. (The next most valuable strategy was SEO, with a 7.62, followed by social media with a 5.99.) Further, 61% plan to increase their marketing spending on email this year, while 33% will keep it the same and 2% will decrease spending on email. And if respondents had more money in their marketing budget, 47% said they would invest in upgrading their email programs, making this area the top target for any additional funds. But just 36% of the total respondents are using trigger emails such as birthday messages or abandoned cart reminders—this should be higher. Consumer merchants are more likely to deploy trigger emails—41% do vs. 30% of b-to-b respondents. And larger companies are more likely to be doing triggers vs. small: Nearly half (49%) of those with sales of more than $50 million In what social media outlets does your company maintain an active presence? Facebook Twitter MySpace LinkedIn YouTube Flickr Niche network Company blog None 2010 70% 57% 12% 33% 30% 5% 7% 29% 19% 2011 78% 58% 12% 23% 36% 9% 4% 31% 16% have trigger email programs, compared to 22% of respondents with sales of less than $1 million. But the other half of the larger respondents (and the 78% of smallest merchants) are missing a huge opportunity by ignoring trigger email programs. METHODOLOGY On Dec. 9, 2010, an email invitation was sent out from the editor of Multichannel Merchant to subscribers to the print publication. As an incentive to participate, survey respondents were offered the opportunity to win one of four $50 Amazon gift certificates. Subsequent mailings were sent to subscribers of the MCM Weekly, I-Merchant and O+F Advisor e-newsletters, as well as to select members of the American Catalog Mailers Association and of the NEMOA trade organization. By Feb. 15, 2011, 753 responses had been received. Of those, 597 (79.3%) indicated that their company marketed products directly to consumers and/or businesses through a print catalog and/or e-commerce website. Those active respondents form the basis of the results of the survey. Trend #6 Social media is not that satisfying. Social media is perhaps not all it was cracked up to be. In rating their satisfaction with their company’s social media efforts, respondents who are extremely satisfied fell from 12% to 9%, and those who are somewhat satisfied slipped from 62% to 53%. Meanwhile, those respondents who are not very satisfied with social went up from 19% in 2010 to 28% this year, and the percentage who are not at all satisfied crept up from 7% to 11%. Why has the love affair with social media cooled? Part of this may be managing expectations—social media was touted as the next big thing in 2008-2009, so merchants surveyed early last year who were getting underway with social may have been more hopeful about what it would do for their business. Social media is also incredibly time consuming, which many merchants started to realize in the past year. Plus, direct marketers like to measure things, and determining the return on investment in social media is proving to be difficult—if not impossible—to do. l operAtions & FulFillment Packaging options abound A look At new And noteworthy pAcking mAteriAl products By Jim tierney T he packing material you select for your order packages not only protects your merchandise from damage, it also says something about your brand. Packaging can make your products or company seem more (or less) upscale, modern, green and so on. So selecting a material that works well, is cost-effective and suits your brand is no small task. What’s new in product packaging? Manufacturers and vendors are always working on better, lighter, cheaper and greener packing materials to protect customer orders. These are just a few of the new packaging and dunnage options. Packaging to get more media savvy? The lowly shipping box could be getting a whole lot smarter. Some industries are using media enhanced packaging that superimposes a digital code onto a carton’s graphics. Customers can scan the codes with mobile devices to receive more information about a company or a product. Catalent Pharma Solutions, a packaging systems provider to the pharmaceutical, biotechnology and consumer healthcare industries, last fall introduced its media enhanced packaging. Using mobile visual search software from Digimarc Corp., the technology embeds an imperceptible digital watermark in a package’s artwork. The image has no impact on the package graphics, and can be read by a smartphone or other web-enabled device. When a user scans the watermark with a smartphone scan, he or she is taken to a website that can provide more information about the product, a video, an instant coupon or a loyalty program tie-in. What’s more, a link to a product insert or medication guide may eliminate the need to print this information.—JT FastWrap Automated Packaging Systems, which specializes in bag packaging systems, in February unveiled the FastWrap product. Equipped with a portable, benchtop unit that produces bubble wrap on demand, this product reduces storage costs for large, bulky rolls of prefilled protective wrapping material by producing the material as needed right at the packing station. 