Tuesday, 22 June 2010

VAT to rise to 20% from 4th January 2011

They saw it coming... In a recent poll of 675 UK retail decision-makers, marketing agency More2 found that 68 percent of respondents were planning to up their prices when VAT increases. A mere 10 percent said they would absorb the cost.

To offset the higher cost, just 9 percent of the retailers polled said they would cut their marketing budgets, though 7 percent said they would have to make redundancies.

Demonstrating a rather laissez-faire attitude, more than one in five of all respondents didn’t yet have a plan in place of how to deal with a potential rise.

The chancellor has just ended his speech, confirming that VAT will rise to 20 percent effective 4th January 2011. What I want to know is how is that 5 percent of respondents that didn't have a plan going to react now? Will those that pledged to absorb the cost do so, even though there are seven months to go until the new rate takes effect? What are the wider implications of the rise?

Please join the debate and leave your thoughts in the comments box below.--MT

Friday, 18 June 2010

Daddy or chips

Remember that advert for oven chips where Big Sister asks Little Sister which she loves most: “Daddy or chips?” Little sister thinks long and hard about the question and in the evening, as Daddy pinches a chip from Little Sister’s plate she concludes “chips…” Poor Daddy, he always gets a raw deal. So how are retailers combating it this Father’s Day?

As it’s predicted that we’ll spend more on Father’s Day this year—Verdict estimates that Brits will spend £771 million preparing for 20th June this year—I wanted to analyse what sort of offers retailers were promoting in order to get us to part with our cash and treat our dads. In a rather unscientific (and random) way I picked 12 emails that landed in my inbox with reference to Father’s Day.

Only one of those emails, sent on 16th June from gifts cataloguer Lily & Lime, promoted a free gift-wrapping service. It was also in the minority of emails that promoted free shipping. Of those that did offer free delivery, Direct Golf set a £10 threshold, whilst vitamins and supplements marketer Trust William wanted me to spend £30 to qualify for free delivery. Considering that Trust Williams’ main Father’s Day offer was a £15 shaving pack, I thought it was a bit mean that I had to spend twice as much to enjoy free shipping. What’s more, when I visited the website I couldn’t find any information about how much delivery would cost. That’s something Trust William should probably look to rectify.

Out of 12 emails, only three were overtly price-driven. Direct Golf had the biggest price-related promotion. It featured a variety or price points: From golf balls for £19.99 to a putter that was reduced by £109 to £60. Personally I feel more could have been made of the high-end gifts, for example, a GPS golf device worth £329 and premium golf shoes at £90 were subtitled “Luxury Gifts - For That Extra Special Dad!”, but the images were much smaller than the main offer. Why?

Gifts and gadgets etailer I Want One of Those is another that went straight for my wallet. Its email on 2nd June promoted a 50 percent off sale, though its “IWOOT Top Six for Father’s Day” were not in the sale. This email was choc-full of offers and promotions. There was a competition to win a mini helicopter if email subscribers wrote in with tales of their embarrassing dads; there were videos to watch, and 25 percent off photo gifts.

Speaking of videos, that’s the tactic Marks & Spencer went for. Its robust email directed customers to its Father’s Day video featuring former footballer Jamie Redknapp, it also set up a dedicated Father’s Day shop on its website where all the items featured in the email could be found. The email itself promoted wine, strawberries, gifts in all price points, personalised cards… but no discount or free delivery. M&S is obviously hoping we love Daddy more than chips.

Of the other emails I looked at, Joules stood out with the most eye-catching email. It proudly promoted the “Father’s Day Gift of a Lifetime”. Indeed the offer looks great--a day’s sailing for Dad and eight family members or friends on a 60ft yacht. I was least impressed with Natural Collection, which in addition to making Dad share the email with The Fat Bird (a type of bird feeder before you ask), got the day wrong! It had the date as Sunday 21st June—as one famous Dad would say, “D’oh!”--MT

Tuesday, 8 June 2010

May Catalogue Log

Having recently finished putting together the Multichannel Year Book commemorating the winners of the ECMOD Awards for business excellence in 2009, I noticed many trends among the winners. Most notably, those that were most successful had learned to do more with less. Amongst other tactics, it meant reducing circulation, frequency, or pagination of their catalogues and experimenting with different formats. This maxim has continued through to 2010; last month’s Catalogue Log recorded half the volume of catalogues compared with May 2009.

There could be a number of reasons to explain why we’ve received fewer catalogues last month compared with a year ago. It could be that cataloguers are simply mailing less this year, or that we’re not bringing as many copies into the office from home compared with last year. Or it could be that mailers see us as tyre-kickers, and are mailing smarter, choosing to omit our prospect names from their files.

This theory could also explain why most of the catalogues we received (61 percent) carried some sort of promotion on the cover: They were pulling out all the stops in order to get us to spend. The most popular offer was a sale or discount (32.5 percent) as used by Cath Kidston, which inserted its full catalogue into Easy Living’s May issue carrying a 15 percent discount for the magazine’s readers.

Sales and discounts were also highly prominent last May—42.6 percent of catalogues featured some sort of price-related promotion on their covers this time last year—but it’s come as quite a surprise that in 2010 free delivery and free gifts were more than twice as popular. This year, 24.1 percent of catalogues promoted free delivery on their covers compared with a mere 11 percent last year. Whilst a number of cataloguers, including apparel merchant Lands’ End and discount-fashion catalogue M and M Direct, set a threshold requiring customers to spend more than a certain amount on their order, less fussy was water gardening cataloguer PondKeeper, which offered all customers free next-day delivery.

