Kozmo Lays Off Staff; Embraces Catalog Route
Delivery service Kozmo.com fired 60 workers, or 4% of its staff, last Friday. According to a spokesperson those let go include a variety of positions, including programmers and engineers, within its Manhattan-based headquarters.
The company also announced plans to launch a catalog of its home-delivery items on April 1, and will capitalize on its infrastructure by offering its warehouse and fulfillment operations to other vendors.
The catalog, which will go out to 400,000 consumers, will offer selections from Kozmo’s primary product categories, including gifts, food, movies, books and other leisure products. Catalog recipients will be steered toward the company’s call center.
The new 24-page catalog will go to list of catalog shoppers, online shoppers, and “urban sophisticates,” according to spokesperson Stephanie Cohen Glass. The company has been attempting to migrate its audience away from college students to families and executives since mid-2000. Its product offerings have shifted to meet this new market, and Kozmo now emphasizes categories such as prepared meals, baby products, linens and specialty gifts in its marketing efforts.
Plans call for a total of 4 million catalogs to be distributed by year’s end. In preparation of anticipated increased volume, the company is making a $500,000 investment in its New York-based call center. While call center orders tend to be more expensive to fulfill, Cohen Glass said that average order size of between $30-$35 is higher than the $25 seen on those coming in through the Internet.
Orders placed via telephone will have a $10 minimum, compared with a $5 minimum for Web orders.
The move is not Kozmo’s first into the catalog arena. During the 2000 holiday season, the company issued 2 million copies of an eight-page catalog into newspapers within its then-11 markets (as of January Kozmo shuttered its San Diego and Houston operations). The catalog directed consumers both to its Web site and toll-free number (877-GO-KOZMO).
In February Kozmo also issued an 8 1/2 x 5 1/2 four page Valentine’s Day piece that was distributed as a “tip-in” and through other guerilla tactics, according to spokesperson Stephanie Cohen Glass. That piece highlighted Kozmo’s fresh flowers offerings, as well as providing a one-stop source for watches, chocolate and other traditional gifts.
