HOW THEY SELL THEMSELVES
WWD TALKED TO VENDORS AND RETAILERS TO FIND OUT HOW THEIR TOP MARKETING MOVES PAID OFF, AND FOUND THAT STRONG STRATEGIES DON’T ALWAYS REQUIRE BIG DOLLARS.
Byline: Cami Alexander
When it comes to being successful at marketing, specialty store owners are in agreement — the traditional ways of reaching customers, including newspaper advertising, aren’t always the best.
“We are in a niche business, and newspaper is a mass medium,” said Bob Benham, owner of Balliet’s, Oklahoma City, which is a women’s better-to-designer store.
“Newspaper sale ads have fallen on deaf ears for the past several years,” added Bill Dodson, president of Dallas’s Lilly Dodson, a women’s designer store. “This may be the result of an oversaturated market.”
Other retailers add that newspaper advertising is just too expensive for them to see a proportional return on their investment and that a store has to be more innovative to get and keep a customer’s attention.
So which advertising channels offer the most lucrative yield? A practice that’s worked for Benham at Balliet’s is what he refers to as “segment of one” marketing — bringing the customers in one at a time.
“Advertising efforts intended to produce hordes of customers generally fail,” added Dodson. “We cater to a relatively small percentage of the market, and our focus is on target marketing, one customer at a time.”
Judy Margolis, owner of Origins in Santa Fe, calls it “niche marketing,” a theory similar to Benham’s, that’s about bringing in customers one small group at a time.
“Everything we do is highly targeted,” added Benham. And so say other specialty retailers, who are known for their successful marketing techniques.
One commonly used method is special events — trunk shows, fashion shows, luncheons, coffees or cocktail parties.
“We are event driven,” added Dodson. “While this is not unique among fashion retailers, it has been a hallmark of Lilly Dodson for many years. Our runway productions have earned us a favorable reputation in a highly competitive market. Trunk shows generating over $100,000 are not unusual. Our most successful one, which was for Escada, netted over $2 million in a three-day period several years ago. The runway show included a live Bengal tiger — which I guess would fall into the category of publicity stunts — but the results and press that followed were enormous.”
Don’t know anyone who can lend you a Bengal tiger? You’re not out of luck. Betty Thrasher, owner of The Rosebud, a better-to-designer specialty store in Temple, Tex., says her store benefits from simpler events.
“We invite customers to the store for lunch, coffee or champagne,” she explained. “While socializing, the conversation invariably gets around to clothes, and quite a few purchases occur.”
Origins in Santa Fe, which sells a lot of one-of-a-kind items and wearable art, also relies heavily on special events.
“In the summer, which is our busy season, we have trunk shows every weekend spotlighting a wearable artist, and often a jeweler or an accessories person with a clothing person,” said Margolis. “And sometimes we just have shows of textiles. It’s a constantly changing circus here, which keeps people coming back. Every weekend in the high season, we create a reason to come by Origins. There will be something new that you haven’t seen before.”
Margolis also caters to the frequent art-related conventions and other special meetings that come to her town.
“We have a lot of special groups that come to Santa Fe. We will coordinate a show that ties in with a convention and give people a reason to visit us,” she explained. “Santa Fe gets asked to host a lot of conventions geared toward the arts. We are able to give the group a party or breakfast or some special event that we create especially for that group.”
Margolis even remodeled her store and cleared out the center so that she would have room to host such events.
“This would have been very hard to do in our old store. Now we have places for people to sit. It’s a much more fluid space.”
At BB1 Classic in Houston, which opened its third store last year, owner Cali Saitowitz focuses on events to celebrate the opening of new stores.
“We do charity benefit tie-ins with our openings,” she noted. “We probably had 300 people come to our last opening. We had a deejay and catering. When we do an event, we do it properly. We had a great return on that.”
Saitowitz also hosts trunk shows, calling them wardrobe clinics, along with a luncheon. “We produce a pretty nice invitation and ask for an RSVP. Normally, we have a very nice return on that sort of special event,” she said.
Working with charities at her grand openings has also gotten Saitowitz involved in major nonprofit fund-raising events, such as the Cattle Baron’s Ball benefiting the American Cancer Society. “These events are very big, and people are aware of them. It gets our name out there.”
But what BB1 Classic is really known for is its windows.
“I have always had phenomenal window displays,” explained Saitowitz. “I don’t make the windows look outrageous, but they have to be fun and just different…we make a huge effort with them.”