Plus-size apparel retailer Evans sent us two catalogues in May. The catalogues had the same cover image but carried two different offers. One promoted free delivery on orders of £40 or more, the other gave us 20 percent off our next order. The free delivery offer was sent to an existing customer whilst the discount was aimed at the prospect.

May 2010 saw a record number of catalogues offering a free gift (20.5 percent). The highest percentage up until now was recorded in June 2009, when 17.8 of catalogue covers promised a free gift. In May 2009, the figure was just 11 percent. Freebies promoted in consumer catalogues ranged from a raincoat and reversible fleece gilet from Daxon, to a free LED reading lamp for Daily Mail readers from Clifford James.--MT

Friday, 4 June 2010

Off-topic but on target

This week I chaired a Q&A session at Onepost’s Ask the Expert event. During the session, in a segment about social media, one of the delegates asked whether it was “acceptable” to blog about his personal hobbies and interests—such as posting poems, or favourite recipes—on his company’s blog. The consensus at the table was that he should steer clear of off-topic posts. After all, the amount of information all of us have to consume on a daily basis is so vast (according to one speaker, a week’s worth of New York Times content is more information than a person living in the 18th century would consume in his lifetime), that it is probably best to stick to what your audience, or rather potential audience, is expecting from you.

Nigel Cliffe of Cliffe Associates said potential customers could find it a turn off to read more personal blog posts. As the delegate was a director of a business-to-business company selling niche educational supplies, his customers were buying for business, rather than pleasure. Blogging about the founder’s daily life, therefore, may not be of interest to readers. If there are too many posts that appear irrelevant, Cliffe warned that readers eventually will tune out. They will miss the posts that are of interest; those that drive brand awareness and ultimately, sales.

On the train home (which was running late, so I had plenty of time to think it through) I began to wonder whether off-topic blog posts could work for that delegate’s business. Take Hush for example. The loungewear cataloguer has built its brand on recommending books, hotels, and even chocolate brownies in its enewsletter, catalogue, and customer magazine. According to founder Mandy Watkins, this tactic works. She sees an uplift in sales after each email broadcast and at the trade fairs she exhibits, customer feedback usually centres on how much they love Hush’s newsletter because it offers them something different.

Another business is Joules. This cataloguer/retailer, which has its roots in the equestrian market, has built its brand around the strapline “Living the good life”. Its blog is full of stories of pancake races and updates from the Joules vegetable patch. These editorial features have seemingly little to do with selling clothes, but here and there you’ll find news of store openings, and dates for upcoming shows where customers can meet the Joules team face-to-face.

Then of course, there’s Boden. A brand built around the founder’s personality. But all of these examples are from consumer catalogues, not business-to-business merchants. The trick, as always, is knowing your audience. For the delegate at yesterday’s event a more personal approach could work, if done right. He is a former teacher and now sells supplies to special-needs teachers; posting a poem that is a play on words for example, could then be used as a classroom teaching aid. Or posting a recipe, provided that it is child-friendly, could be used by a teacher overseeing an after-school club. In short, off-topic posts may not be as random as they first appear.

In order to get the balance right between off-topic and more directly sales-oriented, all the experts recommend testing. If you are a b-to-b cataloguer, your customers probably signed up to receive your enewsletters or RSS feeds of your blog posts because what you are saying is directly relevant to their businesses. They want good deals, latest product news, and updates about the sector they are working in. They might not want to hear about your daughter’s recent violin recital, or your son’s winning goal at the weekend’s under-11s football match. Check your stats to see which posts or enewsletters are getting the most visitors, or what your customers are searching for on your website and provide more of what they are looking for. If you are still not fulfilled by only writing a personal blog once in a blue moon, perhaps you should set up a personal account and say whatever you like.—MT

Tuesday, 1 June 2010

Have your cake and eat it

As consumers we’re getting increasingly used to emails triggered by special events such as birthdays or anniversaries. But as far as I am aware, few catalogues are using triggers to mail out their main books. Sure, you’ll get a barbecue special if the weather hots up, or perhaps a themed mailer around Valentine’s or Father’s Day, but will you get a full catalogue based on a trigger? The answer is invariably, no.

Then comes along gourmet food catalogue Forman & Field. It sent the Catablogue e-business office its annual 2009-2010 catalogue in May. The person it was addressed to has a birthday in June, a fact the covering letter was well aware of: “It may not be for a few weeks yet, but I thought you may be planning a special soiree and what better way is there to celebrate with friends, family and the finest food available.”

To further encourage the birthday girl to buy something from its catalogue, Forman & Field offered 50 percent off any cake or dessert, because no birthday would be complete without cake.

This simple idea is brilliant on a number of levels. First, it refreshes the annual catalogue, which may have been in circulation for more than six months already. Second, it shows how relatively simple data segmentation—it could be as basic as everyone on the list with a birthday in June—can form the basis of a trigger and a legitimate marketing opportunity. Third, the goodwill the offer creates by showing that Forman & Field cares about its customers and “remembers” their birthdays is invaluable for fostering customer loyalty.

A lot of companies pay lip service to trigger marketing—so it’s refreshing to see a cataloguer putting the concept to good use.—MT