Click on the audio player “arrow” button to listen to The Chronicler discuss the ACCM 2008 conference held May 19-21, 2008, in Orlando, FL. I discuss the overall tenor of the show and in particular the good and bad in the move toward “automated communication”.
Today I received an email from gap.com promoting their new multi-store website. Now I don’t know how long this has been out there, but it struck me as an ingenious way to spread the cost of 4 branded websites across one platform through the use of navigation tags at the top of the home page(s). I can imagine it took some serious whacks with a management club to get the individual e-commerce guys to buy in, but buy in they did.
The deal is that if you buy from Gap – or Banana Republic – or Piperlime – or Old Navy – one some or all – you can put all items in one shopping cart, pay a flat $7 shipping charge and have a nice day. The offer is not valid in stores, only online. This week, through 5/31, there is an online code for Free Shipping as well.
Finally, all online sales can be returned free, with a postage paid label in each shipment. The online sales policy is pretty straight forward. Having run a maternity clothing company, I can assure you this is a big deal for women who have no idea what size they are and, as a new mom, are dealing with much more significant issues than negotiating a return.
As always, let’s watch the quarterly sales results to see if enough brand cross-selling results.
I sat through – with interest mind you – the ACCM 2008 Catalog Awards. It was refreshing that after every catagory seemed to be won by either L.L. Bean or Harry & David, a specialty catalog won “Catalog of the Year” – The Republic of Tea.
Where in the world is The Republic of Tea? I set out on the journey to discover this place (my wife is a tea-drinking South African, but I’ve been raised a “gulp by gulp” coffee guy from The Commonwealth of Caffeine”, so I know nothing of tea) and found a fascinating new world. This “new republic” is somewhere inside Novato, CA, a place that has sprouted more than tea in the past. The original Banana Republic began here —, hey, do we see a theme building? Yes, founded in May, 1992 by the creators of the aforementioned fruit country, The Republic of Tea was purchased by owner Ron Rubin in 1994.
According to their website and “charter” (http://www.republicoftea.com/media/2007_TRoT_Charter.pdf),
Our Mission is to become the leading purveyor of fine teas and herbs in the world: respected for our unsurpassed quality, unequaled product selection, service, creativity, and presentation. (Our covert mission is to start a Tea Revolution by infusing our culture with a new and relevant tea ceremony.)
The Ministers of Enlightenment (media) explains “In keeping with its whimsical identity as an independent republic, The Republic of Tea designates its employees as Ministers, sales representatives as Ambassadors, while customers are Citizens and sales outlets are Embassies.”
Let’s look at the catalog, uh, correction. In The Republic of Tea they spell it “catalogue”; I believe this is the ministerial spelling. One look at a single product provides the essence of the Republic’s approach to present and future tea drinking citizens of The Republic.
Herbal Tea for Children at Heart – The sweet juicy taste of elderberries, hibiscus and apple bits softened with vanilla and rose petals makes this blend a natural, healthy treat for any child at heart. The Republic of Tea will donate 75 cents of the sale of each tin to the Sunny Hills Children’s Garden (http://www.shcg.org) a school for abused and neglected children.
Other specialty teas donate a portion of sale to prostate (Man Kind) and breast cancer (Sip for the Cure), as well as the J. Garcia line which contributes to DrawBridge – www.drawbridge.org, a non-profit organization providing arts programs for homeless children.
What I like in particular about this place is that Life Style Rhythm and not Al Go Rithm is in charge. I’m gonna request this catalog, drink more tea and maybe move to the Republic before the Election camPAIN kicks in. Tea drinkers of the world unite and leaf it to the rest of them!
Well, I’m off to the annual catalog conference, this year in Orlando, FL. I’ll be reporting on the daily activities, what is hot and what is not, winnners and losers … and more. I will be speaking on the benefits of Social Media – should be a lively session. Stay tuned for news from the front.
In Part II we looked in detail at how FedEx’s fuel surcharge is constructed and adjusted. Wahoo! Now let’s take a look at the rise in shipping costs, last year to this year, for various package categories for FedEx and UPS.
An exquisite UPS & FedEx, 07-08 analysis comes from the blog, Blogging Stocks and author Kevin Schult
He priced a 20 lb. medium-sized company box shipped to a residence in Huntington Beach, California 92605, from Bayside, New York 11361, and compared it to last year’s data.
