Charlie Cole, chief digital officer at Tumi, joined the high-end luggage retailer and manufacturer in 2016 with a specific mission in mind.
“I wanted to get Tumi back to being a premium brand,” Cole says. “I sort of inherited a business that was shrinking because we were too promotional. It’s a classic cautionary tale—to get more sales we were always resorting to sending another email or having another promotion.”
The constant discounting was also causing issues with Tumi’s resellers who saw Tumi constantly dropping its prices. “(Other retailers that sell Tumi products) saw us and thought ‘Tumi.com is on sale all the time, so we have to match those prices,’” Cole says. The discounts were taking its toll on Tumi and the brand’s premium image with shoppers; direct web sales via Tumi.com fell 10.5% in 2015.
With Cole’s arrival, the retailer, No. 393 in the Internet Retailer 2016 Top 500 Guide, began rethinking its email segmentation, personalization and customer targeting strategies, as well as its site branding and performance in an effort to avoid using discounting as its only sales tool. Recent sales numbers show progress. Direct sales via Tumi.com rose 6.7% in 2016, Cole says, and direct e-commerce sales are up 30% so far this year compared with a year ago. Tumi also operates about 150 stores.
You need to differentiate your brand on something other than price,” Cole says. “Or Amazon will kill you.advertisement
In August, Tumi began using AgilOne to gather its customer data in one spot and better target shoppers based on their interactions with the brand. “Between 70-75% of our sales are direct retail sales, so we had a lot of data on shoppers, but it was in an older SQL-based CRM system that was hard to use,” Cole says.
As Tumi began exploring new customer relationship management systems it liked the single view of the customer that AgilOne offered across all shopping channels and how the system allowed Tumi to easily segment customers into groups to personalize offers based on behavior, Cole says. AgilOne integrates with email service provider SendGrid for email marketing.
“With AgilOne, we can do email segmentation in minutes,” Cole says. “Any reasonably intelligent person can do advanced data pulls. It’s not one of those systems built by database architects for database architects.”
For example, to promote its more expensive CFX carbon fiber line, Tumi recently sent a targeted email to every customer on its email list who had done at least one of the following: opened an email in the past 90 days and browsed premium collections on its site; opened an email in the past 30 days regardless of browsing history; or who had spent at least $1,000 with Tumi. Such segmenting led to a 37% open rate for that one promotional email. Sending fewer, more relevant emails has led to an average email open rate of 30%.
“An email for something like the carbon fiber collection is not going to be a mass revenue driver like a Black Friday or Cyber Monday email,” Cole says. But it will appeal to a specific group of shoppers. Segmenting helps Tumi reach the right audience that might be interested in such a collection without annoying the rest of its subscriber base, he says.
“When I first joined, I did an analysis that found that one in nine emails being sent went to shoppers’ spam folders,” Cole says. Recipients weren’t marking Tumi messages as spam, but shoppers were consistently not opening those messages, so email service providers would automatically send many Tumi messages to spam folders. “People vote with their fingers,” Cole says. “When they receive personalized, relevant emails they are much more likely to engage with them.”
With its new email approach, Tumi sent 40 million fewer emails in 2016 than a year earlier while generating more revenue from email, Cole says. The retailer also had 40 fewer promotional days in 2016 (75) than 2015 (115) and already has cut 22 more promotions from its 2017 calendar, Cole says. Meanwhile, Tumi grew its email subscriber database by over 200,000 thanks in part to collaborations and sweepstakes (not discounts) with brands like Goop, a weekly lifestyle publication from actress Gwyneth Paltrow.
All this work helped Tumi post full-price sales growth of 28.5% in 2016. “When you are sending a sale email every third day, there’s no motivation to buy full price,” Cole says. “We really worked to re-condition the customer to not expect sales all the time. We focused on quality and after-sales service to differentiate ourselves.”
Tumi also improved its marketing return on investment from $6.26 per dollar spent in 2015 to $9.26 in 2016 to about $12 so far this year. That, in part, results from sending fewer emails because of better segmenting and because of Tumi’s work to better optimize its search ads, leading to a 20% decrease in paid search spending, Cole says.
In 2016, Tumi also redesigned its e-commerce site, adding richer editorial images, more white space and softer, lighter colors. The changes helped prompt a 9% uptick in average order value in Q4 compared with the same period a year earlier.
In the near future, Tumi plans to further use AgilOne customer data to personalize the site based on what it knows about a visitor once he logs in. For example, Tumi could see that a shopper has a suitcase in for repair and might then offer her an update on the status of the product being fixed.
Tumi also is in the middle of a store marketing program using AgilOne data. Store associates are calling previous shoppers who live close to Tumi retail locations, using AgilOne data to inform their conversations and personalize those outbound calls. “On the prospecting call lists, we can see a list of people who have only bought during promotions or those who have clicked on two emails from us in the past 90 days but not purchased,” Cole says.
“You need to differentiate your brand on something other than price,” Cole says. “Or Amazon will kill you.”