Catalogers Pull out All the Stops to Help Keep Customers Offline
Free shipping, along with other familiar offers such as gift with order and deferred payment is nothing new, but this holiday season seems to have stirred up more pull-out-all-the-stops promotions among catalogers looking to hold onto market share while e-commerce grows.
Consumers are expected to spend more than $8 billion online on holiday shopping this year, according to NFO Interactive, Greenwich, CT, a 142 percent increase over last year's $3.3 billion figure. October, November and December are most consumer catalogers' busiest months by far.
Additionally, when online buyers were asked in an NFO survey to be released next week, "Online Retail Monitor: Holiday Shopping Report," how the Internet would affect their choice of shopping channels over the next 12 months, 31 percent said they would buy less from catalogs, and only 4 percent said they would buy more from catalogs.
L.L. Bean's offer, guaranteed through Jan. 1, is also promoted inside its front cover with a bind-in card outlined in red that extols, "Free Shipping!" The message printed on the reverse side promotes the feature as a way "to introduce you to L.L. Bean quality and customer service."
Fingerhut Corp. began offering free shipping last month to customers "on every item after your first" to encourage multiple orders from its customers, but characterizes the move as a long-term strategy rather than a holiday pitch.
"It has nothing to do with e-commerce," said John Christiansen, vice president of customer list marketing at Fingerhut, Minnetonka, MN. "We would've done this anyway. It was pretty significant fixed cost to change our systems to accommodate this change, but we thought it was worth it."
The expense might well pay off. Early reads on incoming orders show a higher number of units per customer since the offer began, according to Christiansen.
The $2 billion marketer, which was acquired earlier this year by Federated, tested free shipping and handling on any and all orders as an incentive in late 1998 and early 1999, but "we didn't get the response rates we really expected," Christiansen said. "It's a little bit of a tough nut on a financial basis."
And both Skymall, Phoenix, the in-flight cooperative mail-order catalog, and apparel marketer Brooks Brothers, New York, promote free shipping in their print catalogs if the customer orders from the online site instead of calling a toll-free number. Catalogers with Web sites want to migrate print customers over to the more economical Internet business model, so that strategy seems obvious.
Lillian Vernon Corp. said its "Free shipping on gifts over $50," "Free gift with all orders" and "Defer payment of your order until March 15" offers are business as usual.
"They're existing promotions we've used successfully in combinations for decades," said David C. Hochberg, vice president of public affairs at Lillian Vernon, Rye, NY.
However the offer is structured, free shipping seems by far to be the best way to encourage customers to shop. Among catalog shoppers, 81 percent said free shipping would definitely motivate them to purchase, according to W.A. Dean & Associates' "Consumer Loyalty in the New Millennium" study, which was released earlier this year.