All Sewn Up A British marketing campaign convinces American consumers to buy Brand Britain.
The Memo How do you sell a 14-year-old, English brand, relatively well-known in its home country, to U.S. consumers?
That's the question executives at Charles Tyrwhitt, a London shirt company, faced earlier this year, as it tried to make inroads into the American market.
Until recently, the privately-held company - founded in 1986 by Nicholas Charles Tyrwhitt Wheeler - was growing at an ambitious clip. Today, in fact, it's one of the leading direct mail companies in the United Kingdom. But lately, the rate of growth has begun to slow. The problem: Strict cyber laws in the U.K. restrict companies from gathering information on the Internet without consumers' permission. CT had entered the world of e-commerce in 1998, but Web sales remained a small and slow-growing percentage of its total business. By 1999, just about 20 percent of the company's total sales were made via the Web.
To maintain CT's ambitious growth plans, company executives decided on a different approach: In 2000, it would enter new markets to meet its sales target. The vast market of affluent on-line Americans seemed to be just the ticket - according to Media Metrix, the fastest growing segment of U.S. online consumers had incomes of $75,000 to $99,999. But these U.S. consumers aren't exactly suffering from a shortage of shirt suppliers, and they're also not accustomed to buying tailored products by modem. Not to mention the dulling impact "business casual" has had on Americans' appetite for tailored togs. How would CT charge into the hearts and closets of American consumers, and how would it do so without hemorrhaging money?
The Discovery Rather than bombarding U.S. mailboxes with catalogs, James Stewart, vice president of marketing and development, chose a more cost-effective strategy: To drive U.S. consumers to its Web site (www.tyrwhitt.com). Instead of taking the more typical route of designing a Web site specifically for U.S. consumers, CT's stateside URL links surfers directly to the company's U.K. site. But would U.S. consumers, who already have trust issues with e-tailers in their own country, be willing to hand over their credit card information to an overseas company they'd never heard of?
Stewart created a simple e-mail survey to find out what he was up against. The survey, which was sent to CT's list of American customers, had a 30 percent response rate. The findings surprised him. First, he discovered that American consumers who were shopping CT's Web site understood its niche better than he'd assumed. They knew that Jermyn Street, for example, where CT operates a boutique, was a hub of fine shirt making in London. He also learned that while Americans were much more willing to buy products online, sight unseen, they also returned more products on average than did U.K. consumers, and were concerned about how difficult the return would be to another country.
The company's research revealed a broader issue: An ambivalence on the part of American consumers about Brand Britain. "Americans are very patriotic and do like to buy American," says Stewart. On the other hand, there's a certain cache to a British brand - think Rolls Royce - that CT shirts could leverage. It was going to be a balancing act.
The Tactics Stewart tackled the easy problems first, and decided to include a free return shipping label with all of the products delivered to American consumers. Now, the next challenge would be to drive customers to the site in the first place.
"We had two choices. We could come in and spend $30 million and do a big splash and lose tons of money, or we could do a slow start," he says. Because the company has had success sticking with the marketing basics, Stewart started slow, and unleashed an arsenal of traditional tactics. He launched an aggressive effort to partner with U.S.-based companies - to "borrow" a bit of American aura without losing British brand position. CT entered into frequent flyer mileage partnerships with Delta and TWA, and offered discounts to American Express and Nextcard customers. Finally, he placed small ads in publications such as the New Yorker, The Wall Street Journal, and The New York Times. Online, CT searched for captive consumer markets, and created relationships with large banks and brokerages to give employees a direct link to CT's Web site from their companies' intranets. It also hooked up with AOL.
What's more, Stewart also regularly searches the Net for potential partners that have complementary brand positions to CT, although they don't have to be household names. For example, his most recent favorite: www.style365.com, an upscale fashion portal that sports Robert Mapplethorpe photos on its home page, and features upscale European fashion items. Stewart shuns standard static banner ads. Instead, he uses banners that provide a "shoplet" which shows a mini CT-Web site when a mouse is simply passed over the link. "It gives prospective customers a taste of our products," he says. (The surfer doesn't have to click on the site for the shoplet to pop up - it pops up when the mouse hovers over it.)
Finally, the company is continually upgrading its Web site to make it more appealing to American consumers. Its most recent addition: 3-Dimensional modeling of the company's products, an innovation which won it an Electronic Business Transformation Award, a new e-commerce awards program sponsored by London-based Charteris and the Institute of Directors.
The Payoff The size of Charles Tyrwhitt's U.S. database has grown by 60 percent since January. From February to June of this year, U.S. sales of CT shirts have increased fourfold, says Stewart - although he wouldn't release specific sales or database figures. Moreover, 50 percent of CT's sales in the U.S. have come through the Internet rather than by telephone - a percentage that dwarfs its Internet penetration in the U.K. and Europe (20 percent). U.S. consumers now make up 5 percent of the company's total customer base - not bad considering CT started at 1 percent just six months ago.
What the Critics Say Stefan Szyszko, president of United Planet, a direct marketing firm that handles direct e-mail and direct snail mail in Novi, Michigan, believes that CT Shirts could have made even more of an impact in the U.S. if the company had gone the route of renting mailing lists and sending out its catalog to consumers. "Since they didn't have a presence in the U.S., they would have done well to round out their marketing campaign with something that consumers could actually touch, that would sit on the coffee table in someone's home," says Szyszko.
In Szyszko's experience, consumers are most willing to shop online when they have a bound catalog to refer to, which could help to overcome any lingering fear about buying from a foreign retailer.
Adam Bates, who conducts ongoing research on American attitudes toward Great Britain as director for the Central U.S.A. region for the British Tourist Authority, says CT has managed to leverage the strengths of Britain's brand, while overcoming some cultural differences. He also finds CT's strategy of partnering with U.S. firms particularly sound. The approach, Bates says, may have helped CT gain access to American consumers more quickly and readily.
"Their Web site does a good job of promoting a brand that employs many things which are British," says Bates, pointing to CT's emphasis on quality in its guaranteed products, tradition in its Jermyn Street location, and honesty (consumers can e-mail the owner of the company directly). However, Bates points out that the site could be more user-friendly to U.S. customers without losing its distinctly British flavor if it listed prices in dollars as well as pounds. "Anyone that's expecting to draw U.S. customers to their Web site has to speak in a language that makes sense to them," he says.