Crossing the Divide
For the first time since L.L. Bean opened its flagship store in 1917 in Freeport, ME, retail customers aren't getting tossed back into the water like small fish when they leave a store. Cross-channel integration has allowed the retail giant to better understand its customers, gain multichannel synergy and overcome a catch-and-release relationship with retail customers.
"[Previously, when a] customer came to L.L. Bean through retail, he or she was invisible to our systems, so the customer walked out the door and never heard from us again," notes Steve Fuller, L.L. Bean's SVP corporate marketing, while presenting at September's New England Mail Order Association's conference in Portland, ME.
After three years of systems upgrades, L.L. Bean can now match back customer activity across all channels, including transactions, outdoor school experiences and participation in special events. As a result, its buyer file, which Fuller reports had been "flat" for years, is now 7.6 million names strong and continuing to grow. The company is using this information to inform its marketing strategy across channels. For example, a customer's Web and store transaction history is taken into account when determining which catalogs to mail to the customer and how frequently.
"There are [many] similarities between customers across channels, but in the end, retail customers have different marketing needs so they get different treatments in catalogs, e-mails, etc.," Fuller says.
While Fuller agrees that a multichannel strategy facilitates increased shopping frequency and therefore can make a multichannel shopper more valuable, he believes it's an oversimplication to think that multichannel is always better. "A customer who makes one purchase online and a couple of purchases in a store [is not necessarily] more valuable than a customer who shops repeatedly online," he notes.
One factor that may be forcing the company's hand when it comes to taking a stronger multichannel position is the evolving role of the catalog for today's merchants. "The catalog is more of an advertising vehicle, driving customers to the Web, store or phone," Fuller notes.
L.L. Bean's Web site now accounts for 50 percent of direct sales, and Fuller sees a day when one-third of the store's overall sales originate from the Web, one-third from retail and one-third from the phone.
"The phone isn't going away," he says. "Possibly more so than for other companies, [many of our] customers research on the Web, then order from our phone reps because they're so fantastic."
The outdoors has been integral to L.L. Bean's marketing message since founder Leon Leonwood Bean started selling hunting shoes that he designed via a mailer almost 100 years ago.
Competition among outdoors outfitters has heated up. Retailers offering a strong experiential brand, such as Cabela's, have attracted attention. The Lincoln, NE-based company has set the standard for experiential retailing with stores that include wildlife dioramas and aquariums inside, and full-service campgrounds outside. The experience is carried through to the Web site and catalog, both of which provide a wealth of information about Cabela's travel services and outdoor adventures.
L.L. Bean is implementing a multi-year plan to build on its outdoor heritage. There is synergy between this goal and the multichannel strategy because the strategy "is about helping customers have a great experience and enjoy the outdoors," Fuller says. "A better experience for customers is good for L.L. Bean."
Currently, the company has 10 stores in the Northeast and aims to double its retail footprint in the next four years. The outdoor experience figures in expansion plans: A 2,400-square-foot addition to the hunting and fishing store in Freeport will open in November. The LEEDS-certified building will feature a fireplace made from 95 tons of local stone and a porch made from recycled lumber, part of which came from an old L.L. Bean factory store. There are plans to build a theme park-style adventure center near the flagship store that includes lodging and dining facilities and will offer activities, such as biking, archery, kayaking and snowshoeing.
"There will be an integral outdoor experience as part of every one of our retail stores," Fuller notes.
Fuller adds that e-mail "is playing a very big role in retail expansion." Recently, the company began collecting e-mail addresses at retail point-of-sale, something it had never done before. "We have five million e-mail addresses and only 2% of those came through retail," he says, adding the company wants to improve this rate.
As it builds a file of e-mail addresses, L.L. Bean is using the names to do more targeted e-mail campaigns, including store-specific events. The retailer's Outdoor Discovery School - which last year led 14,000 outdoor excursions - is getting increased play in e-mails as well as in the catalog and online.
The Web site is undergoing an overhaul with an eye toward improving both the multichannel experience for customers and raising the profile of L.L. Bean's outdoor heritage. "We want to raise the relevance of the Web site," Fuller says, adding that details will unfold over the next few months.
Multichannel merchant Patagonia looks to athletes to help it bring product-centric outdoor messages to customers across channels. The company confers with a series of athletes on individual items in a season's line. Athletes get prototypes, and camera crews document how they use the items. Their stories are told in short form in the catalog and in longer form on the Web site.
"[Everything] is told through the outdoor experience because that is what our product is designed for," says Rob Bon Durant, VP marketing at Patagonia. "[From the customer's perspective, these stories] validate that our product is being built for and tested in the real world by real athletes."
Customers are also invited to submit stories and photography about their own outdoor adventures. Some of these are published in Patagonia's catalog, which is really more of a magalog that has unique content every month.
"Because the content is unique, the customer has a reason to go back," Bon Durant says.
Sustainability issues are integral to Patagonia and its messaging. "We realized many years ago that if we wanted to have many of these wildlife place to visit, that we need to protect them," notes Bon Durant.
A recently launched microsite called The Footprint Chronicles attempts to trace the path of five items from fiber to delivery at Patagonia's Reno, NV, warehouse. The site includes information about the energy consumption, CO2 emissions and amount of waste generated for each item. The goal is to educate consumers and Patagonia employees about the true cost of manufacturing from an environmental and social standpoint.
"I don't think that you'll see many companies that are doing business overseas bringing cameras into the factories and interviewing factory managers or third-party auditors," Bon Durant says.
Like L.L. Bean, Eastern Mountain Sports (EMS) is looking to make the outdoor experience a bigger part of its multichannel strategy as it embarks on an ambitious retail expansion plan that includes both enlarging existing stores (it currently operates 68 stores in 12 states) and opening new stores. The Peterborough, NH-based company recently opened five stores that are double the size of their previous stores and feature plasma TVs hanging from the ceiling that display athletes in action.
The new stores, intended to attract younger consumers, also have a sustainability aspect and include features such as cork flooring, recycled materials and a system that sends rainwater back into the groundwater supply.
As part of its expansion plan, EMS will revitalize its schools program, which includes climbing, kayaking, skiing and mountain biking schools. With a focus on building an active outdoor community, each new store includes an adventure planning and information center called the "hub," where schools program information is also available.
Building community is a popular strategy among multichannel outdoors outfitters. For its part, L.L. Bean is investing $90 million in Freeport. Earlier this year, it opened the Leon Gorman Park, which has walking trails, picnic areas, a skating pond and an amphitheater. It also expanded its order fulfillment center to more than one million square feet, and it plans to build an open-format high-end shopping mall.
The company is also organizing special events for L.L. Bean credit card holders. Card holders recently were invited to see a new store before it opened to the general public as part of an event where designers and experts were on hand to talk about the products. Similar events are planned for future openings.
With a renewed commitment to the great outdoors, and by investing in its hometown, L.L. Bean is ensuring that it doesn't forget its past. At the same time, it is beginning to lay the groundwork that could guarantee it is around for another 100 years by integrating its operating systems and adopting a synergistic multichannel strategy.