34 FastWrap’s compact, quiet unit includes an all-electric design that operates in semiautomatic or manual modes at a speed of 55 ft. per minute. Pricing for FastWrap was not available, but Chris Rempe, senior product manager at Automated Packaging, says FastWrap units are sold with a material purchase contract that varies based on usage. AirPouch Also new from Automated Packaging Systems is the AirPouch FastWrap system, which uses high-yield boxes of flat, preformed bubble material. When inflated, these compact boxes of material produce 1,385 linear ft. of cellular cushioning wrap—roughly equivalent to five and a half rolls of bundled bubble product. A patent-pending honeycomb pattern allows air transfer between the cells of the wrap for maximum product protection. The FastWrap system can also produce full-length tubes to accommodate protective packaging applications. Autofulfillment SPrint System Automated Packaging Systems also introduced the Autofulfillment SPrint system—a high-productivity bag-packaging system for mail order operations. This system can be customized for apparel, healthcare items, hardware—anything that can be shipped in a poly bag. You can integrate the Autofulfillment SPrint with warehouse management or order entry systems to print and insert order paperwork once an SKU, license plate number or unique barcode has been scanned. This system will print, insert, seal and package up to 15 completed bags per minute with a single operator. You can also use optional infeeds and sorters to deliver catalogs, literature or other promotional items to the packer for hand inserting into the bag. An inline printer automatically produces the packing slip, invoice, return label and other printed information, while a three-point scanning verification system ensures accuracy. The Autofulfillment SPrint system is targeted to medium to large fulfillment centers, primarily those that handle apparel, says product manager Jim McFarland. Unit pricing depends on the volume of materials used, he says. Korrvu Hybrid Packaging Sealed Air in August released a new variation of its Korrvu suspension and retention packaging that combines the aspects of both formats into MULTICHANNELMERCHANT.COM/APRIL2011 a third new hybrid category. The new patent-pending Korrvu hybrid package design looks like Korrvu retention packaging, but the company says it gives the superior performance benefit of Korrvu suspension packaging. For instance, the Korrvu Hybrid package uses a proprietary retention frame and elastomeric film to hold the items securely in place during shipment. When the side flaps of the corrugated retention frame are folded up, this loosens the resilient film, creating an insertion pocket in which the order packer places the item. When the flaps are folded down, the film—which is attached to the corrugated frame—stretches over the product and holds it securely in place. The hybrid package holds the item securely in the airspace of the shipping container and away from the sides of the box. This new design works well for electronics such as cell phones, cameras and laptops. Although the company didn’t provide specifics, Sealed Air claims the hybrid design is less expensive compared to suspension packaging because fewer steps are required in the manufacturing and assembly process. Instapak RC45 Foam Sealed Air, which received Forest Stewardship Council chain of custody certification and Sustainable Forestry Initiative chain of custody certification for several products, in February released Instapak RC45 foam. This provides users with a plant-based, renewablecontent packaging foam that is simple to use and works well for light-duty packaging applications. Instapak RC45 contains 25% renewable content in the finished foam product. This provides further reduction in the use of petroleum-based raw materials. Sealed Air spokesperson Anne Standley says pricing for Instapak RC45 foam depends on application and cushion size. Kold-To-Go Thermal Insulated Pouches Coldkeepers, the first packaging company to introduce thermal insulated bags in the U.S. and the only North American manufacturer of thermal insulated bags and pouches, in April 2010 unveiled KOLD-TO-GO Thermal Insulated Pouches. This new insulated pouch uses patented three-ply technology to keep the contents of the reusable, recyclable bags hot or cold for hours. It also prevents freezer burn. ● Cut the Trash Talk! Add a BloApCo Shredder above your baler and stop complaining about your Trash Line. BloApCo warehouse shredders greatly expand disposal capacity and: V Eliminate jams and ensure your production area is always clear of OCC V Increase bale density and lower your haul-away costs V Save energy and improve your environment with quiet, low HP, low dust performance www.bloapco.com 800.959.0880 © Blower Application Company, Inc., Germantown, WI 2011 MULTICHANNELMERCHANT.COM / APRIL 2011 REDUCING SCRAP SINCE 1933 35 oPeRationS & FULFiLLMent A look at regional parcel carriers By RoB MaRtinez W hen it comes to parcel delivery, FedEx and UPS are clearly the dominant players. But you can use regional carriers to supplement the service of the Big Two. In fact, if you haven’t evaluated regionals, you might be leaving money and value on the table. Like the name implies, regional carriers serve a specific region within the U.S. These service providers are ideal for