STAMFORD, CT – Last month Carol Wright rolled out its second mailing in Germany this year, dropping another 500,000 books of 24 pages each to follow up on a similar mailing in March.
‘Our plans call for a German mailing in 1998 of 3 million catalogs,” international marketing manager Eric Hook said. “That leaves us with another two million to go.”
Carol Wright tested the German market last September and October, dropping 150,000 catalogs in each test. Results were promising enough to justify a full rollout this year, Hook said.
The 24 page books are being mailed in “twenty gram letter sizes” and offer 60 products. “We really aren’t a niche marketer,” Hook explained, “but a general merchandiser who has a little bit of everything.”
The list of goods is similar to the US catalog. “We’re heavy on women’s apparel in the summer and then do household gadgets, slicers, dicers, key clickers for car keys, knick knacks and other handy items.”
Prices reflect the company’s target: a low end market, largely older females with middle to lower incomes. “We range products from 4 German marks to DM 50 ($2.24 to $28),” Hook said.
Procurement of lists has been much easier than Hook expected. “We’ve rented lists from general merchandise catalogs similar to ours and we didn’t have as many problems with competitive issues as we thought.”
Some of the catalogers from whom Carol Wright rents names “are very close to ours but they don’t look on us as head to head competition because they go in with 100 page books that feature 300 items vs. our 24 pages.
“Any response list that matches our demographics does well for us so we had no problems coming up with the names we need. My main problem is getting enough inventory into Germany to meet demand.”
Carol Wright has mainly used AZ Bertelsmann, the DM arm of the media giant, in its German venture. “We rent fulfillment services from them,” specifically from subsidiary Richard Scholz & Co.
“They have a warehouse outside Hanover and a call center which handles orders and shipping.” Call center staff learned the products before they were mailed out.
“We prepared a telephone script which the AZ people coached the staff through. We offer unconditional guarantees and we wanted to emphasize to the call center staff that we mean it.
“They were somewhat surprised by this so we did need to make sure that they understood what we wanted done. We’ve been playing this one low key, though, because of the Lands’ End court suit.”
Lands’ End was hauled into German court last year because consumer groups felt the unconditional guarantee was a separate product and therefore violated 19th century German competition law.
Lands’ End prevailed in lower court and expects to win on appeal. “Ultimately, if we’re involved we’d prevail but I’d just as soon not get into court,” Hook said.
“Our main goal is to provide services to our customers that will encourage them to come back and do business with us. There is no reason not to offer German customers the same service level we offer in the US and the UK.”
Products are shipped in bulk from the US to the Hanover warehouse without using the UK as a staging areas, “though we do a little bit of transshipments from the UK and from some other countries.”
Unlike the UK where Carol Wright does a lot of space ads in newspapers and magazines, the company only uses the catalog as a mailing piece in Germany. “We evaluate the cost of newspaper space in Germany and it was too high to justify it as a startup,” Hook said.
The company mails with the Deutsche Post AG through AZ Bertelsmann. A discount scheme is in place, Hook noted, but said “the maximum we could qualify for is 6 percent. Deutsche Post doesn’t qualify much for discount.”
The only cheaper way, he added, would be to mail into Germany from another country, a route Carol Wright does not want to take because “we want to make a totally German offer to our German customers.
“We are happy with the response rates we’ve been getting. They hit our projections. In fact, we found that in some cases customers are buying more items per order than we expected so in that case are exceeding our projections.”
