6Trends - Nxtbook Media

Transcription

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
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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, [email protected]
SeniorWriter
Tim Parry, [email protected]
SeniorWriter
Jim Tierney, [email protected]
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, [email protected]
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, [email protected]
GroupArtDirector
Katherine DiMarco, [email protected]
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, [email protected]
SalesandMarketingSpecialists
William Camaraza, [email protected]
Candice Hadley, [email protected]
Elizabeth O’Connor, [email protected]
ProductionCoordinator
Lauren Loya, [email protected]
SeniorAudienceDevelopmentDirector
Jennifer Shumar, [email protected]
AudienceMarketingManager
Diane Sontag, [email protected]
ClassifiedProductionCoordinator
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ResourceSalesAssociate
Cynthia Foristel, [email protected]
ListRental
Marie Briganti, [email protected]
Reprints/PermissionSales
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ChiefExecutiveOfficer
Sharon Rowlands, [email protected]
ChiefFinancialOfficer
Nicola Allais, [email protected]
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
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MULTICHANNELMERCHANT.COM/APRIL2011
PrintedintheU.S.A.
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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
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merchants are looking to seize the moment when consumer and
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from our editors shows how they are planning to do this.
2011 MARKETING OUTLOOK REPORT
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• Hiring and investments planned for 2011
• Essential marketing metrics
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• Plans for loyalty programs
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2011 CATALOG OUTLOOK REPORT
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• 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
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• How merchants are going mobile
• Social media strategies and measurements
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• 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
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
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
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 ([email protected]) is
president/executive director of the industry group American
Catalog Mailers Association.
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
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.
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:
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
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
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! ●
17
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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.
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
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4. big scAle on A nArroW pAge
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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.”
21
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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.
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
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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-
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:
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.
Can you keep up with me?
One of Amazon.com’s biggest hits
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.
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-
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
Philippe Graner
([email protected])
is director of marketing
strategy and Ken Lane
([email protected])
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
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
31
COVER STORY
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
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
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
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
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 ([email protected]) is president/CEO of shipping
consultancy Shipware Systems Corp.
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
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OPERATIONS & FULFILLMENT
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 ([email protected]) is president of F. Curtis Barry &
Co., a multichannel operations and fulfillment consulting firm.
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
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,
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42
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43
marketplace
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45
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46
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47
backword
ECOMMERCE Collage Video
Apparel, Sales Under
$20 Million:
Filson (filson.com)
(collagevideo.com)
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(countrywalkers.com)
Consumer Specialty Products,
Sales Over $20 Million:
Army and Air Force Exchange
Service Exchange Store Online
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eBags.com (ebags.com)
Folica (folica.com)
Business Specialty Products: Musician’s Friend
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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
Sales Under $20 Million:
Country Walkers 2011;
Pictureframes.com, Holiday 2010
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.
Contact Heather Winnicki-Mateus at 402.836.5695 or
[email protected] to find out how to get
your own handcrafted models or selections!
www.dmminfo.com/marketinggenetics.aspx
Need a better customer returns
solution? Try us on for size.
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