shippers with multiple distribution centers, especially if the DCs are aligned to the regionals’ delivery footprint. Regional carriers such as Eastern Connection, Lone Star Overnight, OnTrac, Spee-Dee Delivery, US Cargo and others offer reliable parcel delivery services at rates as much as 40% less than national carriers. As a result, the larger, established regional carriers have been able to cut into the national parcel market share. How have the regional carriers been able to successfully compete against formidable and deep-pocketed competitors in UPS and FedEx? Many shippers will cite overall value proposition, including cost savings, consistent service performance and innovations that make it easier to ship with regionals. What’s more, regional carriers offer multiple delivery options that offer many benefits—including lower cost, flexibility and, in many cases, better service. As a result of lower operating costs, regionals can often pass along to customers savings of 10% to 40% over UPS and FedEx pricing. Most regional carriers transport packages via truck hubs instead of airlines. Trucking can be as little as 10% of air costs. As a result of lower operating costs, regionals can often pass along to customers savings of 10% to 40% over UPS and FedEx pricing. Most regional carriers transport pack- 36 n Expanded next-day delivery footprint Since regionals concentrate operations in a well-defined geographic market, service to that market is often better than what the national carriers provide. For example, Eastern Connection handles East Coast deliveries from Maine to Virginia, all included as Zone 2. The same coverage with UPS and FedEx extends to five zones. Many shippers find the wider next-day delivery footprint offered by regionals a competitive advantage. Imagine if you could offer your customers next-day delivery at a lower cost than what a competitor that charges for a three-day delivery. Moreover, the regional approach often means later pickup times and earlier deliveries than the standard 10:30 a.m. service, improving both productivity and customer satisfaction. n Flexibility Some shippers, frustrated with few national alternatives, report that regionals are not so much earning their MULTICHANNELMERCHANT.COM/APRIL2011 Illustrations: Peter Hoey Lower cost ages via truck hubs instead of airlines. Trucking can be as little as 10% of air costs. Regional carrier pricing and contracts tend to be simpler and easier to understand than the national carriers. Most regionals have fewer accessorial charges than the nationals. For example, many regionals do not assess delivery area surcharges, which are additional charges of $1.85 to $3 per package based on “rural” zip codes and affect 20% to 25% of all FedEx and UPS deliveries. Shippers that have a high concentration of customers in a particular market should consider regional carriers in conjunction with less-than-truckload services. As an example, a shipper in St. Louis could take all its West Coast-bound shipments, truck via LTL to OnTrac’s hub in Reno, NV, and receive three- to four-day transit from the Canadian border to the Mexican border (Bellingham, WA, all the way down to Yuma, AZ). From Reno, that’s guaranteed next day delivery at Ground rates to a population of 50 million consumers. Finally, many shippers leverage regional carriers to lower pricing with the national carriers. Competition enhances leverage, which is essential in any negotiation. Shippers may also feel more comfortable not putting all their eggs in one basket. business as FedEx and UPS are losing their business. Shippers in a recent national survey cited annual rate increases, hidden “accessorial” charges, complex contracts, arrogant sales reps, invoice errors and poor claims processes as their top frustrations with FedEx and UPS. Getting the nationals to be flexible can be a frustrating experience—even for multimillion dollar shippers. Merchants that make the switch to regionals often see a greater degree of customer service and accommodation. As one shipper recently told me: “After getting very little attention from the national carriers, I now feel like a big fish in a small pond with my regional carrier.” n Other benefits There are many other potential benefits to working with regional carriers. By bypassing national and multiple regional hubs, service can be more reliable in inclement weather. Some shippers reported lower damage rates with regionals, the result of reduced package handling. Regionals can often offer special services or make it easier to ship certain products like hazardous materials. Exploring regional carrier capabilities and options There are hundreds of regional parcel carriers, couriers and messenger companies. Not all regionals are qualitatively equal, and there certainly are downside risks to carefully consider. First, consider the challenges of multisourcing. Relatively few shippers have 100% of their customers within a single regional carrier’s delivery footprint. So the majority of shippers will need to continue to use national and potentially other regional carriers. That means multiple vendors to manage, different tracking systems, additional integration points, and so on. Moreover, some of the smaller regional players may not have the support