What Innovation Means for Brookstone
As a robot rolled down the aisle welcoming attendees of NEMOA's directXchange conference to yesterday morning's keynote presentation, it was clear what the theme of Jim Speltz's speech would be: innovation. The unusual entrance for Brookstone's president and CEO — he followed shortly behind the robot that was broadcasting his voice to the crowd — exemplifies the culture of innovation embodied at the omnichannel retailer of unique gifts.
Speltz went on to spend the next hour detailing why innovation is at the heart of every decision Brookstone makes. It's what gives us a competitive edge, Speltz said, noting that Brookstone sells products that you can't find elsewhere. That's due in large part because the company designs and develops its own products. That differentiation enables Brookstone's products to be price stable — it doesn't have to worry about competing on price with itself — and rank highly in organic search.
In addition to product differentiation, Brookstone prides itself on having an attribution model that helps it get "the best bang for its marketing buck." As an omnichannel retailer — Brookstone sells its products via brick-and-mortar stores, an e-commerce site and catalogs — knowing which marketing vehicle (e.g., email, search, catalog) is responsible for a sale in any channel is critical to the brand's success. Using a statistical model it developed in-house, Brookstone leverages fractional allocation to attribute credit to orders. While far from perfect, the attribution model has helped Brookstone make better marketing decisions.
Speltz cited a recent A/B test Brookstone ran as proof that its attribution model is working. The retailer evenly split a catalog mailing list, with 193,000 people on the list continuing to receive catalogs throughout the year and the other 193,000 people on the list not receiving catalogs for a year. The result: The group that continued to receive catalogs generated an incremental profit — after the postal, paper and printing costs associated with mailing catalogs — of $282,000 to Brookstone's bottom line.