Cataloger Q&A: Dale and Thomas Popcorn Focuses on Cross-channel Promotion and Matchbacks
A four-year old food gift company co-owned by former basketball great and current New York Knicks coach and president Isiah Thomas, Dale and Thomas Popcorn launched its direct-to-consumer business in late 2004 with an e-commerce enabled Web site. With a catalog in the mail to its retail customers by fall of 2005, the direct business grew 800 percent in the first year. Paul Goodman, senior vice president of e-commerce and marketing for the young company, recently talked to Catalog Success Associate Editor Matt Griffin about what led to the decision to launch a catalog, as well as how the direct channel and retail business are working together.
Catalog Success: How did the company evolve?
Paul Goodman: Just about four years old, the company started out as Popcorn Indiana. It was a store on the Upper West Side of Manhattan, on Broadway at 77th St. It’s evolved over the past four years into a multichannel company with retail, direct to consumer via catalog and Web, corporate sales and wholesale.
Catalog Success: Why the name change?
PG: Two years into the life of the company, Isiah Thomas was in the neighborhood of our first store, smelled the popcorn and sort of demanded to be part of the company. He’s one of the biggest popcorn lovers ever. He’s got a strong emotional attachment to it. It’s all about sharing and being with family. The emotional attachment for him comes from when he was very young, sitting around watching TV with a bowl of popcorn. He’s always wanted to be involved with popcorn, and when he saw us, he knew this was his opportunity. When he became a part of it, they rethought the name of the company. Thomas is for him, and Dale is a third generation popcorn farmer from Popcorn, Ind.
Catalog Success: How much involvement does Thomas have in the business?
PG: He’s an investor. He’s a little preoccupied these days with the Knicks.
Catalog Success: How many stores do you now have?
PG: We have 13 stores, mainly on the East Coast. We have a few in Florida, and one that just opened in Michigan.
Catalog Success: When did you launch the catalog?
PG: We had a print catalog in the fall of 2005 that was mainly directed to consumers. Some went to corporate customers, but at the time we were just launching our B-to-B division, and we did other kinds of marketing on that side. In 2006, we did a lot more of both consumer and corporate mailings to the housefile and prospects.
Catalog Success: Why did you launch the catalog?
PG: The people in this company, myself and the CEO [Paper Direct and Genesis Direct cofounder Warren Struhl] come from a traditional direct marketing, direct response background. We know catalogs work. And we know that catalogs done well drive sales. And that’s not going away any time in the future. We just need to do a better job understanding what the conversion rate is when we put a catalog in the mail. How many people are going to the Internet versus ordering on the phone. We’re in the midst of developing a state-of-the-art marketing database to try to get at that a little better than we have.
Catalog Success: What’s your catalog circulation?
PG: We mailed about 1 million catalogs last year.
Catalog Success: How are you expanding the direct business this year?
PG: We’ll be mailing more to our housefile and prospecting to other lists. On the catalog side, we really have to look at how we deploy our catalogs and how we measure the catalog’s effectiveness. It’s a tough thing in the new age of direct response marketing. I’m a huge believer in the Internet and think having a Web presence is vital to the success of any company. But it muddies the waters as to how successful your marketing efforts are because you can’t track back. The customer doesn’t always give you that information. Those are the challenges everyone in the catalog industry is fighting with, but I think everyone realizes that you have to mail a catalog. That’s the most effective way to get the word out there. People still expect it, they still want it and they will respond to it. You just have to figure out how to track it, and we’re working pretty aggressively on that right now.
Catalog Success: What cross-channel promotion are you doing, if any?
PG: We’re collecting e-mail addresses in the retail store, handing catalogs out in the store, and we’re right on the edge of something else. By the end of the first quarter this year we’ll be launching a loyalty program that crosses retail and direct. That will give us the opportunity to communicate with customers better across channels. It’s a loyalty card and a stored value card. The more the customers buy, the more points, or kernels, they earn. They also can store money on the card, like any other gift card. But once you’ve earned a certain number of kernels, the kernels turn to dollars which go right back on the card.
The Holy Grail of all loyalty programs is being able to contact the customer with relevant offers based on how they shop. So the customer can use the card in the stores or online, and we’ll market based on the customers’ preferences. If you’re a store customer, we’ll give you offers that bring you back to the store, but remind you that if you want to send a gift, you can always go online and your card works there as well. We’re trying to marry the retail and consumer direct business pretty tightly.