of parcel software vendors. Be sure to confirm that your manifesting system fully supports a regional before investing too much effort exploring it for your distribution. Carefully review each regional carrier’s technology, tracking tools, web-based shipping systems, manifesting equipment, service coverage and transit guarantees. Few regionals have deep pockets to invest in infrastructure, technology, continuous improvement programs, etc., and find it hard to compete with the Big Two. You’ll also need to confirm the financial stability of the company. While many of the larger regional carriers have been in business for decades, there are numerous examples of regionals (and national carriers) going out of business. FedEx and UPS have spent hundreds of millions of dollars developing brand and market awareness. Many regionals lack name brand recognition, a concern for some shippers that connect customer experience and “image.” Many regional carrier drivers are independent contractors. Drivers at the smaller players, in particular, are not always uniformed, and vehicles may not be decaled. Again, a potential concern for shippers concerned about losing credibility over image. Earlier, I mentioned that regionals might have an advantage in the event of inclement weather. Of course, the opposite is potentially true as well. If weather or other “acts of God” impair a regional’s ability to deliver packages, theoretically, shippers stand the risk of 100% of shipments missing service commitments. Finally, many FedEx agreements and nearly all UPS contracts penalize shippers for diverting shipments to another carrier. If too much volume is bled to regional carriers, shippers stand the risk of losing discounts with the national carriers. Of course, that’s exactly why FedEx and UPS build volume commitments into incentive programs. Shippers get locked in to a single carrier and are discouraged from looking at alternatives. Did you ever notice that additional incentives to hit higher revenue tiers are generally insignificant, while retracting to lower revenue tiers results in a significant loss of incentives? Shippers need to understand that revenue thresholds, like incentives, accessorial concessions, etc., are negotiable. Refuse to be a rat stuck in the wheel of higher revenue thresholds. Give nationals and carriers the shipments that best meet your overall business needs, and negotiate achievable revenue thresholds. Now is the time to evaluate regional carriers. Regionals can help shippers reduce costs, increase productivity and improve delivery times; and they can provide a competitive advantage. If you are unsure if regionals are for you, a number of industry resources, including third-party logistics providers and consultants, can evaluate your distribution and make recommendations as to whether regional carriers offer some benefit. Good luck! l Regional alliances foR national coveRage An important industry development is the formation of “superregional networks.” By forming strategic alliances with integrated software and package tracking, shippers can take advantage of coast-to-coast coverage in an arrangement that is transparent to customers. The carriers within a regional parcel alliance, modeled in a similar way as recent LTL regional alliances, use a standard technology platform to control package custody from one carrier to another, and transmit online package status data to customers. One such regional alliance is being formed between Eastern Connection, OnTrac, Spee-Dee, Lone Star, Skyline, TransTek and U.S. Cargo. Any of these companies can provide additional information about the alliance.—RM Rob Martinez (rob@shipware.com) is president/CEO of shipping consultancy Shipware Systems Corp. MULTICHANNELMERCHANT.COM/APRIL2011 37 OPERATIONS & FULFILLMENT everage barcode technology How to: BY CURT BARRY ✔Fast, accurate data capture reduces paperwork, errors and labor costs: Barcode data capture and positive confir- B arcoding technology can help streamline processes and reduce costs in warehouse fulfillment operations. But in many cases, even large multichannel merchants only scratch the surface when it comes to leveraging barcodes. Most merchants use barcoding for shipping labels and generating manifests, and some use it to identify bin and slot locations. But to gain maximum benefit, you need to fully incorporate this technology to control inventory and track labor use within the entire warehouse. It’s possible to implement the full range of barcode applications all at once or when you install a warehouse FULL RANGE OF BARCODING APPLICATIONS •Receiving: accurate capture of pallets/cartons received on the dock •Put-away move: confirmation/updating of product bin/slot locations •Replenishment move: confirmation/updating of inventory move to forward picking •Pick confirmation: from bin and slot to customer order or pick document •Pack verify: confirmation/ updating of customer order QA accuracy •Shipping: creation of shipping manifests and updating of customer service systems with charges and dates •Returns processing: for both customer files and inventory disposition systems •Value-added services: such as kitting work orders and personalization transactions •Inventory control functions: including cycle