A Chat With September’s Profile, Scott Drayer, director of marketing, Paul Fredrick MenStyle
Catalog Success: Where’s the company headquartered?
Scott Drayer: Fleetwood, Pennsylvania, which is about midway between Allentown and Reading. And about an hour-and-a-half north of Philadelphia.
CS: What’s your customer demographics?
SD: It’s male professionals. It’s going to be a little bit older; we look at probably about 35 to 60 [years of age], focusing on dress shirts and ties. Like I said, it’s more of a professional male, higher income and family-oriented, although there’s a good possibility that he’s an empty nester at this point.
CS: What’s the primary merchandise offered in the catalog?
SD: Men’s business dress. Our roots have been in dress shirts — the company was actually founded as an offshoot of a contract shirt manufacturing company. Initially it was a shirt factory that was developing shirts for higher-end department stores, private label. And as a way to fill in some of the production lulls, Paul [Paul Fredrick, company founder] and his father-in-law, Lenny Abrams, who was the owner of the Fleetwood Shirt Company, decided to try to go direct to the consumer.
So it started off with small advertisements in the Wall Street Journal, basically just trying to sell a white dress shirt. We’ve kind off sprouted off of that, first introducing ties, cuff links, and more recently, more business casual dress as we went through the dot-com bubble. Things like that, as well as suits.
CS: When was the company established?
SD: My belief is that we’ve been in business for 24 years. The catalog was first mailed in ’89, and then we launched PaulFredrick.com in ’95.
CS: Does the company operate any retail stores?
SD: We do not operate retail stores, just the online and catalog.
CS: What’s the average SKU count per catalog?
SD: Between 700 and 800 per book, on a style and color basis.
CS: What’s the overall SKU count offered by the company?
SD: A 1,000 to 1,500 per season.
CS: How many employees work at Paul Fredrick?
SD: Just over 100.
CS: How many times a year is the catalog mailed?
SD: The catalog is mailed 35 times a year. We really look at ourselves as a frequency mailer. Being in the market that we are, we have made the determination that we need to be in the mail with a catalog the day one of our customers opens his closet, reaches for a shirt and finds one that has a button missing or a frayed cuff, and recognizes that he’s got a need for our product. So we’re very frequently in the mail.
CS: Does this vary for prospects vs. your housefile? How is that determination made?
SD: Sure, that’s housefile. On the prospecting side, we’re mailing about monthly.
CS: What’s the catalog’s annual circulation?
SD: Between 12 and 13 million.
CS: What’s the size of the 12-month housefile?
SD: We’re at about 180,000. A little over that, actually.
CS: What’s the sales breakdown between channels?
SD: In terms of order method, which is a lot easier, it’s right about 50/50 at this point. It’s more like 48 percent Web, 52 percent catalog. And I’m considering fax, mail and things like that in the phone number. In terms of order generation, it’s slightly less than that, going to the catalog. Almost the reverse, so it’s 48 percent of sales generated specifically through the catalog, 52 percent from online, from print prospecting, things like that.
CS: Has it been an emphasis at Paul Fredrick to generate more business online?
SD: Yeah, I think it’s kind of a natural progression. It’s pretty effective for us to be able to acquire a customer online. We recognized several years ago that if we were going to rely purely on mailing a catalog to somebody in order to generate a prospect, we were going to be in trouble. So we developed a few different ways through online, through print, through alternative media programs, ways to acquire customers. That’s really, really helped our business.
I think something like in 2001, 87 percent of the new customers that we acquired were generated from a prospecting catalog. And I think at this point it’s less than 45 percent. Now that’s not necessarily a shift. We’re still kind of growing that catalog number, but the additional means of prospecting have really generated a lot of new customers for us and helped us grow our housefile and grow our business.
CS: What kind of techniques have you used to acquire customers online?
SD: For the most part online, if it exists, we’ve tried it. The majority of that is going to be spurred by paid search and e-mail. We’re also doing shopping portals, we’ve got an affiliate program. Actually the affiliate program is pretty healthy, as well. But the majority of it’s going to be generated by search.
CS: What are the alternative media programs you referred to for online customer acquisition?
SD: We’ve developed a fairly large print and alternative media advertising process where we’re offering … we’ve generated a special introductory price of one of our core dress shirts. It’s kind of our basic white dress shirt we’re putting out there at a special introductory price. And we’re really using it as kind of a gateway to get a product into a customers’ hands. Let them touch it, feel it. Basically, it’s an attempt to create a continuity program for one of our kind of basic commodity shirts without making it a continuity program.
We know that the majority of our customers have X number of white shirts in their closet at all times, so we want to get our white shirts in there. And when they need a new white shirt, to come back to us and get it. So that was really kind of the basis for the creation of that program, and it’s been very healthy.
CS: How did you get your start in the catalog business?
