Macy's Wraps Up New Gifts Catalog
The retailer may still be an infant in the catalog world - only 15 months old - but it was able to buy itself deep resources and mail-order savvy when it acquired Fingerhut in March, which gave it hard-to-duplicate fulfillment infrastructure as well as database marketing prowess. It also gained access to Fingerhut's database of 30 million moderate-income names. The gift catalog grew out of the better-than-forecasted performance of that category in its 1998 holiday book and the 141-year-old retailer's reputation as a gift source.
"We're trying to leverage off of many of Macy's strengths," said Ron Ramseyer, president/CEO of Macy's by Mail. "One of its key strengths is year-round gifts for men, women and home."
The gift merchandise has been developed in its core catalog over the past year, including dedicated sections in the book. Holiday 1999 also for the first time displayed four pages of unusual gift items such as "A Taste of NY," featuring freshly baked H&H bagels delivered anywhere in the United States. And the last two pages offer a one-year "dessert of the month" package and a "flowers by the month" gift offered through a new partnership with 10-year-old PC Flowers and Gifts, an online florist in which Fingerhut has a 40 percent stake.
Gifts is the first of its aggressive expansion into other specialty catalog segments planned over the next 12 months.
"We use our base catalogs to test any concepts because they have the broadest circulation and give the biggest test ground," Ramseyer said. "We learn not only what works best but also who to send specialty catalog offerings to."
Macy's by Mail uses 40,000 different source codes to measure its customers' buying behavior. Fingerhut's statistical modeling experts help them use that information to improve response, which in some cases has been as much as 20 percent, according to Ramseyer.
Thirty catalog mailings went out this year to an estimated 20 million customers and prospects, although Ramseyer would not confirm the circulation figure. In addition to the core book - which includes women's apparel and accessories, men's, home and the new gift catalog - Macy's introduced the "Best of" catalog, which features best-selling products and sale offerings, and a home catalog, which features bed and bath accessories and decorative items.
Future spinoff specialty catalogs may include furniture, women's plus-size apparel, hard-to-find shoe sizes and seasonal clothing, all of which are testing in the main catalog next year. Expanding into other rooms in the home is a key priority.
"We've been very strong in bed and bath areas, and now we're moving into the public rooms," Ramseyer said. "In March, we're moving into furniture for the first time in the catalog."
The furniture will include sofas, chairs, coffee tables and bookcases. Home items are expected to produce 50 percent of total Macy's By Mail catalog sales next year.
Since its catalog expansion plans are so aggressive, areas of the catalog that have underperformed will be scaled back significantly. One area that has been identified is men's.
"We have so many things on our plate, so we want to concentrate on those areas the customers are taking us to first," Ramseyer said. "We just don't have the organization and the resources to develop that business. We're much further ahead in the women's area and the home area, so that's where we're going to focus our expertise."