Spokane Journal of Business

Coldwater taps more technology

Retailer debuted ‘webalogs’ last year, says they’ve been a good cross-marketer

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Coldwater Creek Inc., of Sandpoint, is using a new tool it calls a webalog to further its aim of vigorously cross-promoting its three retail channelsits brick-and-mortar stores, its Web sites, and its vast catalog distributionso that they drive business to each other.

The webalog is a printed catalog of just a few pages that exists only to encourage people to visit the companys high-end Gallery at the Creek Web site, says David Gunter, the apparel retailers spokesman.

Its just one way in which Coldwater Creeka company long known for marketing innovationis cross-promoting its businesses to be there no matter how the customer wants to shop, Gunter says.

In the same vein, Coldwater plans to open retail stores in Sherman Oaks, Calif., and Charlotteville, N.C., this summer, plus another 12 to 14 stores throughout the rest of the year. It currently operates 10 stores.

In todays retail world, customers shop very differently, Gunter says. Our best customers are now shopping through more than one channel, which really flies in the face of the reasoning that people will become pure Internet shoppers or pure catalog shoppers and never the twain shall meet. Were finding thats not so.

Other tactics for cross-promoting its businesses: Coldwater Creek customers can return items ordered out of its catalogs to its retail stores, and Internet kiosks in the stores allow customers there to order items online for delivery either to their homes or to the stores. In addition, the companys print catalogsof which it mailed 183.6 million last yearprominently carry the companys main Web-site address as well as the street addresses of its retail stores. Customers who order online can, with one click of their mouse, ask to be added to Coldwaters catalog mailing list, and every customer who buys an item in one of Coldwaters retail stores is asked if he or she would like to receive e-mail correspondence from the company, Gunter says.

Were finding theres an incredibly powerful synergy between the three (marketing) channels, he says.

Coldwater introduced webalogs in its third fiscal quarter last year to promote visits to galleryatthecreek.com, a Web site that carries a limited selection of fine jewelry, artwork, gifts, and clothing. About five webalogs have been sent out so far, and theyre working, Gunter says.

Watching what we call the drop dates, which is when the catalogs arrive to the customer, we see a nice upwards turn in actual sales activity on the Gallery at the Creek site, he says.

Although Gunter says Coldwater would stop short of saying we pioneered (webalogs), it certainly is something weve used more aggressively than our peers.

The ability to use webalogs to develop the Gallery at the Creek site, which debuted in November 2000, was made possible by the fact that Coldwater Creek already had a huge mailing list of 10.8 million names via its traditional catalog business, he says.

When youre working with the Internet domain thats a distinct advantage, Gunter says. The expense of attracting customers to a Web site is part of the reason many pure-play Internet sites have failed, he says.

Gallery still accounts for a very small percentage of Cold-waters overall sales, but the sitewhich sells items such as a $14,000 diamond ring and a $200 vaseis fulfilling a function thats almost as important to a retailer as sales: We feel it adds quite a bit more cachet to the (Coldwater Creek) brand, a little more luster to the high end, Gunter says.

As part of its multi-channel strategy, Coldwater Creek also has tested carrying some Gallery items in its retail stores in Chicago and Dallas. Its done very well for us, he says. Going forward, especially in very upscale locations, well probably be seeing more Gallery merchandise included as part of that mix.

Meanwhile, Coldwater Creek, which trimmed its workforce by nearly 8 percent in February in response to lagging sales, isnt expecting a financial rebound until the second half of its fiscal year, which ends next February, Gunter says.

Were expecting this economic slowdown to really stay in place through the first two quarters of this (fiscal) year and, as a result, the company is expecting softer sales compared with the year-earlier period, he says. Coldwater Creek will announce its first-quarter earnings later this month.

Certainly, were not a voice in the wildernessyou hear this industrywide, Gunter says. If the scenario is vastly different, well be as excited as anyone.

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