Groupon says its focus is on the bottom line, rather than top-line growth.
Everyone of a certain age and over a certain income level knows who Eddie Bauer is. For 79 years, the Redmond, Wash.-based retailer has built a formidable brand name in casual clothing, outerwear and housewares. Since 1945, it has been mailing catalogs to upscale customers and upscale wannabes. In that time, it has created a strong identity as a quality retailer who really knows who its customers are.
By 1953, Eddie Bauer was so well known for its quality outerwear that it outfitted several notable scientific expeditions, including trips to K2 in the Himalayas and to Antarctica.
In 1994, though, Eddie Bauer started a trek of its own into unknown territories: The Internet. Its mission: Expand its customer base to consumers who were taking advantage of online shopping.
But when Eddie Bauer got to the Internet, it found someone had already blazed the trail: Its own customers and those who exactly fit the Eddie Bauer profile. And so Eddie Bauer found that its challenge was not to create a name for itself on the Internet or educate its customers about the Internet. Its challenge was to get Web trekkers to stop and shop at the Eddie Bauer site. “Our target, in age and income, really is an Internet customer,” says Judy Z. Neuman, division vice president of interactive media for Eddie Bauer. “Our objective was using the Internet as an opportunity to extend our brand to garner new customers-those who were coming off of online sites and then introduce them to our retail stores and catalog. It’s our multi-channel strategy.”
But with no map for how to attract customers navigating the vast online frontier, and a limited budget, Eddie Bauer had to explore many different trails to determine the best route for driving online shoppers to its Internet site. Among its approaches:
• Contracting with an outside agency to help determine where its customers were on the Internet and what kind of Web advertising they would respond to.
• Hiring a specialized ad agency to develop ads that would tie into Eddie Bauer’s traditional image but that would be effective on the Internet.
• Making deals with portals such as America Online, which gets millions of visitors a month.
When Eddie Bauer entered the online world in the early 1990s, it was seeking electronic shopping alternatives earlier than most other catalogers, testing such media as CD-ROM, interactive television and a Time-Warner cybermall, called Dream Shop, in the early 1990s.
“We cut our teeth with early tests and learned all about the medium,” says Neuman, who notes that the online store already has lived through and learned from four holiday shopping seasons.
Eddie Bauer had good reason to be interested in electronic selling. It targets people aged 35 to 44, but with a broader age range of 25 to 55, who have average annual income of $65,000 and up. Eddie Bauer characterizes them as highly educated, family-oriented and active Net users.
Eddie Bauer set out to develop a Web presence on America Online in 1995 and eventually launched its own Web site in 1996. While the retailer initially planned its Internet marketing and advertising inhouse, Eddie Bauer began in fall 1998 to fine-tune its online advertising and marketing strategy, launching an online effort with the help of outside experts.
Today, Eddie Bauer works with Seattle-based Internet media buyer and planner Avenue A Media, which specializes in tracking banner ad performance, and with the creative power of New York City-based I-Traffic, which handles the creative end.
Leveraging its well-known brand name, the retailer sought not only to build a presence on the Internet anchored by consumer familiarity of its products but, more importantly, to generate traffic and capture online sales.
Eddie Bauer uses banner advertising to attract shoppers via sites that fit its demographics. It runs banner ads on or provides text or hotlinks on such major search engines as Lycos and Excite. And it has a presence on major shopping areas such as those on America Online and the Microsoft Network.
Although many retailers use banner ads to get their names recognized, Eddie Bauer was one step ahead. One of the most distinguishing characteristics of Eddie Bauer’s online marketing is that it does not focus on promoting its brand name, but skips to the next step in marketing-generating sales. “Our brand is almost 79 years old and people already know us,” says Neuman. “We would not be where we are in the online world without the other storefront and catalog channels. ”
Online marketing experts say Eddie Bauer has a supreme understanding of what its customers want, which is key to developing an online relationship. “Judy has a good pulse on the Eddie Bauer customer,” says Lauren B. Freedman, president of Chicago-based e-tailing Group. “The more information a retailer has on its customers, the better.” The challenge then is to drive traffic, figure out where customers will come from online and how much it is worth paying to get them to shop on the Web site, says Freedman.
Turning a customer familiar with Eddie Bauer into an actual shopper offers its own set of challenges: finding sites that such customers frequent. Working with Eddie Bauer, Avenue A uses a tiered approach to the demographics, says Terry Franklin, account manager. The first group includes existing online shoppers who also shop offline, then new Eddie Bauer shoppers who shop online somewhere, then a wider group of consumers who have not shopped for apparel online but have made an online purchase, and finally the wider net of people who are new to online shopping.