SD: I took some direct marketing classes in college, which I guess is kind of a rarity. I was very interested in it [direct marketing]. I simply saw an opportunity out of college for a position at Paul Fredrick, applied and was hired for a position of really a circulation assistant. That’s kind of where it began.
CS: What was your biggest initial challenge starting out in the catalog industry?
SD: My biggest surprise was how much this industry was trackable. We’re measuring everything. So it was kind of getting my head around the fact that the majority of the questions that we have to ask ourselves in terms of business direction, or even where does the next catalog that we’re going to be mailing come from? The fact that there is accessible data that’s going to allow you to analyze it and really kind of give you an answer — a quantifiable answer. The recognition of that and how fantastic that is was really kind of my biggest surprise about the industry, and also why I enjoy it so much.
CS: What have been the keys to success at Paul Fredrick MenStyle?
SD: Understanding what we do. As simple as that sounds, really the reason for our existence. We were really challenged by the Internet bubble and what it meant in terms of workplace wardrobe. Recognizing our model, for the most part, wasn’t going to work when people are wearing khakis and polo shirts, if that, if not t-shirts and jeans to the office.
We recognized that our space was business dress. Once we kind of found that we moved away from some of the other things that we were doing that didn’t necessarily fit into that void. I think the clarity there really kind of got us moving in the past few years and really helped us be successful as a business. Clarity of purpose, I guess you would call it.
CS: What individual factors have helped to make you successful in the business?
SD: I guess you’re making the assumption that I am successful. I like to think that I’m not willing to take something at face value, especially based on what I was saying earlier about being able to really find data to prove or disprove things. I’m very willing to ask a question and then go find an answer for it. I’m probably better at asking the questions than I am finding the answers, but I do try.
CS: What about the catalog/multichannel business appeals most to you?
SD: At this point, new challenges. Understanding the behavior that customers have with so many different influencers: Did they make the purchase online because they got the catalog and then went to Google and searched on our brand term, kind of cutting through all of that clutter of data? Trying to figure out what the true answer behind that behavior is. I find that very interesting — can’t say that I’ve figured it out, but I definitely find it interesting. One of the biggest challenges that we have right now in figuring out as an industry, I would think.
CS: What do you think the biggest challenge will be for Paul Fredrick for the remainder of this year and in future years?
SD: For Paul Fredrick, I would say it’s taking advantage of new technology … being able to personalize an experience for a customer to be the most effective marketers that we can be. That’s pretty much what my challenge is going to be over the next several years, especially with cost pressures.
CS: Specifically, what would some of these technologies be?
SD: Well, I think they’re more readily accessible these days online — things like internal search and automated merchandising, general segmentation and personalization of both the Web site and e-mail communications. We’re still trying to break out of the “We have X number e-mail file and every Tuesday and Friday we’re going to mail a message to them.” We want to make sure that we’re sending a valuable message that’s going to make them want to open it. And it’s relevant to them.
In terms of offline, we’ve seen some interesting things start to happen in regards with variable printing. We’ve just started to get our feet wet with that. I think that’s going to be something that’s moving forward at a fairly rapid pace. The quality is starting to be fairly good for that. And really kind of taking advantage of the ability to communicate differently to customer A vs. customer B in a mass marketing event, yet still retaining personalization.
CS: How has Paul Fredrick MenStyle dealt with the rising costs associated with mailing catalogs?
SD: The first thing that we did was recognize that even years ago the cost and available pool of customers that we were going to be able to acquire through the mail was dwindling and becoming pricey. So the first thing was developing other ways to acquire customers.
More recently, with some of the postage increases that we’ve seen, it’s really kind of evaluating what we can do in terms of a piece to save costs — whether it’s trim size testing or moving our clearance books to slim-jim format, which doesn’t appear that that’s going to be the answer moving forward. Those are some kind of short-term things that we’ve done. But I think it really kind of plays into what I was trying to say with the last point, “What can we do to be more effective?”
It’s not all necessarily about controlling costs. If you can increase response, it does the same thing. And it’s actually going to end up better for you in the long term … just being a more effective mailer. If somebody doesn’t want to get the catalog or this isn’t the right time to send them the catalog, recognize the fact that they’ve been priced out and don’t mail the piece and spend the money somewhere else. Kind of looking at it on a line-item basis is the most effective way to allocate a dollar. I think we’ve done a fairly good job with that, especially on the acquisition side.
CS: Does the catalog still prove to be an efficient customer acquisition tool for Paul Fredrick?
SD: Most definitely. In the analysis that we’ve done on lifetime value of a customer, with our models, a catalog customer is far and away the most profitable for us to acquire. But there’s not enough of them out there. And it does cost more up front to bring that person in. At the end of year one or year three, do we have a more profitable customer? We do. But it’s really kind of limited availability, or pool availability, that we’ve struggled with.
