Sometimes you take a look at the financial documents provided by Coldwater Creek, and you are amazed at the transformation of what was once a humble little cataloger located in Northern Idaho.
According to management, retail is now the primary growth vehicle for this business. Already boasting 255 stores in 146 markets, the retailer expects to grow to up to 500 stores within five years.
For people like me, steeped in a traditional cataloging background, the transition out of "traditional" cataloging has been fascinating to watch. The brand will spend an amazing $32,000,000 in national magazine ads in 2007, and even tested television ads in late 2006. The catalog investment is shifting as well. Instead of investing in traditional catalogs that drive sales through a telephone channel, Coldwater Creek is instead mailing more catalogs designed to drive sales to stores --- circulating the catalogs to store markets.
Coldwater Creek also boasts an e-mail list of 3.2 million names, an amazing number for a business selling just over a billion dollars of merchandise per year.
Coldwater Creek also announced a new loyalty program, targeted to the best 250,000 households --- designed to improve retention and increase spend per household.
Pay attention to SG&A --- increasing at a faster rate than sales, due in part to national branding programs, increased store employee expenses and increased catalog circulation.
As Direct Marketers, we need to keep an eye on Coldwater Creek. They are choosing a traditional path toward growth, one not altogether different than what Sears or Montgomery Wards utilized eighty years ago, or the route that Eddie Bauer took in the late 80s and early 90s. It's a fascinating and intoxicating route to riches, as the brand determines the 'saturation point' --- the point where retail stores no longer contribute significant incremental sales. To date, saturation is not a consideration ... comp store sales have increased by more than sixteen percent during the first quarter of the past two years.
When that saturation point happens (and it will happen, ask Gap), life becomes very interesting. Increased saturation drives down comp store sales at existing stores. Furthermore, online growth stagnates, as the new stores do not contribute enough new customers to fuel online increases. A brand needs to have a magical group of business leaders to recognize this inflection point a couple of years before it actually happens.
But for now, the meteoric increase in sales at Coldwater Creek is worth praising. Sales (and stock price) reflect the fact that management saw how the world was changing (stores/online), and shifted investment toward this new reality in a timely manner.
You could sell 100 units at a price of $29.99 and a cost of goods sold of $9.99, netting you $2,000 of gross margin. That's what your CF...
It is time to find a few smart individuals in the world of e-mail analytics and data mining! And honestly, what follows is a dataset that y...
Yeah, that's a lousy picture. Too bad. Today is essay day. If you don't want to read something long, stop here. I spend a...
Say you manage a paid search program. Last month you spent $100,000 and the following happened. Cost = $100,000. Clicks = 200,000. Co...