counting, reduction or elimination of financial/ physical inventories and aisle-mapping •Integration with other technologies: such as voice technology in receiving and picking, pick-to-light for highvolume operations, and programs that automatically sort products and packages into lanes •Productivity tracking: for both departments and individuals •Fixed asset tracking: throughout the warehouse and total company •Packaging material tracking: including size of cartons, for warehouse space optimization •Capturing transactions/ functions: including purchase orders, picking document confirmation, pack verification and returns management system (WMS). And quite a few warehouses do take that “big bang” approach. But for many others, it’s more financially and logistically feasible to realize the benefits by phasing in barcode technology: starting with the basics and adding more advanced applications over time. What can effective barcoding do for your operation? Here are just a few of the benefits. 38 mation of transactions significantly cut down on mistakes as compared with manual keying systems in receiving, putaway, replenishment, picking, inventory control and other functions. Plus, they eliminate manual clerical time for writing, controlling and entering transactions into the system. ✔Timely information: While not all barcode systems or functions are updated online in real time, even shortinterval batch updates make data available faster. With the support of information systems, timely reports showing product receiving, labor hours by function, cycle counting and other important purposes are readily accessible. ✔Productivity measurement: The ability to track individual and department performance and post individual results enhances productivity. ✔Reduced training time: Training for using barcoding is often easier and less time consuming because the processes are streamlined and defined in accordance with the warehouse’s standard operating procedures and overall best practices. The process standardization and discipline required to implement barcoding is another major benefit. ✔Better decision making: Barcode-driven systems can help standardize how department managers plan and control work. They eliminate or minimize individual manager lags in updating data and the confusion caused by individual data collection methods. The result is having the most accurate, complete and timely data possible to make well-informed decisions. The box to the left shows the range of barcoding applications possible within a typical warehouse. You must assess the benefits as part of a detailed cost/ benefit/ROI study before investing in barcoding. While most warehouses can gain logistical and labor advantages and savings from the full range of applications, the ROI may not pan out for those that handle relatively few items and orders. PHASED IMPLEMENTATION: A ROADMAP There are three core stages to consider when you are planning a phased-in barcode technology approach: 1. Basics: shipping and inventory location control Shipping: Generally, implementation begins with using barcode shipping labels for package deliveries, assigning MULTICHANNELMERCHANT.COM / APRIL 2011 continued on page 40 What happens when your business starts to grow? DYMO Endicia moves your business forward. IT’S TIME TO START SHIPPING WITH DYMO ENDICIA. By partnering with DYMO Endicia for all your shipping needs, customers from Montana to Monaco will appreciate online package tracking and pre-paid return labels, keeping you free to focus on what’s really important. WIN AN iPad® PRODUCT FOR TELLING US YOUR STORY. “I wouldn’t sell on eBay without it.” — Charlene A., eBay seller Imagine checking the status of your shipments online at endicia.com on your new iPad® Product. Go to dymoendiciaforward.com and tell us how you grew your business. Every month, we will be selecting a winner and posting their story for everyone to see. Learn more at dymoendiciaforward.com © 2011, DYMO Endicia, a Newell Rubbermaid Brand. All rights reserved. All other trademarks are trademarks or registered trademarks of their respective owners. The Eagle logo, U.S. Postal Service®, Post Office™, PC Postage® and the PC Postage logo are among the many trademarks of the United States Postal Service. OPERATIONS & FULFILLMENT continued from page 38 orders with tracking numbers. Some warehouses determine and print the shipping label at the scale in the shipping area during the picking/scan process. This scan can also be used to initiate the back-end rate shopping process and create shipping manifests. Inventory location control: The most common use of barcoded locations by multichannel merchants occurs within the picking and reserve areas. But the potentially largest benefit of a location system is to provide tracking capabilities within the entire facility for the most efficient overall inventory management process. To do this, you have to assign all storage locations and functions with discrete barcode identifications. This includes not just pallet racking and shelving locations, but all locations within the receiving and shipping docks and staging areas, as well as return processing functions. If the warehouse has value-added or production/assembly areas, assign those barcodes as necessary to track and process inventory. The ability to scan locations and associate inventory to them helps with both real-time tracking and cycle counting processes. You can also confirm the completion of system-directed inventory moves between locations or functions, such as put-away, replenishment and picking. 