Direct Mail Push Helps Local Merchants Compete Online

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Start-up company ValueandSave.com will drop 180,000 co-op direct mail packages next month to households with Internet access to get these households buying from local merchants online.


"We're trying to localize e-commerce," said Lavonne McIver, spokeswoman at ValueandSave of America Inc., which has offices in New York and Barbados. "It's a way to get locals to consider the local merchant as an e-commerce merchant."


ValueandSave will build and host Web pages on its site for local merchants and will offer consultation services. It also will offer loyalty programs and credit card processing for merchants that do not have a stand-alone online operation.


The co-op coupon mailer -- dubbed the Quick Click Online Value Guide -- will encourage consumers to visit the ValueandSave site, register and redeem the coupons online at the local merchant's Web page.


"This is also a way to get people who stopped buying locally to start buying locally again, but to do it online," McIver said.


To reach wired households, ValueandSave will mail to the high-tech household file from database marketing services firm Naviant, Newtown Square, PA. The file contains more than 21 million Internet-enabled users age 24 and older who earn more than $30,000 annually.


Naviant handles high-tech hardware and software warranty registrations for companies such as IBM Corp. and Hewlett-Packard. Since these registrations are performed online, the result is a database of high-tech product users who are on the Internet.


Based on Naviant's data, ValueandSave has designated 1,100 mail zones across the United States. ValueandSave will first target the New York metropolitan area, Seattle, New Jersey, Miami, Atlanta, Dallas, San Francisco and Los Angeles. In each city or state, ValueandSave will strike deals with small businesses in 720 categories, including drugstores, department stores, restaurants and auto repair shops, as well as stores that sell computers and software, books, music and groceries. On average, ValueandSave will mail offers from 36 local merchants 10 times a year to each targeted zone, with each zone consisting of about 10,000 residents.


At the ValueandSave site, visitors can place an online order at the local store's Web page and can redeem the mailed coupons. The products can either be delivered on the same day by the store or be picked up by the customer. Merchants fulfill the orders themselves.


A monthly statement will summarize all purchases and the total loyalty points earned. Consumers earn points only if they redeem coupons via the site at www.valueandsave.com.


A key feature of ValueandSave is its tracking ability. The consumer's online buying habits are recorded each time he enters a store's Web address mentioned on a coupon. Such tracking will enable personalized offers.


Among the first small New York businesses to partner with ValueandSave are Cruise Planners, Park Slope Family Chiropractic, Audrey's Hair Concepts, Flower Works, Quick Shot and Walter Silverstein, a dental surgeon.


The Quick Click Online Value Guide will play a key role in driving targeted traffic to the stores, according to Doug Knehr, president of ValueandSave.


"So right off the bat, that separates us from a Val-Pak or Super Coups or Money Mail, who mail to anyone," Knehr said. "Our mailing reaches a specific demographic."


Val-Pak and other direct marketers usually mail to 10,000 people closest to the stores whose coupons are included in the mailing, he added. These marketers do not target consumers based on Internet access.


ValueandSave will charge merchants $787 for inclusion in each mailing to a zone. It will charge $75 for targeted banner ads to 1,000 people, and 10 cents per loyalty point redeemed by the customer.


Other sources of revenue for ValueandSave include monthly Web page hosting fees and assorted e-commerce services. It will not get a cut of sales.
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