Hancock's of Paducah

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Company Overview

Hancock's of Paducah has been selling fabric for over 40 years to everyone from quilters to moms to high-end fashionistas. Innovations in the fabric business are typically made on the manufacturing side, so when a retailer sees an opportunity to streamline and increase profit – they jump at it. And that's just how Blann Hancock reacted back in the 90's with the surge of the Internet. They've had a website since 1996, but for the most part remained a catalog business up until the last five years. Until they integrated sophisticated email marketing campaigns, the catalog was the source of 60% of their revenue.

From Catalog to Email

The first challenge as they transitioned to email from the catalog was to gather actual email addresses for the contacts on their mailing list. Back in the day, they simply handed out cards at the big quilter's trade show to drive traffic to the website. They built quite a list, but over time it seemed to flatten and even drop a bit. Had they saturated the market? Did they know everyone who wanted fabric?

Over the course of 2008-2009, they launched a specific campaign to grow the email list.

Tactics included:

• Full page ad on back of catalog promoting benefits of email newsletter
• Specific call-to-action at all trade shows to collect email addresses
• Postcard to catalog mailing list
• Facebook ad
• Advertisements on blogs
• Prominent newsletter promotion on home page
• Order fulfillment inserts

Results were impressive. The list grew 14% as a result of their efforts with the biggest impact from the ad on the back of the catalog.

Email Structure

Hancock's of Paducah didn't always have a set schedule for their email marketing campaigns. After many years of reporting and experience, they have a firm structure. Currently, they send a promotional message once a week with a follow up remail to those that didn't open later in the week. Though they have tried segmentation in the past, they learned that their audience can be quite impulsive. Just because someone purchased a damask print before doesn't mean that they won't be interested in quilting fabric, so the email content varies by what fabric is available and is sent to the entire list each week.

Since they started using Bronto (the same year they tied their order management system to the website for a seamless ordering process), they have seen 300% growth in their business. In 2 years they made the same amount of revenue that used to take 4.5 years with just the catalog.

"We've had a website since 1996, so we've generated revenue online for over a decade," said Blann Hancock. "But the switch to Bronto and the order management system provided two main benefits that we didn't have before: a better user experience on the front side and a much more sophisticated back end that provided all sorts of information that helped us understand and therefore communicate with our customers better.

Impact of Email on Operations

When the catalog was the main driver of revenue and the main communication vehicle with customers,they had to purchase enough inventory to last for 4 months (the typical life of a catalog). This required more warehouse space, larger orders in advance, which resulted in a turnaround time of 90-120 days for about 80% of the product. In addition, the actual ordering process was more of an art form than a science. While they had history of orders by category, the fabric world changes so frequently, it took someone with a lot of experience to know what would be successful.

Fast forward to several years of email marketing and now inventory ordering is art plus science. Email campaigns can be used to test pre-order volume and due to its immediacy, there is no need to order 4 months worth of inventory. Hancock is able to leverage overproduction or last minute deals because he knows he can send an email out the next day to promote it. The results are a more efficient turn around: down to 60-90 days, sometimes getting to 30. This results in significant savings and enables the team to be much more efficient.

For the life of the company Hancock's of Paducah has been sending four, 160 page, 4-color catalogs each year. In 2009, after several years of email marketing, they reduced the catalog frequency to 3 per year for a savings of $250,000. "As a business with such a deep history of catalog revenue, we were only able to make this kind of decision because of the performance of our email campaigns," commented Hancock. "We have confidence that we can continue to increase revenue through three catalogs and the evolution of our growing email marketing program."

Summary

Email marketing should not be overlooked as a way to increase efficiency. By combining improvements in top line revenue with the leverage and immediacy of email to reduce inventory and turnaround time, Hancock's of Paducah has been able to be first to market with hot products and consistently see 200-300% ROI on their email marketing program each year. Before 2005, revenue by source was 60% catalog, 40% internet. With the flexibility and immediacy of email marketing and their ability to streamline operations, revenue since 2005 has been 40% catalog, 60% internet, with consistent growth in online sales.