Frederick’s Increases DM Budget 20%

Posted on by Chief Marketer Staff

On its way back from bankruptcy, Frederick’s of Hollywood has a lot more to flaunt than risqué underwear.

The company is increasing its $15 million annual direct marketing budget by 20%, flipping the switch on a new, more flexible database and introducing the company’s first branded credit card.

“We’re finally going to get the opportunity to do right by the brand,” said Danielle Savin, vice president for Frederick’s direct division, which yes, really is based in Hollywood.

A $1.5 million branding campaign that kicked off last month and runs through the end of December called “Tease the Season” will enhance the direct efforts. The effort includes radio, transit and billboards primarily in Southern California, where 25% of Frederick’s retail stores are based. All ads carry the Internet address. A second push starts in January and runs through Valentine’s Day.

The bump in marketing funds will be directed at increasing circulation, getting an additional 6 million catalogs out the door to prospects beginning next summer. Rental files and list exchanges are used to find its core customer — mostly women age 25 to 39, 50% of them single, with household income of $75,000 — and to build the 2.6 million-name active file.

Over the last few years, Frederick’s has reworked its catalogs, adding some space between products displayed on the pages to create a more upscale feel. Its merchandise, while still racy, now leans more toward glamour-sexy than raunchy-sexy, Savin said.

A collection set to bow this month is expected to broaden the merchandise base and deliver a new segment of customers with more disposable income. A test in 3.9 million holiday catalogs that began arriving at homes last month unveils the Jacalyn Bennett Boudoir Collection, pricier than other Frederick’s merchandise with nightgowns and robes selling for $118 to $148 each.

Frederick’s, a privately held firm, mails 9 million holiday catalogs and 30 million books annually ranging in page size from 60 to 102. Currently 40% of mailings target prospects, a number Frederick’s plans to increase to 50% next year.

The direct division also made some changes in its catalog request program, which was getting plenty of requests but few buyers.

“We were sending out so many catalogs and getting no response,” Savin said. “I’m not sure who was ordering them, maybe high school boys who had no interest in buying.”

In late October, Frederick’s began charging $3 for a one-year subscription to its catalog, or seven books, that includes a $10 gift certificate with the first purchase. As expected, the level of requests dropped by 75% but those who do subscribe — 300 to 500 per day — appear to be qualified, quality customers. Subscribers receive the catalog by Express Mail in less than five days. Using the old system, it took four weeks.

Frederick’s rolls out its new database this month. With the windfall of new data, it plans to start dozens of targeted promotions based on queries to the file using a variety of criteria not available with the old system, such as promotion, gender, payment type and segment type.

The antiquated system, built in 1988, was cumbersome and inflexible. Half the file — which includes 630,000 last-12-month buyers — is now Internet sold. But over the last two years, as many customers migrated online, the old database was unable to identify who the e-buyer was in a timely fashion. An 18-year-old woman? A 53-year-old man? A former catalog customer? “We lost all visibility as to who was buying,” Savin said. “The house file went from pure source-driven customers to many now buying on the Internet and we couldn’t identify them.”

The new database, developed and managed by Hyphos 360 in Clearwater, FL, is updated nightly rather than monthly.

Frederick’s expects to offer a branded credit card this spring.


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