2. Tracking products throughout DC processes As important as location barcode IDs are, to fully leverage barcode technology, you also need to have barcodes on the products. This can be done at the individual unit level, as inner pack designations, or at the carton or pallet levels, and it may require vendor compliance changes in the supply chain. These barcodes include information tying items to the data about them that is housed in the item master file, and so they are key to associating specific items with a location or warehouse activity. Barcodes on products make it possible to improve control of receiving, put-away, picking, replenishment, pack verification, value-added services, shipping, inventory taking, aisle mapping and returns processing. Many warehouses also use barcodes on various operational documents. Basic uses here include purchase orders, quality control checks, pick tickets and returns documents. 3. People productivity The most complex use of barcode technology is tying individual warehouse workers to specific activities and time spent on completing those activities. This provides the infrastructure that enables warehouses to 40 track, record and post individual productivity statistics. Warehouses with this capability generally have a higher level of overall productivity. This application level involves using a time- and activity-keeping device like Kronos or a workstation concept that ties in with individual staff barcode IDs. It also requires setting productivity rates and standards for use in productivity reporting and labor budgeting. Many companies use barcoding time-clock tie-in capabilities for payroll only. By not taking them to the level of productivity tracking and reporting, these companies are likely missing out on substantial benefits. OTHER FACTORS TO CONSIDER Before making any final investment decisions, assess the barcode technology requirements you will need to enable use of advanced technologies such as pick-to-light and voice picking. Evaluate the costs vs. estimated financial benefits. If the warehouse is not currently handling individual selling units barcoded by the manufacturer, the units must be relabeled in the warehouse. This can be costly. Having vendors or manufacturers apply barcode labels requires some type of vendor compliance process. Implementing and maintaining that process are potentially staff- and time-consuming tasks. What’s more, labeling all locations with barcode labels can also be time consuming and expensive. Don’t assume that this will happen easily or quickly. And finally, take into account the implementation tasks, training and culture shift that barcoding technologies may require in your operation. For instance, if your center relies on “tribal knowledge” to know where products are located rather than barcoded bin/slot locations, anticipate and train to overcome resistance and problems with picking, inventory, put-away and other functions. Remember that implementing too many operational changes simultaneously can be dangerous without ample preparation and training. Years ago, one large multichannel retailer assumed it could take its first barcode inventory to initialize the inventory for a WMS being simultaneously implemented. The inventory process and reticketing were disastrous, and the WMS implementation failed. When barcode technology is implemented or expanded correctly, though, the tracking and more efficient use of direct labor can greatly improve efficiency and productivity and reduce costs. ● Curt Barry (cbarry@fcbco.com) is president of F. Curtis Barry & Co., a multichannel operations and fulfillment consulting firm. MULTICHANNELMERCHANT.COM / APRIL 2011 MCM/B-TO-G Should you be selling to the government now? By Mark aMTOwer I f you have heard me speak anywhere in the past 20 years, you’ve heard me singing the praises of doing business with the government. Business-to-government has been my focus for going on 30 years: There are products to be sold to and money to be made from this market. The government buys every legitimate business product and service imaginable. But not every merchant should be in the government market. In my new book Selling to the Government, I outline a theory that has evolved over the years I have been doing B-to-G. It is my 95-4-1 theory, sort of a variation on the Pareto Principle (better known as the 80-20 rule). 95% of the people out there are happy with who they are and what they currently know. They assume that by some form of osmosis, proximity to thought and action, they will learn whatever else they might need. Possible, but not likely. 4% of the people out there take some action on a regular basis to become better at what they do. They attend seminars, buy books, get the trade publications, go to events and join associations. Proactive and good, but maybe not quite enough. 