New online retailing strategy supports Spiegel`s return from bankruptcy
By Linda Punch
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.
Spiegel made category heads for the top level categories simpler by breaking the link for “Fashion and Accessories” into two links: “Fashion” and “Shoes and Accessories,” says David Fry, CEO of Fry Inc., which redesigned the Spiegel site. It also eliminated links for “Gifts” and “Emarkets,” replacing them with links for swim and travel and home and decorating.
“This gives the customer better access to get deeper into the product mix with just one click,” Chivari says.
Selling a lifestyle
Spiegel also took steps to better display merchandising concepts on the home page. “We did a great job in the catalog creating merchandising concepts rather than just product categories,” Chivari says. “We try to sell a lifestyle, but that was not coming through on the web site.”
Chief among the site’s display problems was that product categories weren’t easily visible and required an additional click, he says. And the Idea Resource had no links to product categories. To solve the problem, Spiegel made each top-level category accessible in two ways.
By selecting “Shop by Collection,” shoppers could read advice on new fashion styles or trends in the workplace, then click through to view and purchase the product. By choosing “Shop by Category,” the shopper could view standard product category definitions, with a greater level of detail.
“If she wants to search for tops, she can do that,” Chivari says. “But we make it just as easy to find those same products in our collections.”
Product pages in the old design also made it difficult for customers to buy entire outfits, rather than having to purchase each item individually. “We’re not trying to be an item business, we’re trying to be an outfit business, Chivari says. “The site didn’t allow that.”
One-click outfits
Under the redesigned product pages, customers can buy an outfit or just one item with a single click. Alternative views, size charts and styling tips also were incorporated into the product pages. And Spiegel made it easier for customers to go from the Idea Resource area, where stylists offer advice, to the sale area where they can purchase the outfits featured, Chivari says.
Since implementing the changes, Spiegel has experienced a 19% decrease in home page departures, while page views and sessions increased 14%, Chivari says. On-site search sessions, especially single-word product categories, fell 15% and additions to the shopping cart from product pages increased 45%. Average order value rose 13%.
Spiegel took a different approach in the redesign of its clearance pages, creating a site within a site, with its own navigation tool. “The clearance customer behaves differently,” Chivari says.
Clearance customers visit the site often looking for deals. To make that process easier, Spiegel added a “Today’s Steals” section. Search tools also were added to enable the customer to narrow the search by size, price or category.
“One of the challenges with clearance is you have broken SKUs,” Chivari says. “You don’t have all the colors, you don’t have all the sizes. That makes shopping very difficult for someone who wants a particular color or size. We created a deal finder where she could sort by size and color as well as by product.”
The changes to the clearance section led to a drop of 15 percentage points in the departure rate from the category while increasing the average time spent in the category by 17%. “They came, they saw something they liked, and they stayed on the page,” Chivari says.
Spiegel also redesigned the catalog quick order section to give the customer the same product views she’d see if shopping elsewhere on the site, including product information and content. The goal was to get the customer to order items not just from the catalog but from other sections of the site—so-called mixed orders that tended to have a 50% higher average order value, Chivari says.
“This customer was coming in with a very specific goal in mind—to simply buy those five items and move on,” he says. “We wanted her to engage in the site, we wanted to sell her a few more things, make a better experience.”
Striking a chord
After the redesign, the average order value of mixed orders ran 50% higher than pure catalog orders, mixed orders increased 25%, units per order increased 26% and sales per session increased 11%, Chivari says.
The checkout process also underwent changes to make it similar to competitors’. Spiegel added quick links to information on shipping, security, returns policy and guarantee, as well as posting toll-free numbers conspicuously throughout. The new design also enables customers to store credit card information, so the checkout would be more expeditious on return visits, and it decreases the number of clicks to submit orders from four to two.
“We decided this wasn’t the place to be interesting or innovative,” Chivari says. “The customer is becoming more and more familiar with Internet shopping. You don’t really want to be too different here.”
It’s too early to tell whether Spiegel’s new image as idea resource for women’s apparel and decorating will succeed, says Patti Freeman Evans, retail analyst with Jupiter Research. She notes that it will take time for customers to accept Spiegel as an expert on fashion.
In addition, other online retailers already have staked out the same territory. “Spiegel is certainly making a good effort at it,” she says. “Whether or not it’s working, we don’t know yet.”
There are signs, however, that Spiegel’s repositioning and site redesign have struck a responsive chord with customers—conversion rates have increased 59% for new customers and 43% for old customers. In addition, overall company sales increased 26% in the fourth quarter of 2005 from 2004’s fourth quarter.
With the Spiegel.com redesign behind it, Spiegel is turning its attention to its Newport News brand. A NewportNews.com redesign is scheduled to launch in November.
linda@verticalwebmedia.com
