Changes Brighten Lighting Cataloger's Summer Outlook

A direct marketer of home automation products is crediting improved presentation of high-end items for a rise in average order amount for its summer catalog.

Smarthome, Irvine, CA, which sells lighting and home theater control as well as security and surveillance devices, is generating an average order surpassing last year's summer book by 5 percent among house file buyers, from $182 to $191, and about 10 percent among prospects, from $78 to $87.

“Products that are selling better are the higher-end products that are being featured with additional photography,” said Matt Dean, vice president of sales and marketing at Smarthome. “We're also explaining, in more common language, what these products do. We've shifted from highly technical language to talking about the features and benefits of these products.”

Security cameras such as the Day/Night Sunshade Camera ($199.99) are part of the surveillance category that is producing improved sales this summer along with home theater and networking & cable (wiring) products.

“Our expectation was just to get the same response and same revenue per order,” he said.

Smarthome's summer book, which was in-home June 7, underwent many changes from the 2002 version, including:

· A 43 percent circulation increase to 250,000 from 175,000.

· From a product-focused cover to a lifestyle shot.

· Removal of the order form.

· A reduction in page count from 100 to 76.

The house file got 69 percent of the summer catalogs last year. This year, 56 percent went to the house file.

“The reason for mailing more was to get additional prospects to build the house file,” Dean said. “Our house file has increased 15 percent over the last year. We're building the asset of the house file, which is real people buying. [This summer catalog has] been hugely successful in driving prospects to the house file.”

Prospecting strategy was refined as name acquisition this summer resulted completely from obtaining names from cooperative database providers Abacus and NextAction, Westminster, CO. Last year Abacus names accounted for 20 percent of prospecting with the rest from purchased or traded lists of other catalogers or from magazine subscription lists.

“We found [Abacus'] response rates last year were better than the purchased or traded lists we used,” Dean said. “We gave Abacus a demo to go after and asked them to provide a model that would respond best to our offer. The names we obtained this year either made some type of home improvement or purchased a home improvement product or some type of security product. NextAction was able to give us product-level detail, such as who purchased security systems or lighting-control products.”

Also changing is the target demographic.

“This year we are looking for homeowners between ages 35 and 55 that reside outside of downtown urban areas, living in single-family residences,” he said. “The demo last year was the slightly older male. Now we're also targeting women with easier-to-install products. You don't have to be the Home Depot type.”

The target audience's average annual household income stayed at $75,000 to $80,000.

“We branched out into getting new mainstream products,” Dean said. “We had been more of a niche marketer, targeting technical professionals who understood home automation technology. We needed to target new customers to reach mainstream America — people who would be interested in security, surveillance or control products for the home.”

About half of the products from a year ago appear in the current book as the number of SKUs is down 20 percent to about 800. Also constant year-over-year is the $50 average price of items in the catalog.

Weather-related items were reduced this year. But they included a product that could track weather trends and precipitation and, as a result, activate a sprinkler system as needed.

Occupying the spread on pages 8-9 is the SwitchLinc, which accounts for 20 percent of the company's gross profit. This remote-control dimmer switch lets homeowners use a cell phone to turn on their lights or have a motion sensor do it. Another hot seller, new to the summer book, is the back cover's NuVo Simplese 2-Source 4-Zone Whole-House Audio Distribution System ($999.99).

“Over the last six months, we've changed from product covers to using a lifestyle image,” Dean said. “We're targeting prospects more, and with new customers we want to give the impression of a lifestyle rather than a product. Lifestyle images perform substantially better with prospects.

“And with the order form, we did testing with and without it, and it didn't make a difference. It was one full page, and the vast majority of catalog orders are through the Web site,”

Response rates last summer included 4.1 percent for the house file and 1.8 percent for prospects for a total of 3.4 percent. That was below plan by about 10 percent. This summer's numbers are also tracking to produce an overall 3.4 percent with the house file at 4.3 percent and prospects at 2.2 percent. But this is pegged at better than plan because of the increase in prospects targeted.

Unchanged is the 70 percent to 75 percent of catalog sales realized via the Web site with the rest coming via telephone or the retail outlet opened in Irvine in January.

“I'm surprised that [the percentage of sales] didn't go down on the Web since prospects need more hand-holding,” he said. “A lot of people are getting advice on the phone and placing the order on the Web. A lot of people need recommendations coming from the experts.”

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