CASE STUDY: E-tailer RedEnvelope ups ante with Mother's Day catalog plan

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RedEnvelope Gifts Online has begun mailing more than its signature ribbon-wrapped, red-boxed gifts to consumers. The dot-com is shipping its second catalog.

This week's mailing of 1.4 million Mother's Day catalogs is double the size of the company's first direct mail endeavor preceding Valentine's Day. The catalog is going to former recipients of RedEnvelope gifts as well as other potential customers.

Tom Bazzone, president-chief operating officer, envisions the catalogs as more than simply a means to drive customers to the Web site: "Our long-term strategy is to be a multichannel worldwide retailer of great gifts. Our second channel is catalog, and our eventual plan is to evolve to a store strategy as well."

RedEnvelope has seen sales volume grow dramatically since its overhaul last fall. Valentine's Day volume was higher than Christmas, and Mr. Bazzone expects Mother's Day to beat Valentine's Day. Orders from the 600,000 catalogs sent prior to Valentine's Day accounted for about 30% of gifts purchased through RedEnvelope, he said.

The privately owned company tracks catalog orders using a special code printed on the catalog that gives consumers free shipping when it's entered via redenvelope.com or given over the phone.

"The interesting thing about this strategy is it's opening up a whole new strategy [for getting offline consumers]," Mr. Bazzone said, explaining that 80% of catalog orders came from individuals who didn't have Internet access. "We can't just dabble [in mailing catalogs] because they will expect a catalog."

Mr. Bazzone expects RedEnvelope to publish an average of five catalogs a year. The next, promoting Father's Day gifts, has already been completed and will be mailed to 1.6 million consumers as well as placed in every outgoing Mother's Day gift.

While catalogs weren't originally on the drawing board when 911 Gifts was rebranded as RedEnvelope last fall, Mr. Bazzone said the company quickly realized it needed a good way to turn gift recipients into customers themselves.

"It happens to be a very economical way to acquire customers," he said. "We don't put all of our eggs in one basket. We have dominant online sponsorships, print and outdoor strategy."

The catalogs are created in-house with the assistance of Em Dash Design, San Francisco, and use images from print ads via Leagas Delaney.

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