A year-old e-mail effort by wine retailer Geerlings & Wade has helped increase online sales and lower the marketer's catalog expenses.
Geerlings, Canton, MA, which released first-quarter results this month, said the e-mails helped raise online sales to $1,181,000 for the quarter, up from $965,000 during last year's first quarter. Internet sales accounted for 16 percent of all sales, compared with 11 percent last year.
The e-mails, which are created and delivered by e-Dialog, have generated a steady 10 percent conversion rate since June 2000, when the companies formed an agreement.
The e-Dialog deal enabled Geerlings to include HTML and AOL format to its e-mail campaigns, said Eric Welter, vice president of marketing at Geerlings. This helped Geerlings boost conversion rates from 2 percent last year to the current 10 percent.
“The biggest thing about wine is that a customer has to see the label and see the bottle,” Welter said. “If you can't taste the wine, you have to give the customer the next best thing and allow them to see it and read about how it tastes. In just pure text, it does an OK job, but HTML helps sell the wine better.”
Welter also said the e-mails have served as a complementary channel for the company's catalog. The e-mails coincide with the catalog through timing and offer, arriving in inboxes days after the catalog drops to reinforce offline offers.
“A lot of customers appreciate that we're sending these e-mails to them because the e-mails are an extension of the direct mail,” Welter said. “So you're getting an e-mail to let [a customer] know that, 'Hey, here's this wine that we just featured in our mailing.'”
John Rizzi, president/CEO at e-Dialog, said that the e-mails also supplement the catalog's products by advertising inventory that did not appear in the mailings.
“So they'll be able to move more products and advertise more products that they were not able to before when all they were doing was the catalog,” Rizzi said. “It allows them much more flexibility in showing those products to the consumer.”
The high conversion rate has let Geerlings reduce a high number of unprofitable mailings. The company cut circulation of its catalog by 2 million, a move to help it achieve profitability, according to the first-quarter earnings report.
By contrast, Geerlings increased its e-mail list from approximately 20,000 before the e-Dialog deal to about 75,000, Welter said.
And Welter said the company would have expanded its e-mail list further, if not for laws prohibiting the solicitation of alcohol in some states, including Mississippi and West Virginia. Though the promotion of alcohol through online channels is still a “gray area,” he said Geerlings, which is regulated by the Federal Communications Commission, does not use e-mail to sell wine in areas where the law prohibits offline solicitation.
“We run our e-mail campaigns the exact same way we run our direct mail campaigns and follow those rules,” Welter said.