|
Delivery Service |
2007 |
2008 |
Difference |
|
UPS Next Day Early AM |
$146.91 |
$175.02 |
$28.11 (+19.1%) |
|
UPS Next Day Air |
$115.99 |
$140.82 |
$24.83 (+21.4%) |
|
UPS Next Day Air Saver |
$107.74 |
$134.40 |
$26.66 (+24.7%) |
|
UPS 2nd Day Air |
$81.48 |
$96.66 |
$15.18 (+18.3%) |
|
UPS 3rd Day Select |
$56.75 |
$67.08 |
$10.33 (+18.2%) |
|
UPS Ground |
$26.29 |
$28.19 |
$1.90 (+7.2%) |
|
|
|
|
|
|
FedEx First Overnight |
$140.40 |
$170.82 |
$30.42 (+21.6%) |
|
FedEx Priority Overnight |
$113.27 |
$140.82 |
$27.55 (+24.3%) |
|
FedEx Standard Overnight |
$102.80 |
$134.40 |
$31.60 (+30.7%) |
|
FedEx 2Day |
$68.14 |
$96.66 |
$28.52 (+41.8%) |
|
FedEx Express Saver |
$55.88 |
$67.08 |
$11.20 (+20%) |
|
FedEx Home Delivery |
$18.60 |
$24.27 |
$5.67 (+30.4%) |
It is a “no-brainer” if your shipping costs rise year to year over 30%, one of the following will happen:
a) Your margin shrinks
b) You change shippers to reduce freight costs
c) Your shipping charges to customers increase
d) You move away from “free shipping” to “reduced or flat-fee shipping” promotions
f) You wait to the last minute to print your shipping costs in the catalog – or only online.
e) You go out of business.
Let’s hear from you about how you plan to deal with this HUGE variable upon which our business is based. Oh, by the way, Land’s End has been experimenting with $3 shipping this week and stopped free shipping on May 15th. I believe they are attempting to wean their customers from free shipping.
In Part I we looked at the upward spiral in diesel fuel cost. Let’s take this a bit deeper, as the real news is in the details. In speaking with a good friend who runs 4 catalogs, he said, “I’m doing my 2008 mid-year projections. The 2 line items I cannot forecast are freight-in and freight-out. It’s a crap shoot.” The main unknown is the contracted carrier’s fuel surcharge. Of course for most catalogers and online retailers, the contracted carrier is FedEx or UPS. Some use USPS, as I did at Motherwear – we got creamed last May.
Let’s examine FedEx Ground’s fuel surcharge. It’s published and available to the public at http://www.fedex.com/us/services/fuelsurcharge.html#historical
|
FedEx Ground |
|
Surcharge |
Effective Date |
|
7.75% |
May 5, 2008–June 1, 2008 |
|
6.25% |
April 7, 2008–May 4, 2008 |
|
6.00% |
March 3, 2008–April 6, 2008 |
|
6.25% |
Feb. 4, 2008–March 2, 2008 |
The surcharge percentage for FedEx Ground services is subject to monthly adjustment based on a rounded average of the national U.S. on-highway average price for a gallon of diesel fuel. Click this link to view the updated table.
Currently the surcharge is at 7.75%. FedEx says “If the fuel surcharge rises above 8.00% or there are changes to the trigger points, the above table will be updated.” I think we should expect an updated table soon. In Part III we’ll compare UPS with FedEx and draw some conclusions about the impact on free shipping for the second half of 2008.
Reuters, May 9, 2008 “Fuel prices are killing FedEx FDX. The Memphis, Tenn., freight company cut its fourth-quarter earnings forecast, citing a 7% rise in fuel prices since it made its last projection back in March. FedEx said it now expects to make $1.45-$1.50 a share, down from the previous forecast of $1.60 to $1.80 a share.”
Truck companies are paying nearly 50 percent more for diesel than at this time a year ago. Last week the U.S. Energy Information Administration said it expects retail diesel fuel prices to average $3.94 per gallon in 2008, up from $2.88 per gallon last year. That’s a 37% increase “on average”. The current national average is $4.33, or about 10% above the projected 2008 average. If you’re a trucker, which average would you like to pay? Or have to pay?
So, what’s the impact for an industry addicted to “free shipping” on “standard ground”, which last time I looked required diesel fuel to get from the warehouse to the customer? Typical “free shipping” offered by catalogers and online retailers is limited to standard ground, home delivery service. We’ll examine that issue in Part II of “If the pie shrinks …”
Click this link if you are looking for a new positioning strategy for your catalog.
The practice of searching for a bride by post started among early settlers in the New World who, troubled by the lack of eligible women in their new settlement, would write back to their homeland in the hope of securing a wife. The phrase “mail order brides” is a gross misrepresentation of the actual process that goes into searching for brides by mail. A mail order bride is not something that is ordered through a catalog and airmailed to the paying customer.
The mail order bride misnomer originated from mail order bride agencies’ practice of printing and distributing by mail catalogs of foreign women seeking a suitable husband from the west. Based on published photos and profiles, the men would then choose which mail order brides they wished to correspond with. The mail order bride agency furnishes the interested men with the information necessary to initiate correspondence. In some cases, a mail order bride catalog went a step further by arranging the actual meeting between the man and the prospective mail order bride.
Today, the internet has changed everything, facilitating the correspondence phase to a degree not comprehended by the industry’s early pioneers. For those of you in the market for a Ukranian bride – apparently in abundant supply – visit
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