Tuesday, 30 August 2011

Paying a premium

First there was Amazon Prime, then came Asos Premier, now M and M Direct has launched its Premier service, offering customers free express delivery, free returns, priority mailings and exclusive offers.
Amazon Prime, Asos Premier and M and M Direct Premier are membership programmes that charge customers an annual fee for added-value services. Amazon’s service costs £49 a year; Asos currently charges £14.95 and M and M Direct charges £14.99 as an introductory price. But do they represent good deals for the merchant and the consumer?

I looked at joining Amazon Prime, but could not see any immediate benefits as a consumer. Sure, I could get “free one-day delivery on millions of eligible items sold by Amazon.co.uk”, but what about the items sold by third-parties on the site; not all of those are eligible. Not to mention that most items are eligible for Amazon’s free super-saver delivery anyway. I may have to wait up to five days to receive my purchase, but if I wanted it sooner I’d pay the one-off delivery charge. For most items I am happy to wait a few days. Although my family buys a lot on Amazon, I don’t think our shipping costs rack up to £49 a year. Thanks, but no thanks. This offer clearly works out better for Amazon and if people are willing to pay £49 when they could get a very similar service for free, Amazon is definitely the smartest marketer out there.

The Premier offer from apparel etailer Asos is instantly more enticing for consumers. It offers free next-day delivery as well as a returns collection service. I can see the immediate attraction of not having to trudge to the post office to return a parcel. Another benefit, at least for a catalogue nut like me, is that Asos will mail its customer magazine to Premier customers each month. I have bought from Asos a couple of times over the past year or so, but they’ve not sent me a magazine for several months. I was told by a customer services rep that “we send out the magazine every month to a random selection of people who have ordered from us in the last six months. This means that if you keep ordering from us you will receive the Asos magazine,” she directed me to the online version, but it’s just not the same. For £19.95, or even the full price of £24.95, the Asos Premier deal is much better than Amazon’s. As Asos already offers free delivery with no minimum order value, albeit not next-day, I guess the Premier service is a way to reclaim revenue from deliveries. It’s also a great way for Asos to communicate directly with its very best customers. Plenty of online retailers can segment their databases to find out who among their customers buys the most often. But using a service like Premier, Asos knows exactly who its most engaged customers are. To use a much-bandied term, the people who subscribe to a service like Premier are likely “brand advocates”, willing to pay extra for a service from their favourite retailer. Impress these people and they will tell their friends, who may then also join the service, who will tell their friends, and so on.
M and M Direct Premier
M and M Direct’s offer is very similar to Asos. It includes free express shipping, free returns, “priority mailings” and exclusive offers. Already, M and M says 50,000 people have signed up to the programme since March. Again, like Asos, M and M calls out receiving regular catalogues as a key benefit. Its non-offer price is £19.99, cheaper than Asos’s full price. The real added benefit here is that M and M Direct normally charges £6.99 for express delivery and £3.99 for standard delivery compared with Asos and Amazon where customers can opt for free delivery on most items. That means that the service essentially pays for itself after just two orders. For regular shoppers, that’s a very tempting deal.

If I genuinely shopped that often with a retailer, paying for a premium service would definitely appeal. It’s a concept that would work for anything purchased regularly--pet supplies, vitamins and supplements, home-office supplies, childrenswear and baby products, and so much more. If margins permit, we may see many more of this premium services crop up. After all, there’s nothing customers love more than being treated like VIPs.--MT

Thursday, 25 August 2011

You'd better smile

Readers of a certain age would remember a song called Smile by the Supernaturals. The word smile is repeated 15 times during the chorus. I was reminded of that tune when I saw this spread from a recent Bravissimo catalogue. Now, we’re told smiles sell, but I think Bravissimo could tone it down a little…--MT

Wednesday, 3 August 2011

July Catalogue Log

In July 2009 we received 149 catalogues. In July 2010 we received 91 catalogues. Last month we tallied just 64 catalogues—a decline of 30 percent on last year and 57 percent down on two years ago.
Up until now, catalogue volume had been mostly in line with 2010, but July’s crop took a nosedive. A quick look at the data shows we’ve slipped off a number of lists including apparel retailers MandM Direct, Cashmere Centre and Peter Hahn. On the other hand, this year we’ve received mailings from clothing catalogue Peruvian Connection, childrenswear boutique Marie Chantal, and personalised apparel specialist Spreadshirt—so plenty of new names to top up our catalogue stocks.
So what’s the reason for the decline? It could be that, as we’ve suspected before, we’re dropping off more lists than we are added to. No-one wants to waste money regularly mailing a prospect that hasn’t bought in longer than 24 months. Another reason, mentioned by our publisher Jane Revell-Higgins recently, was that there seem to be fewer inserts in national media. We noted only a minor difference of five catalogues, but it is nonetheless, a decline.

Another potential reason is that we are at the height of the summer sale season. Perhaps a tighter control on margins means fewer markdowns and less stock to shift in the sales? You tell me.

But back to the stats. Of the 64 catalogues we logged, just 20, or 31.3 percent, made no mention of a special offer on the cover. That makes July our most promotional month to date, beating February’s record of 32.7 percent. The most popular promotion was a sale or discount, touted on 54.7 percent of all the covers we looked at. Fashion brand Fat Face, apparel and home retailer Laura Ashley and homewares catalogue Peacock Blue all sought to tempt us with money off our order.

Free delivery was the second most popular promotion, offered by 21.9 percent of the catalogues we tracked. Again, this was one of the highest percentages we tracked—significantly higher than June 2011’s 12.3 percent, and just a whisper away from February’s 22.1 percent. Many catalogues elected to set a threshold for a free delivery offer, including charity mailer RNLI, which required customers to spend £25 before qualifying, and educational toys cataloguer the Happy Puzzle Company, which made free shipping available to those who spend £40 or more.

Also more popular, albeit marginally, was a free gift with purchase. It was promoted on 10.9 percent of catalogue covers in July, compared with 9.8 percent in June. My favourite was an offer from Laithwaites Wines, which teamed with Pong Cheese to offer buyers of its Italian wines a selection of free Italian cheeses.  I was also quite taken with apparel cataloguer Long Tall Sally, which mailed me a £20 gift voucher to put towards whatever I liked—no minimum spend, no strings attached. That was definitely an offer too good to miss for the consumer, but it makes me wonder how Long Tall Sally can afford to give every name on its database £20 for free.--MT

Cover story

What would you say are the most important messages to convey on a catalogue’s front cover? Essential, in my opinion, are brief how-to-order details such as a telephone number and website URL.

Most catalogues then opt for including some sort of special offer or benefit, for example “100 new products!” or “Free delivery when you spend more than £50”.

Furniture retailer Furniture Village does all that—a prominent web address and a flash in the top-right corner informing customers they can save up to 50 percent in the Furniture Village sale. But here’s something I’ve not seen on a catalogue cover before: “all stores fully air-conditioned”.

Is this an important selling point? Does it imply that other furniture stores are uncomfortably stuffy? Would the lure of climate control sway a catalogue recipient who perhaps ultimately orders online?

It has been a while since I needed to buy a sofa, but I don’t recall air-conditioning helping me make a buying decision. It seems an odd choice for a cover line, but maybe Furniture Villages knows something we don’t and we’ll finally get the barbecue summer we’ve been promised.--MT