1% of the people out there take more aggressive action frequently. They go to seminars and perhaps speak at them as well. They not only buy books, they read them. When they join associations, it is to participate and share with peers. Where does your company fit in? Are you really ready to tap the government market? • • • Time and money required More than 90% of the companies that enter the government market will be gone within the first year. Why? Poor planning, unrealistic expectations, lack of a plan or lack of execution on the plan, or perhaps not devoting sufficient resources to the effort. I have seen a few that simply would not adapt to the way that government does business. These companies seemed to think government might change for them. Regardless of why they leave, they will blame just about anything but themselves. A three-part research report from American Express OPEN last year found that it took an average of 19 months for a company to win any business when entering the government market. The study also found that the average business spent $89,000 per year to enter the government market successfully. The $89,000 is a combination of internal and external resources. There are not many businesses willing to put in that kind of time and money to try to enter a new market. But those companies that have successfully entered new markets know that this is a necessary investment. So where does that leave you? If you are serious about Training vs. hiring a governmenT sales Team So you’ve decided to sell your products to the government. Among the many considerations, you have to determine who is actually going to do the selling to this market for your company. Do your train your salespeople on the nuances of selling to the government, or do you hire some experienced government salespeople and train them on your product line? Often it is easier for merchants to hire talented salespeople than to train the folks you already have on staff. Part of the decision process here is that if you are targeting specific government agencies, you may be able to hire an experienced salesperson with relationships in place in that targeted agency. This significantly shortens the sales cycle.—MA doing business with the government, you should know that, like any other market, it requires upfront research. 4Does the government buy what you sell? If so, what kinds of contracts are required and who are the major competitors? You may not be surprised to see a few of the “usual suspects” as competitors, but you’ll find some companies that only do B-to-G—and do it quite well. 4What resources would it take to make you successful in the government market? There are legal and accounting differences that will require management attention, and there will be other issues as well. 4You also have to consider the scale of the market. There are 89,000 governments in the U.S., including all the counties, municipalities, townships, states, special districts, school districts and more. The size alone can be intimidating, until you narrow it down to your niche. If you have the staying power, if you do the research, develop a realistic plan and intelligently execute it, you have a real chance. And the federal, state and local governments, plus education market, according to research firm Onvia, represent more than 40% of the GDP. It’s the biggest market out there, it has the most money, and it pays its bills. l MULTICHANNELMERCHANT.COM/APRIL2011 Mark Amtower is senior partner at Amtower & Co. and author of Selling to the Government. You can find him at www.FederalDirect.net. 41 marketplace Look to Marketplace first... any time you need to find ideas and solutions, increase productivity, cut costs and become more competitive. To advertise in multichannelmerchant Marketplace, contact Cynthia Foristel / 203-358-4378 / cynthia.foristel@penton.com >> Ad Mailing Lists >> Address Correction Software MELISSA DATA ................ WWW.MELISSADATA.COM ........ (800) 635-4772 >> Address Correction Software MELISSA DATA ................ 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A part of: 46 MULTICHANNELMERCHANT.COM / APRIL 2011 Advertiser index Receive supplier information fast using Multichannel Merchant Advertiser Index AdveRtIseR PAge Ability Commerce Automated Packaging b&w Press blower Application Company Celerant direct Marketing Association direct Media Millard dYMo endicia Fedex smartPost Japs-olson Meritdirect newPage Corporation Ripon Printers william-neil Associates 11 25 18 35 17 20 C3 39 C4 22 3 C2 6 21 Phone websIte 561-330-3151 888-288-6224 877-246-3467 800-959-0880 877-811-8500 212-768-7277 402-836-5695 800-576-3279 www.abilitycommerce.com www.autobag.com/shipping www.bwpress.com www.bloapco.com www.celerant.com www.allforoneshow.org www.dmminfo.com/marketinggenetics.aspx www.dymoendiciaforward.com www.fedex.com/us/smartpost www.japsolson.com www.meritdirect.com www.newPageReachsell.com/mcm www.riponprinters.com www.william-neil.com 952-932-9393 914-368-1000 877-855-7243 800-321-3136 800-846-8902 Take the guess work out of your next marketing initiative. As one of the largest business-to-business media companies in the world with expertise in 16 industries, Penton’s in-depth industry knowledge and expert market analysis will help you deliver the ROI that your marketing efforts require. Contact Penton Custom Solutions to talk with a