2Market, a new company formed by America Online, Apple Computer and Medior, a multimedia developer, today unveils a new version of the catalog disc, also called 2Market. In addition, the company plans to offer merchandise on AOL in early December and, later, on Apple's eWorld online service.
The project is far more ambitious than the limited test of En Passant a year ago. In that test, Apple and Redgate Communications Corp. (now owned by AOL) mailed out 30,000 free discs to owners of Macintoshes with CD-ROM drives. Consumers could order merchandise from 21 catalogs during the December-January test.
This time, 2Market is targeting its effort with more precision and expects to send 275,000 discs in both Macintosh and Windows formats to households most likely to be interested in catalog shopping. 2Market will test a variety of pricing strategies, including sending the discs for free.
"We're aiming at home consumers who aren't necessarily technocentric," said Michael Minigan, VP-business development of the San Mateo, Calif.-based company. Mr. Minigan is also exploring distribution through Baby Bells' interactive TV systems and through cable-modem technology.
2Market has widened its merchant mix to 27 catalogs-only eight of which participated in En Passant-and will offer 2,500 products, including recorded music selections promoted with music-video clips.
A much narrower, seasonal selection of 200 to 300 of those products will be offered in a 2Market area on AOL, reaching another 1.25 million users who will pay time charges for access to shopping. 2Market won't be available on eWorld until early next year.
The CD-ROM version of the catalog opens with a digitized female guide, who complains in a 5-minute opening spiel about the hassle of retail shopping, then walks users through a menu screen that allows them to choose among several shopping methods.
A single vendor's entire product line can be displayed sequentially, in pages; a particular item can be retrieved from any of several catalogs; and a personal shopper displays gifts selected by price range, subject interests, gift occasions and age groups. Individual items can be marked and quickly retrieved for later perusal.
The AOL forum simulates a live shopping experience, by adding chats with musicians, tips from gift experts and contests and promotions.
Orders are transmitted by modem, toll-free number or online (in the AOL version) to a central processing center, and are then forwarded to individual merchants for shipping.
Visa USA's logo appears on the order screen, and 2Market is likely to add other advertisers in related areas like shipping services.
In addition to those ad buys, 2Market earns revenue from three other sources: Catalogers pay both an upfront fee for multimedia production and a royalty on each sale. And 2Market will now earn revenues from subscriptions for its discs.
Although 200,000 discs will be distributed unsolicited, the company has begun a direct-mail test for the remaining 75,000 discs, promoting 2Market as an "antidote for gift anxiety." Mailings from Wunderman Cato Johnson, New York, offer discs for free or at prices up to $4.95 per disc and $19.95 for a four-disc yearly subscription.
The expanded effort marks "a much more targeted and smarter approach to CD-ROM shopping," said Elaine Rubin, manager of interactive services at 800-FLOWERS, Westbury, N.Y., a participant in both En Passant and the new product.
Catalogers view this and other interactive products as a way to tap new customers who shy away from traditional print catalogs.
"They don't want us to deliver customers they already have," Mr. Minigan said, adding that more than half of En Passant's customers shopped from catalogs they hadn't patronized previously.
But the upfront expenses and royalty payments may not have made sense economically for many En Passant partners, who took a pass on participating in 2Market.
2Market executives say it's because some catalogers didn't have time to do the production work necessary for the disc. But catalogers might not have found the expense worth the effort.
For others, the experience is worth more.
"We're certainly not looking to make money on it, but we're learning a tremendous amount about how to merchandise in this kind of medium," said Stan Fridstein, president of the Right Start Catalog.
Among other 2Market vendors are Chef's Catalog, Lands' End, Spiegel, Warner Bros. Studio Stores, New York's Metropolitan Museum of Art and Sony Music.
But others seemed less than thrilled with the performance of En Passant, and opted out of 2Market.
"It just didn't quite work out," said Dale Moore, director of new-media technologies at L.L. Bean, Freeport, Maine, who declined to elaborate. L.L. Bean instead will participate in a competing CD-ROM catalog called the Merchant, from Magellan.
Jeffery D. Zbar contributed to this story.