If I could find more catalog customers, I would. But when they’re not available, or it’s more cost-effective for me to pull in three customers from print for every one I’m bringing in from the catalog, at the end of the day those three customers are going to acquire me as much on the back end as that one from the catalog. We’ve kind of based our logic in the math of it all and tried to spend according to those rules that we’ve developed.
CS: What has Paul Fredrick done to make itself more of a “green” company?
SD: We’re walking down that road. We’ve asked the question to ourselves, “Do we do as good a job of it as we can be?” No, we’re not. Do we recognize that and are we looking at correcting that? We are. We’ve signed up with Catalog Choice; we’re making use of the unsubscribes that they’re passing along to us. We evaluate that when we find where we’re buying our paper from.
The industry in general, as much as it’s not totally environmentally friendly, I don’t think it’s necessarily as bad as the consumer may think it is. I think the consumer has a picture in their mind of this Paul Fredrick or this Victoria Secret catalog, they’re in the Amazon rain forest chopping down trees. That’s really not the case. We’re working with a paper mill that’s basically a tree farm; and it’s completely sustainable. We recognize that and we’re working with companies, working with mills that do that. We’ve recently added a recycling message to the back of our catalog, and I know that’s one thing that Allen Abbott [executive vice president of Paul Fredrick MenStyle], who’s pretty heavily involved with ACMA [American Catalog Mailers Association], I know that’s one thing that both him and the ACMA in general are thinking quite a bit about.
CS: Have you heard much feedback from your customers on the environmental concerns involved with mailing catalogs?
SD: No, it’s more in the beginning stages. The majority of the messages that we do get from customers are from prospects who basically have received some unsolicited mail. We don’t want to send a prospecting piece of mail to somebody if they don’t want to receive it. I think it’s our job at Paul Fredrick, and our job kind of as an industry, to understand, “OK, what do I do to prevent unsolicited mail going to customers that don’t want it?” We’ve been thinking about that, and I’m not sure there’s a great way to do it out there right now, but it’s really kind of more on the manufacturing side: What can we do to green it up a bit?
CS: What factors help set Paul Fredrick apart from its competition?
SD: I think we’ve got a very sound value statement — the combination of price, quality and presentation works for us. I think the customer recognizes that they’re getting good quality, especially at the price that they’re purchasing it for. And I think we just generally fill a niche for a group of customers that, in terms of style, maybe not all of our competitors are doing.
I think we’ve got a fairly unique take on traditional, classic dress. Yeah, we do it, it’s classic, but we try to update it a bit. And I think we kind of fill in that hole. I also think there’s just generally some nichey things that we offer that people can’t find anywhere else, as well as the selection and the breadth of the selection that we have, even in terms of dress shirts. Just the amount of SKUs and collars and cuff links, things like that that put us at an advantage.
CS: What things are done at Paul Fredrick to keep a fun and light environment for employees?
SD: We make the attempt, both departmentally and corporately, to get together and have some team-building activities — whether it be something as simple as a picnic or an out-of-office event. Yes, we attempt to do it. Do I feel as though we’ve done anything that really is a great time, we have a lot of fun? No. We can probably do a better job of that. But we’ve tried to do some small things to help morale, and I think we’ve done a decent job at that. But we don’t have a comedian come in here every Friday or anything like that.
CS: If you hadn’t gotten involved in the catalog/multichannel business, what do you think you would have done for a career?
SD: I have no idea; I just don’t. I’ve never thought about that before you just asked me, to be completely honest with you.
CS: Your first job out of college was with Paul Fredrick and you’ve been there ever since, right?
SD: I did. So I’ve been here almost nine years and I started off in an assistant position on the catalog side, on the circulation side. I guess I performed well enough to have somebody notice me and worked my way up the ladder quite a bit.
CS: So, the catalog industry is all you’ve known?
SD: Yeah, pretty much. I can tell you what I didn’t want to do. I was fairly certain coming out of school that what I didn’t want to do was get into sales. I really liked marketing and what that meant. What would I have liked to have done? Probably like most people, I would’ve liked to work on the kind of advertising side. Am I creative enough to actually believe that I could have succeeded there, I don’t know. But I guess I like to think that I could have.
CS: Have you had any mentors over the course of your career to help guide your development?
SD: Certainly. Allen [Abbott] has been an incredible mentor for me. He’s got years of experience and he’s a wealth of knowledge and is happy to assist in any way that he possibly can. Yes, he’s got a wealth of knowledge and he’s more than happy to share it, and he’s been incredibly helpful for me.
I think we’ve just generally as a company aligned ourselves with a bunch of vendor partners that fill in that same position as well — very willing to work with us and help and share knowledge. Between Allen and those vendor partners, I think I’ve learned a lot about this business; just about marketing and selling a product in general.
CS: Who would these outside vendors be … printers, list brokers, etc.?
CS: What are your hobbies outside of work?
SD: Up until recently I’ve been assisting in some youth soccer, coaching a youth soccer team, which I can say I enjoyed quite a bit. Other than that, not a whole lot.