The Spiegel Link

Cataloger restyles its technology and staff in hopes of increasing online sales

the Spiegel Group, hoping to grow its online sales to 20% of its total business within five years, is restyling its technology and aggressively increasing its Web and e-mail efforts. “We see ourselves at the very beginning of the process,” says Christian Feuer, vice president of marketing and advertising production for the firm.

Earlier this year, the firm hired a new Internet team, headed by Richard Burke, vice president of Spiegel I-media. It also installed Pindar brand software, which will help track and personalize online marketing and e-mail programs.

Spiegel’s marketing, production and both online and offline departments now share the digital assets made available by the software, which is manufactured by Dynamic Trade Inc.

The upgrade, which will eventually include several other elements, is one of several decisions made by Spiegel executives a couple of years ago when losses and stagnation had brought the company down at the heels.

“We went through some pretty tumultuous times during the 1990s,” Feuer says “We’ve been able to turn around and grow the catalog business. Now we’re able to focus on the Internet business.”

These changes are being reflected in the numbers. Online sales totaled 2.7% of the Spiegel Group’s revenue in 1999. But in the second quarter of 2000, they rose to 6.2% of total revenue of $25.8 million. That figure includes catalog and online sales for several Spiegel businesses, including Spiegel Catalog Inc. and its online unit, Spiegel.com, as well as Eddie Bauer and Newport News.

And just what is Spiegel doing to stimulate these sales? A little of everything. For instance, it places advertorial copy with highlighted links on other Web sites. It also markets through e-mail, banner ads, pop-up windows and online directory listings (generated by search-engine inquiries).

Last year, Spiegel.com ramped up its e-mail program, testing sweepstakes, special promotional offers and announcements concerning Web site changes and catalog mailings. “About every two weeks we target groups that bought from us,” says Burke.

These campaigns are designed to retain customers; so far, however, e-mail has not worked for customer acquisition. “Now we’re putting systems into place to better segment our e-mail,” Feuer says.

Other Internet initiatives during the past 18 months have included developing marketing affiliate relationships with more than 200 Web sites to increase online traffic for two of Spiegel’s Web sites. “It’s an inexpensive way to acquire customers and build our Web site business,” Burke says.

Campaigns on other Web sites typically involve participating in co-op frequent-shopper programs online by offering points redeemable for Spiegel merchandise.

At its site, www.spiegel.com, the company offers downloadable software to give customers free Internet service through a co-promotion with Santa Clara, CA-based Yahoo! Inc. Software disks are also inserted in catalog mailings. The advantage for Spiegel is it gains access to more data for marketing from customers who register to use SpiegelFreeWeb.

Dynamic Trade Inc. helps Spiegel manage data – along with its online media placement and affiliate marketing program. Spiegel pays a percentage of sales for orders generated through the affiliations.

Feuer describes the recently introduced Pindar software, selected from among five competing programs, as a “digitally assisted catalog management system.” It will support the catalogs and Web sites for the Spiegel brand and the group’s Eddie Bauer division based in Redmond, WA.

The digital technology makes it easier for the catalog unit to test Internet promotions. It can be used for catalog production, and also to upload catalog content on the Web site.

“We’re investing in Pindar from a catalog perspective, but it has other advantages, Feuer says. “We can connect database images in a flexible way to put together offers for specific target groups.

Feuer believes the Internet will be just as important to Spiegel as the entry of women into the workplace during the 1970s (when the firm turned itself from a rust-belt mail order /retail operation that offered easy credit) into an upscale cataloger.

Not that print is being ignored. The firm has reconfigured its catalogs to focus more on apparel marketing and less on housewares.

“It’s important from a marketing standpoint because there is a higher buying frequency with apparel,” Feuer says.

What’s next? Graphics and text for Web site and catalog promotions will be archived and accessible online to create and evaluate offers faster. The goal is to reduce production time and become more flexible with merchandising changes, says Randy Heiple, vice president for advertising production.

And on a broader front, Spiegel could well find itself involved with interactive television. “Today it’s a digital archive system with graphics and text for the catalog and web, but tomorrow it could be adapted for interactive TV,” Heiple says.