Co-Op Links Catalog With Retail Buyers
Fitigues, a designer of casual women's apparel based in Chicago, is tracking the geographic makeup of its catalog buyers to determine where to open retail stores while gift and collectibles manufacturer Lenox, Langhorne, PA, is combing its list of outlet buyers to build a catalog prospect list.
Fitigues has opened stores in Indianapolis and Scarsdale, NY, and is considering a store in Atlanta based on the proximity of its catalog buyers. Director of marketing Christen Black said trends in the company's retail sales indicate that many catalog customers that lack retail stores in their regions are buying at retail locations when they travel.
Fitigues has an inhouse retail transaction system that captures the buyer's name and address at point of sale and links that information to its catalog house file. It uses that data to rank regions by concentration of retail buyers.
"We weren't as successful in other market openings as we were in markets where we really took a look at our house file and noticed a high interest in the brand," Black said.
When Fitigues opens a store it uses the Abacus Retail Synergy Model to identify prospects most like its customers in that region. Tests in Indianapolis, Houston and Denver delivered a response rate three times higher than outside lists. The results were good enough to convince the company to roll out a prospecting program for all 28 of its retail locations.
The company tested Abacus names in Charlotte, NC, Indianapolis and Scarsdale using a catalog with a store-specific wrap versus a postcard. Black said the catalog pulled a lot better, and Fitigues plans to mail a catalog with a region-specific wrap for each retail location. The company mails five seasonal catalogs per year.
"We wanted to take a more personal approach and this was really the best alternative to renting other people's names in those areas," Black said.
Lenox has amassed a multimillion name customer file over the last four years by collecting names and addresses at its 50 Lenox outlet stores and 60 Dansk outlet stores in the United States. Lenox mails offers on a regular basis to that file and tracks purchase behavior through responses to discount and other offers.
Phil Donahue, Lenox director of database marketing, said such retail direct marketing is a powerful tool to drive store traffic but after two unsuccessful seasons of trying to convert retail buyers on its own, he determined that detailed in-store behavior was not enough to predict catalog purchase behavior.
Lenox is now using the Abacus Optimization Model to identify which of its outlet buyers are also catalog buyers. The model works by matching the names and addresses on a house file to any purchases those same customers have made from catalogs. In a test of 175,000 outlet buyers from its top two segments with the Optimization Model, Lenox improved its sales per book index from 31 to 82 (regular Lenox catalog buyers had an index of 100).
Donahue said optimization is a way to filter out the nonbuyers from catalog mailings and has allowed Lenox, which produces the Lenox Holiday Gifts and Lenox Collections Christmas Catalogs, to move into the top 5 percent to 20 percent of all catalogers in terms of sales volume.