As a veteran of the catalog industry, Mrs. Fields Gifts President Greg Berglund has witnessed the ever-changing environment catalogers operate in. He offers opinions on several topics, including where he sees the catalog/multichannel business heading in the near future, as well as tips for those trying to thrive, survive and more.
Catalog Success: What methods of customer acquisition (industry-wide) will be most relevant in the coming years?
Greg Berglund: I’m concerned about the trend in the industry where more and more customers are being acquired using online methods compared to traditional direct marketing methods. The lifetime value of online-acquired people tends to be lower across all businesses I’ve been in — not just this one — and lower than direct marketing-acquired individuals. This is often due to the fact that the switching cost is much lower.
If someone had bought an item from you in the past, for example, now all they have to do is go to Google and put in that class of item, and they can see all of the different places from which they can buy that item in the marketplace. It’s very easy for a customerto move to another retailer.
Generally, I’m concerned about the impact on the loyalty of customers with this ever-increasing shift to online. It underscores the need to be rock-solid on the service you deliver and your product quality. You have to excel on those fronts because it’s much easier for customers to find alternatives.
CS: What advice could you provide on how to run a profitable catalog/multichannel company in 2008 and beyond?
GB: Understand the essence of your brand and why customers care about what you offer — and deliver that. Listen to customers closely. Watch your key-coding and analytics carefully. And while you might love the look and the feel of a certain item, if you’ve tested it and the numbers don’t pan out, move on. The numbers don’t lie.
Joe Keenan is the executive editor of Total Retail. Joe has more than 10 years experience covering the retail industry, and enjoys profiling innovative companies and people in the space.