Another very popular method of target marketing is direct mail. Despite her grand window displays, Saitowitz said BB1 Classic gets its best return on investment from its direct-mail efforts. “To bring someone into the store, direct mail is the best. When we mail to our customers, we offer them something — tell them about a sale, include an invitation or offer a birthday discount. We send birthday cards to our customers on our mailing lists every month.”
The Rosebud’s Thrasher also believes in contacting her customers through the mail.
“We believe in very personal service, hand-written notes, phone calls and direct mail such as newsletters and postcards,” pointed out Betty Thrasher, owner. “All of these are effective. However, my newsletters are hand-written and loaded with great ideas. I know this to be true because my customers call and come in because of something in the letter that appeals to them personally.”
Balliet’s likewise produces a regular newsletter to customers and also does a lot of vendor mailings.
The key to implementing any of these marketing efforts successfully is keeping detailed customer lists.
“We keep excellent records on our customers,” remarks Thrasher. “We know what they have previously purchased from The Rosebud and what they may need to extend and enhance their wardrobes. We pay close attention to their lifestyles also.”
Balliet’s keeps a primary database of customers, but also sorts that list by the vendors whose products their customers buy. Most stores have customers sign up at the store to be on their mailing list. Some also encourage e-visitors to their Web sites to be on paper mailing lists.
The Web site, indeed, is becoming an increasingly important merchandising tool. “Customers who know us keep informed about us on our Web site, bb1classic.com,” explained Saitowitz, who added that he’s taking the slow, but steady approach to building the site. “We have some e-shopping, but mainly it’s to keep our customers updated on what’s going on with the store. Many of our customers move away and still want to keep in touch and make purchases. It can be a very big part of my business.”
Judy Margolis at Origins is also developing a Web site, but it won’t be up for a few months. “Our Web site will be tricky because we carry so many one-of-a-kind items.”
Chico’s, a national chain based in Fort Myers, Fla., with 255 specialty stores selling casual sportswear in 39 states, believes in rewarding its frequent shoppers.
Two years ago, the chain launched its Passport Program for regular customers. Customers get a Passport card that they bring with them when they shop. Their purchases are recorded in the company’s database, and when a customer reaches $500 in cumulative purchases, she is entitled to a five percent discount on all future purchases — off of full price or a sale price. Passport customers who achieve the $500 goal also get free shipping.
“When I joined the company in June of 1999, we had 40,000 names or so in the Passport program,” pointed out Jim Frame, vice president of marketing for Chico’s. “Right now, we have about 900,000. Obviously, it’s been successful in terms of its growth, but more importantly, in terms of its benefits to the company and to the customer.
“We can track the sales from customers enrolled in the program — right now, they’re responsible for about 30 percent of our sales,” he added. “These customers shop in our store more often and spend more per year than our average [client].”
Some stores insist, though, that nothing beats good-old customer service to bring in and keep customers.
Keeping customers coming back is “best achieved by exemplary or unexpected customer service,” reasoned Dodson. “Our sales associates regularly visit their customers’ homes and reorganize their closets.” This is usually done with an attending seamstress in tow, he explained.
“Associates will frequently buy items from other stores to add the perfect finishing touch to an outfit,” he went on. “Many of our associates are well-traveled and can confidently suggest appropriate attire for special occasions in other countries. We become concierges and travel agents for many of our customers.”
The sales team at Origins can’t often visit their customers’ homes since they live all over the world, but during the off-season (and all year round for very special customers), they send out “pick boxes” or approval boxes, to the favored few.
“It’s like what some of the department stores do when they do personal shopping for people,” pointed out Margolis. “All of my staff is qualified to do this, primarily for customers whose tastes are familiar to us. And we do it mostly on request.
“When we get new collections in, we call people and see if they would like to receive an approval box; we send it out, and they try it on in the comfort of their own home,” Margolis continued. “They return what didn’t work, and we charge them for what did. We work with a lot of people in Hollywood, including personal dressers and stylists.”
Is the daily or weekly newspaper totally lost as a medium for reaching customers? No, say many specialty stores. Origins does a good amount of local advertising, and a lot of what Judy Margolis calls “high-profile” advertising in magazines that reach people in other parts of the country, such as the Santa Fe Catalog, Performance magazine and the Santa Fe Opera programs.
Although Balliet’s hasn’t placed an advertisement in a newspaper since 1996, they insert their newsletters and vendor mailings into local newspapers in targeted, higher-income neighborhoods. They also register their Web site, http://www.balliets.com, in the search engine of the largest nearby daily newspaper, the Daily Oklahoman.