Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
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E-catalogs are, of course, simply the latest evolution in a process that has seen e-mail marketing progress from simple e-mail text messages, to e-mail with HTML graphics to video e-mails, each of which has boosted response rates from the previous generation. But as each stage has developed, retailers and marketers have not left the last stage behind. There is still a place in the marketing mix for the different kinds of e-mail promotions. Each retailer simply must determine the goal of the marketing campaign and use the appropriate approach, analysts and consultants say.
For instance, if a retailer is looking to promote short-term sales that draw in new or regular customers, HTML and even text e-mails may suffice because they cost pennies per e-mail. “The majority of retailers still see online marketing as a way to promote brand awareness and loyalty,” says Scott of AMR Research.
But if the goal is to convert catalog shoppers to online in order to save money, or to give customers access to a wide range of products in a format that is easier than browsing a web site, then e-catalogs are a good investment, they say. Furthermore, the birth of e-catalogs doesn’t mean the death of paper catalogs. “Our objective was to see if we could convert catalog customers to online shopping,” says Tony Gasparich, vice president of Internet for West Marine. “Half of the customers we sent the e-mail catalog to were catalog customers and half were online customers. We are finding that some catalog customers still like the catalog.”
BMG used Mobular Technologies’ Mobular Engine to deploy an e-mail campaign that presented nearly 500 featured selections with streaming audio, searchable by keyword, artist and other details. Recipients were able to browse and search the catalog through their own e-mail software. BMG says it increased the response rates from the e-mail campaign and saw a 17% increase in average order size compared to recipients who received HTML e-mails.
With unlimited distribution, a retailer would typically pay around $6,000 to have a Mobular Engine send e-catalogs. By contrast, printed catalogs cost several dollars each to print and mail. The company creates an ongoing revenue stream by charging retailers additional fees for tracking services.
Going forward, Mobular Technologies is working on technology that will allow e-catalog recipients to shop directly from the e-mail catalog, says Horack. E-mail vendors such as CyBuy have been marketing graphic e-mail products that have similar capabilities within the past year. Mobular Technologies says it may well partner with such a vendor in the foreseeable future, though no plans are in the works yet.
Mobular Technologies already is striking deals with major e-mail marketing providers to assist in delivery of the catalog. Bigfoot Interactive, a provider of e-mail marketing technology and services, announced a deal with Mobular Technologies in October to create, deliver and track interactive e-mail catalogs. Under the agreement, Bigfoot Interactive clients will be able to send Mobular Engine-based e-catalogs as part of permission-based marketing programs. Mobular Technologies also plans to announce a deal with Doubleclick, another leading e-mail marketing company in the coming months. “Combining these marketing technologies will increase the value of online marketing,” says AMR’s Scott.
An even newer take on e-catalogs downloads onto consumers’ desktops
Although retailers are only just beginning to realize the potential of e-mail catalogs, vendors already are developing offshoots of the product to boost e-mail marketing power. Australia and New York City-based The Wotch Network began marketing downloadable mini-books during the Sydney Olympics last year and has been wooing retailers in the U.S. Wotch CEO Colin Fabig says response rates during the product’s test period were promising- ranging from 25% to 35%. Fabig says the Wotch e-booklets cost only about 87 cents each.
Retailers can use the Wotch product to send e-books, e-catalogs, or e-brochures to customers’ e-mails. The technology does not rely on the e-mail system of the recipient. Rather, it sniffs out the recipient’s browser capability and sends that person a message connecting through a browser. Retailers can choose to have that e-mail connect to their own web sites. The end result is a customized electronic presentation that looks like a book on the computer screen. The potential problem with this method is losing consumer interest during download time. Fabig say that while it takes from 3 to 10 minutes to download, test users went through with it.
The Wotch differs from others, such as Mobular Technologies’ e-catalog, in that the Wotch version sniffs out the e-mail capability of the recipient, while Mobular Technologies Mobular Engine provides software and a compressed catalog file regardless of the recipient’s web connection.
A recipient who downloads the e-catalog or e-brochure to a desktop can reconnect at any time to browse and shop. Fabig says 6% of those who tested the product used it to make purchases. The company plans to add a permission-based alert feature that would give the recipient a pop-up window with updates on featured products or sales. The product also generated viral marketing capacity of up to 25%, which means that 25% of requests to download the e-catalog or e-brochure came from recipients who had been forwarded the original e-mail, says Fabig.