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Marketing Report for Mr. Gary C. Comer, Chairman
Dear Mr. Comer,
As instructed, our firm has conducted the requested marketing research and provided recommendations so that Land's End will continue to remain a leader in the mail order catalog industry. Due to the current market saturation conditions, in order to keep it's market position; Land's end will have to expand its prospective market to reach the global community. It will also have to reach a broader range of income levels.
Key trends, which have influenced the mail order industry
The 1950s to the 1980s were an age of materialism. The 1980s began a new order of social thinking. People began to be more concerned about the quality of life and the quality of their home lives. The term "quality time" became a buzzword. The invent of the Internet had its beginning in 1982 [PBS.org, 1997]. Slowly over the next 10 years it grew in popularity. Today, the Internet is an integral part of our society. It is this shift in thinking that is responsible for the success that mail order and e-commerce have had in the recent decade.
According to statistics from the Direct Marketing Association released June 4, 2001, catalog sales continue to increase at a rate more than twice that of overall retail growth. Catalog sales for 2001 were expected to reach 120 billion U.S. dollars. That is an 8.9% increase over 2000 sales. By comparison, overall retail sales were only expected to grow 3.1% [DMA, 2001].
Traditionally mail order catalogs and other forms of direct marketing have performed well even in times of economic uncertainty. This is due to their efficiency and lack of overhead [DMA, 2001].
Expectations of Future Trends
Catalog sales are expected increase to 128 billion in 2002 and 160 billion by 2006. This is according to the same DMA study. Even though Internet sales are slowing from their triple-digit growth rate, they are still the fastest growing direct marketing medium. Web sales for 2001 were expected to reach 37 billion and, an increase over 2000 sales of 28 billion. Internet sales are expected to slow in growth, and are expected to reach 61 billion in 2002 and 181 billion by 2006 [DMA, 2001].
Structure of the Mail Order Industry Today
The Direct Marketing Association also reports that the Internet accounts for 13% of all catalog sales. Currently 53% of catalogers describe themselves as catalog/Internet/retail, 42% as Catalog/Internet, and only two percent as "catalog only. In these companies, 13% of sales were attributed to the Web, 62% of sales were driven by the print catalog and eight percent were generated by retail or outlet stores. This study is conducted annually by the Direct Marketing Association in cooperation with W.A. Dean & Associates [DMA, 2001].
Who is Land's End?
Lands' End is a leading direct merchant of traditionally styled, casual clothing for men, women and children, as well as soft luggage and products for the home. The company's products are offered through regular mailings of its primary and specialty catalogs and via the Internet. Lands' End sales for fiscal year '00 were $1.320 billion. Sales for landsend.com doubled from $61 million to $138 million during this time frame. Catalog Age ranked Lands' End as the 15th largest mail order company and second for apparel only. Over 236 million copies were distributed during fiscal year '00 [www.landsend.com, 2001]
Who are Land's End's Competitors?
The Spiegel Group is made of Eddie Bauer, Newport News and Spiegel. It is positioned to reach customers at different market levels. Service. They serve their customers through catalogs, e-commerce and more than 560 specialty retail and outlet stores.
Eddie Bauer, a leading tri-channel specialty retailer offering men and women distinctive clothing, accessories and home furnishings for today's active, casual lifestyle. Through joint ventures and licensing agreements, Eddie Bauer also markets its sportswear in Germany, Japan and the United Kingdom. [www.eddiebauer.com, 2002]
Newport News, a leading direct marketer offering moderately priced women's fashions and home decor through catalogs and online. Although the company specializes in swimwear and jeans, all women's apparel categories, including footwear, are well represented. [www.newport-news.com, 2002]
Spiegel is one of the nation's leading direct marketers, offering the benefits of home-based shopping via…[continue]
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