Marketing Consultant: Joel Frazier (312) 840-8423 • joel.frazier@penton.com Amanda Wegryn (216) 931-9768 • amanda.wegryn@penton.com Learn how to implement one of these business building programs: white papers | eBooks | microsites | webinars | virtual tradeshows | supplements | custom magazines | research | list rental | reprints MULTICHANNELMERCHANT.COM / APRIL 2011 47 backword ECOMMERCE Collage Video Apparel, Sales Under $20 Million: Filson (filson.com) (collagevideo.com) Country Walkers (countrywalkers.com) Consumer Specialty Products, Sales Over $20 Million: Army and Air Force Exchange Service Exchange Store Online (shop.aafes.com) eBags.com (ebags.com) Folica (folica.com) Business Specialty Products: Musician’s Friend (musiciansfriend.com) Bizfilings (bizfilings.com) Envelopes.com (envelopes.com) Really Good Stuff (reallygoodstuff.com) Shoes For Crews (shoesforcrews.com) General Merchandise: Apparel, Sales Over $20 Million: Express (express.com) L.L. Bean Signature (llbeansignature.com) The Orvis Co. (orvis.com) Children’s Products: Fat Brain Toys (fatbraintoys.com) One Step Ahead (onestepahead.com) Computer and High-Tech Equipment and Software: Black Box Network Services (blackbox.com) Crutchfield (crutchfield.com) L.L. Bean (llbean.com) Miles Kimball (mileskimball.com) Sears Holdings Corp. (sears.com) Gifts, Sales Over $20 Million: Harry & David (harryanddavid.com) Home, Hardware and Gardening Products: Cuddledown (cuddledown.com) Consumer Specialty Products, The Pond Guy (thepondguy.com) Sales Under $20 Million: Sporting Goods and Hobbies: BBC Worldwide Americas (bbcamericashop.com) Beretta (beretta.com) Century Novelty Skis.com (skis.com) (centurynovelty.com) The Golf Warehouse (tgw.com) Multichannel Merchant last month announced the finalists in the 26th annual MCM Awards competition. The judging panel named 47 print catalog finalists and 29 ecommerce finalists. The Gold and Silver Award winners will be announced May 4 at a special luncheon during the MCM Live program in New York. (To learn more about the MCM Live program, visit multichannelmerchant.com/mcmlive.) PRINT Apparel, Sales Under $20 Million: Beretta, Holiday 2010; Filson, August 2010; Westport Big & Tall, Autumn 2010 Apparel, Sales Over $20 Million: Boston Proper, Holiday 2010; L.L. Bean, Christmas Gifts 2010; The Orvis Co., Fall Hunting 2010 Business Specialty Products: Action Bag Co., Eco-Elegant!, Spring 2010; Baudville, Spring 2010; Harry & David, Corporate Gifts 2010; Shoes For Crews, Winter 2011 Holiday; The Orvis Co., Fall Dog 2010; Vitacost.com, Healthy Living Go Organic!, Summer 2010 Gifts, Sales Under $20 Million: Food: Hickory Farms, Holiday 2010; L.L. Bean, Christmas 2010; Sundance, Holiday Jewelry & Gift 2010; The Orvis Co., Gifts for Men, Holiday 2010 Fairytale Brownies, Christmas 2010; Harry & David, Harvest 2010; Hickory Farms, 2010 Holiday Catalog; Jack Stack Barbecue, Holiday 2010; La Tienda – The Best of Spain, Fall 2010; Schwan’s Home Service Catalog, Holiday 2010; VitalChoice Wild Seafood & Organics, Holiday 2010 Gifts, Sales Over $20 Million: Home, Hardware and Gardening Products: Cuddledown, Fall 2010; The Pond Guy, Late Spring 2010 Industrial Supplies/MRO: New Pig, The Big Pigalog, 2011; WESCO Sustainable Energy Guide 2010 Sporting Goods and Hobbies: Children’s Products: Army and Air Force Exchange Service, Kids Exchange 2010, Fall/ Winter; Chelsea & Scott, One Step Ahead, Spring 2010; Fat Brain Toys, Holiday 2010; Hanna Andersson, Holiday 2010 Army and Air Force Exchange Service, Fitness 2010; L.L. Bean, Summer Outdoor 2010; Performance Bicycle, April 2010; The Orvis Co., Holiday Sporting Gifts 2010 Computer and High-Tech Equipment and Software: L.L. Bean, Holiday Web 2010; VitalChoice Wild Seafood & Organics, Fall 2010/Winter 2011 Traffic Driver: Crutchfield, July/August 2010; Hewlett-Packard, HP Business, August 2010 Consumer Specialty Products, Sales Under $20 Million: Country Walkers 2011; Pictureframes.com, Holiday 2010 Consumer Specialty Products, Sales Over $20 Million: 48 GaelSong, Early Autumn 2010 Educational Insights, Full Line 2010; Murad, Love is in the Air, Spring 2010; Musician’s Friend, Holiday Gift Guide, November 2010; Sears Holdings, America’s Tool Headquarters, 2010 LET’S HEAR FROM YOU! Let us know how we’re doing. Send us any comments on recent articles or issues, or perhaps a multichannel shopping tale you’d like to share. HOW TO CONTACT US: E-mail: melissa.dowling@ penton.com Phone: 203-358-9900 Fax: 203-358-5823 Letter: 11 River Bend Drive South, Stamford, CT 06907 Top Five Reasons to make Marketing Genetics a part of your growth strategy. 1. Large data pool of responsive buyer (RFM) data 2. Custom analytics 3. Reactivation 4. Data appends—optimize your house or prospect files 5. Affordable pricing And... Marketing Genetics is open to all categories of users—even Catalogs! Whether you are looking to expand your prospect universe, re-activate lapsed housefiles, or create your own private prospecting base, our team of experts can help you. By combining our deep understanding of direct marketing and industry experience with proven analytical/segmentation techniques, we will work with you to handcraft a solution that is uniquely yours. 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