E-Commerce Strategy

Here's a common set of findings for a Multichannel Forensics project, executed for a decent-sized specialty retailer, one with stores, an e-commerce site, and catalogs.

• Catalog Buyers (telephone orders, e-commerce orders matched back to a catalog) have a 53% annual retention rate. They are in equilibrium mode with e-commerce and stores --- in fact, catalog buyers are more likely to place a next order via e-commerce or stores than in catalogs.

• E-Commerce Buyers (non-catalog sourced orders) have a 45% annual retention rate. They are in isolation mode with catalogs, but are in transfer mode with retail. In other words, the e-commerce buyer will not go back to shopping via old-school catalogs, but is very likely to leave e-commerce in the future for retail store purchases.
  

• Retail buyers have a 38% annual retention rate. They are in isolation mode with catalogs, and are in isolation mode with e-commerce. In other words, once a customer shops in a store, the customer becomes unlikely to shop via catalogs or e-commerce.

• Management is upset that customers appear to migrate to channels that have ever-decreasing customer retention rates. Lifetime value calculations bear this out. The catalog buyer has a LTV of $50. The e-commerce buyer has a LTV of $35. The retail buyer has a LTV of $25.

• Retail store comps are at -10%, while e-commerce is at +10%. Catalog comps are at -20%.
  

• 60% of all new customers are acquired in retail stores. 25% of all new customers are acquired via e-commerce. 15% of all new customers are acquired via catalog marketing.
  

• Retail buyers visit the e-commerce website an average of eighteen times per year.

• E-Mail marketing drives $0.10 per customer to e-commerce, and $0.10 per customer to retail stores.

• Catalogs drive $1.50 to the telephone, $0.50 to e-commerce, and $0.15 to retail stores, per catalog.

• E-commerce paid search orders are matched to the mailing of a catalog in half of all instances. In 1/3 of all cases where a customer visits the site via paid search, an order occurs at a retail store within three days.

• You have a "buy online --- pickup in store" option. You find that your best customers use this option, but the option does not increase long-term customer value at all.
  

Given the findings listed above, describe your marketing strategy for catalog marketing, for the e-commerce website, and for driving traffic into retail stores.

And even more important, describe your e-commerce strategy for this brand. Do you focus on e-commerce, or do you make your website a research tool for store purchases, or both? And if the answer is both, describe how you do both!

Discuss.