Hanna Andersson Gets Northern Exposure

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Catalog response rates are inching up, or should we say north, for apparel multichannel merchant Hanna Andersson.

During the holiday season, Hanna Andersson tested two programs in Canada, one with Canada Post BorderFree and another with Abacus Canada. The results of both have prompted the Portland, OR, company to include Canada in its marketing plans for holiday 2006.

"We've had Canadian customers almost since the beginning," said Alison Polenz, Hanna Andersson vice president of marketing. Gun Denhart founded the company in 1983 after she couldn't find the high-quality 100 percent cotton clothes she had grown up with in Sweden. Positive word of mouth about the brand's brightly colored clothing for men, women and children spread north, and soon the company was getting requests from Canadians for catalogs, Ms. Polenz said.

Hanna Andersson also has a "fairly sizable circulation" in Japan, a Japanese Web site and distribution in South Korea, England, Australia and Germany.

Then last year Canada Post BorderFree asked Hanna Andersson to participate in a mailer that listed several U.S. direct marketers and let recipients request copies of the catalogs that interested them. Hanna Andersson shipped 20,000 catalogs to Canada Post BorderFree, which fulfilled the requests it received from Canadian consumers. All 20,000 catalogs were distributed.

"We could have fulfilled twice as many," said Polly Hodson, Hanna Andersson circulation analyst.

Better yet were the response rates.

"Our response rates are very high from our Canadian customers," Ms. Polenz said, rating them around twice as high as U.S. response rates. "This goes hand in hand with research that indicates a typical Canadian household does not receive as many catalogs as a typical household in the U.S."

Hanna Andersson is just one of many midsize multichannel merchants suddenly interested in the Canadian marketplace, said Paulina Sazon, Canada Post BorderFree business marketing manager.

"A lot of big companies like Orvis have already done this," she said. "The biggest trend we see this year is that there is much more movement in the middle tier." This tier covers companies with at least $10 million in revenue.

Others that have entered the Canadian market recently with help from Canada Post BorderFree include SmartHome, Flor and Ulla Popken, Ms. Sazon said. Canada Post BorderFree can facilitate Canadian orders for U.S. retailers by managing customs and duty issues as well as handling delivery and returns of packages.

Doing business in Canada can be expensive, but merchants find it appealing for a couple reasons, Ms. Sazon said. First, the demand for U.S. products is significant, as Hanna Andersson discovered. Another reason is that U.S. merchants see it as a steppingstone to their international growth plans, with Canada being the first market they test.

In addition to expense, another roadblock retailers face entering Canada is that the "list market is in its infancy," Ms. Sazon said. Abacus entered the country last year, and Acxiom recently followed, but to date they are alone, she said.

Abacus' entry into Canada was another factor in Hanna Andersson's decision to test the country more aggressively last year, Ms. Hodson said. The company had a Canadian house file but its participation in Abacus' Canadian database has given it access to prospecting lists for the first time, she said. Last year's test "worked very well," and the company will repeat its prospecting efforts in Canada in the fall.

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