September 28, 2006, 12:00 AM

Extreme Makeover

A new online retailing strategy supports Spiegel`s return from bankruptcy.

You may not be able to teach an old dog new tricks, but Spiegel Brands Inc. is proving that’s not the case for old retailers. For the past two years, the venerable direct marketer has slowly worked its way back from Chapter 11 bankruptcy by transforming itself from just another struggling retailer of women’s apparel and home products to a fashion resource with growing sales and engaged customers. And its redesigned web site-launched in October 2005-is playing a key role, helping define the retailer’s new image and contributing increased revenue to the company coffers.

Since the redesign, customers are shopping more areas of the site and spending more, says Tony Chivari, senior vice president of marketing. It didn’t take long for the new site to show its impact on Spiegel’s financial performance. Overall company sales in the fourth-quarter of 2005 rose 26% over the year-earlier quarter, as the web accounted for 50% of total sales.

New branding ideas
But producing those positive numbers first required several steps to improve the online shopping experience, as Spiegel tested and reworked site design methods including reducing page clutter, reorganizing product category links and making the web site’s product displays and details more consistent with the catalog’s.

The new design was crucial in addressing the biggest problem facing Spiegel in making a comeback: Convincing its target customers-women in their mid-40s, college educated, and employed full time-that it no longer was the stodgy department-store-in-print that sells everything from apparel to vacuum cleaners.

“We talked about being a start-up with a 140-year-old brand,” Chivari says. “Obviously that led to some issues, some challenges and the need to redesign the web site.”

Based on customer research, Spiegel in January 2004 began to reinvent itself as a cross-channel “Idea Resource” that sells versatile, unique apparel and fashionable home products consistently through its web site and catalog.

“Our customer research told us, ‘I love going through Spiegel, I get tons of ideas, I get all of this inspiration,’” a Spiegel spokeswoman says. “We pulled on that thread and became the ‘Idea Resource’ for ideas and inspiration on dressing and decorating.”

Pressure on the web
Spiegel, with its roots as a cataloger, turned to its catalog to begin building its new image. It added editorial sections that discuss fashion styles and trends. In one section, a celebrity stylist talks about how a woman can take 10 basic pieces of clothing and mix and match them for all facets of her life. In another feature-“Five Days in 1 Bag”-Spiegel spotlights five outfits that could fit in one suitcase. And in yet another section, Spiegel takes real women from different walks of life across the country and shows them how to put together outfits that work for their size and fit.

“What we’re really trying to accomplish is give the customer the confidence to dress appropriately, to dress with a fashion edge,” Chivari says. “We’re trying to give her advice and inspiration through photography so she can feel confident in her look.”

Once the repositioned catalog began to gain traction with customers, Spiegel’s next move was to redesign the web site to reflect the changes made in print. Because Spiegel cut back on catalog circulation to control costs, the web site has taken on a larger role in the company’s strategy, Chivari says.

“That’s put even more pressure on the Internet to produce,” he says. “We had a new positioning-‘Idea Resource’-and we feel we executed it wonderfully in the catalog. But we needed to translate that into the online experience.”

But as Spiegel began redesigning the web site to reflect its new image, it ran into performance issues. The Idea Resource, though popular in the catalog, had failed to attract many visitors on the web. The missing link? Poor online page design and merchandising, Chivari says.

Engaging shoppers
Spiegel hired web analytics firm Coremetrics Inc. to track how users navigated the site and where they experienced trouble. One glaring problem: low conversion rates for new shoppers, who tended to be heavy users of single-word searches that limited their shopping experience. “Customers were not using our navigation,” Chivari says. “They were not engaging in the site in the traditional way or the way they used other people’s sites.”

While users who went to the Idea Resource area had a 30% higher conversion rate, almost nobody clicked on it from the home page. “And this was our new repositioning,” Chivari says.

And Spiegel discovered that while existing customers had “great” conversion rates, most of them were going to sale and clearance pages. “Anybody trying to run a profitable business knows you need to sell some full-price merchandise,” Chivari says.

In addition, the existing customer wasn’t spending much time on the site. “She came, she saw, she shopped, she bought, but she left,” he says. “That is not an engaging experience.”

That left Spiegel with the challenge of designing a site that would appeal to two different types of shoppers with different shopping expectations. By pooling the information collected by Coremetrics with customer feedback and reviews of competitors’ sites, Spiegel began developing a web site that Chivari calls “shopping technique agnostic”-making it easy for the customers to shop by either category or collection.

Cheers for the catalog
But it wasn’t enough to make the site easy to use. The redesign also had to mirror the catalog, Chivari says. “We want the customer to shop with us in whichever channel she’s most comfortable on any given day of the week,” he says. “Therefore, we want the image and the product that our image reflects to be similar in both places-to be seamless, really.”

Achieving that goal began with reducing the clutter on the home page that discouraged users from going further into the site. That entailed eliminating redundant links. Product category heads also were too broad, with 75% of business coming through two categories. “Basically, that means that navigation is not very effective,” Chivari says.

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