It's beginning to feel a lot like Christmas around the offices of Garden.com, an e-tailer specializing in garden-related products. Spring is the company's big season to sell spades, bulbs, and everything else green thumbs need to spruce up their backyards.
But Garden.com is barely 4 years old, a seedling compared to its competitors in the garden-supplies business. Not every garden enthusiast knows about Garden.com - or is online, for that matter. So early next month, the dot-com plans to mail a catalog with a selection of its products to thousands of targeted households across the country. Yes, a catalog. "Online consumers like to dog-ear pages of a catalog just like anyone else," says Dionn Schaffner, vice president of marketing for Garden.com. "We want to be accessible however people want to reach us."
Garden.com isn't the only e-tailer pointing its browser at the mailbox. During the holiday season, a handful of dot-coms, including Greatfood.com, Wine.com, Tavolo.com, and jewelry e-tailer Miadora.com, experimented with print catalogs. While most say they're still analyzing the results, they're quick to add that early signs indicate success. Industry experts aren't surprised. "There's something about flipping through a catalog that can't be replaced by the online experience," says Rich Fazekas, research director at W.A. Dean & Associates, a catalog consultancy firm in San Francisco that has just completed an informal study of e-commerce players launching catalogs. "If [e-tailers] want to grow as a sales channel, catalogs can be a viable part of their business."
And in the anything-goes atmosphere of e-commerce marketing, why not give it a shot? "In traditional marketing, there are formulas to roll out brand extensions," says Garden.com's Schaffner. "But on the Internet, no one knows what will work. We're in a space with no predefined rules."
Catalogs make perfect sense, given the buying habits of online users. According to Cyber Dialogue, an Internet research firm in New York City, 57 percent of adults online - some 39.5 million U.S. consumers - buy through catalogs. Female surfers are more likely to make catalog purchases than men (64 percent vs. 50 percent). And among online shoppers, nearly two-thirds also order from catalogs, according to Cyber Dialogue.
Unlike e-mail marketing, catalogs don't seem to stir up the same emotions over consumer privacy, says Chris Fehrnstrom, senior vice president of marketing at Wine.com. "From a marketing standpoint, you're very reluctant to e-mail someone you don't know," he says. "But direct marketing through traditional channels like a catalog isn't perceived the same way."
Wine.com mailed a holiday catalog to nearly 1 million households that fit its customer profile: highly educated, affluent baby boomers who enjoy the good things in life. The company acquired names through outside vendors, pulled from a combination of catalog and magazine subscriber lists. Though mainly a customer-acquisition tool, the catalog was also tested its catalog among a select group of Wine.com most valuable clients. Fehrnstrom says he's still evaluating results, but he's obviously serious about direct marketing - his new director of loyalty marketing comes from the catalog industry.
Like Wine.com, Garden.com hoped its holiday catalog would draw new customers to its site. "From a branding perspective, the catalog was really meant to get the Garden.com name out there to people who may not be online," says Schaffner. Filled with shots of pretty flowers and decorative wreaths, the catalog mailed in two waves to 500,000 households, mostly to middle-aged homeowners with a propensity to make mail-order purchases or who have an interest in gardening.
As an experiment, it was sent to a handful of the company's most valuable customers and those who hadn't been heard from in a while. Schaffner says less than 10 percent were targeted to current members. "If we find that our best customers ordered really well, then maybe next time, we'll send it out to everybody in that segment," she says. Garden.com is now analyzing its holiday mail-orders to figure out who bought what - and whether it should tweak the mailing list for the spring catalog next month.
Database mining might be the best way to pinpoint the right recipients, but most dot-coms aren't there yet, contends Mike May, a digital commerce analyst at Jupiter Communications, an Internet research firm in New York City. "Most online merchants have more data than they know what to do with," he says. "Right now, they're less interested in targeting than in driving more transactions. The opportunity costs in targeting the right prospect are far greater than sending out unnecessary catalogs."
Tavolo.com, a gourmet food site (its name means "table" in Italian), didn't have time to sift through its database before mailing to roughly 1 million households. In fact, production time was so tight that the catalog had to go first-class in order to reach consumers in time for holiday shopping, says Cara Schlanger, vice president of marketing. "A catalog can really complement ad buys," she says. "You can mail it to a Gourmet subscriber who also saw your ad in the magazine." The response rate was very good, she adds. (Like other online merchants contacted for this article, Schlanger declined to give specifics. Most said response rates fell at or above the industry average, which for consumer catalogs is about 3.2 percent, according to W.A. Dean & Associates.)
While e-tailers offered catalog buyers traditional ways to order, they also encouraged customers to make their intended purchases online and maybe even browse for other things. Many did just that. Ben Nourse, president of Greatfood.com, says that the majority of people who visited the site as a result of its holiday "Netalog" spent a reasonable amount of time looking around. "They didn't just go and order the product they saw in the Netalog, but rather drilled down into the site to find other related items," he says.
Tavolo.com's Schlanger says 90 percent of its catalog orders came in over the Web. Still, some habits die hard: A few orders came stapled to checks.