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Spiegel's 'Netalog' Mixes Old and New

While most e-tailers scramble to embrace more traditional marketing, old-timer Spiegel has taken a page from the dot-com playbook and dropped a 24-page 'Netalog.'

The effort aims to drive Spiegel customers who traditionally do not shop online to Spiegel.com. The cataloger is still compiling results from the test.

“We found that people who shop online and by catalogs are better customers,” said Brad Matson, vice president of advertising at Spiegel Inc., Downers Grove, IL. “They have better sales [levels] and a higher retention level, and that makes sense. Using the Netalog takes people who haven't been Internet shoppers and aggressively [shows] them the benefits of the site.”

The Netalog features 12 home appliances, including irons, a toaster and a blender. Throughout the book are references to the 12,000 items consumers can view if they go to Spiegel.com.

“What we wanted to say using a Netalog is, 'Here are 12 great items,' show we are an authority on those items and sell them more in a complete way online than we would in a catalog,” Matson said.

He would not disclose the size of Spiegel's customer file or the number of Netalogs mailed.

Netalogs are smaller versions of catalogs, usually without order forms. Their goal is to give glimpses of items that can be found on a company's Web site and to encourage consumers to shop online for products. They are commonly used by e-tailers, including Amazon.com and Gifts.com, and a few traditional catalogers also have introduced them.

However, Mark Swedlund, principal at W.A. Dean & Associates, San Francisco, does not believe they hold value as a medium for traditional catalogers to drive traffic to their Web sites. Catalogers can feature Web addresses in their books, producing the same results.

“The problem with Netalogs [is] a lot of them are so biased toward getting people to go to the Web — only a certain percentage of catalog shoppers shop on the Web — that they [discourage shoppers from making] impulse purchases by phone or mail,” Swedlund said. “I think they are great for introducing a new Web site that a cataloger might launch or make people aware of some of the different features on a Web site. But as a pure marketing vehicle they leave [a little] to be desired, because it doesn't allow people to order the way they choose to.”

Sal Ferraro, senior vice president of business development at AGA Catalog Marketing and Design, New York, said there are some benefits to the Netalogs. The books can be used to establish a presence on the Internet and also as a channel for customer acquisition. Direct marketers are now realizing that they must leverage all the channels available to them — such as retail, catalogs and the Internet — to prospect and sell to customers, he said.

“Netalogs help drive traffic to Web sites and contain more information on the products,” Ferraro said. “This is an opportunity to take advantage of technology that is available, and catalogers, knowing that consumers are enjoying the online shopping experience, are looking for ways to complement that.”

Matson said Spiegel has promoted its Web site through its catalogs, adding that the company will not decide whether to continue the Netalog until the test results are completed early next year.

Meanwhile, regardless of what catalogers choose to do with Netalogs, Swedlund said smart e-tailers are transforming them into traditional catalogs that will allow consumers to place orders by phone and online.

Ralph Pinto, president of Gifts.com, a Reader's Digest company, Pleasantville, NY, said his Netalog resembles a traditional catalog. The company's goal has always been to create the catalog, make it a success and use it to drive traffic to the Web site. The company launched in September 1999 and has since dropped three Netalogs. The most recent drop was three weeks ago to 1 million people, Pinto said.

Pinto said consumers are encouraged to go online to place orders, but they have the option to place phone or mail orders. The order form, however, does not look like a standard form and is designed to look more like a gift list.

“Most people use the order form as a list if they are making multiple [purchases] from the catalog,” Pinto said. “We wanted to give shoppers space to write a gift list and they have the option to mail it in, but we really want shoppers to place their orders by phone or go to the Web.”

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