Mail order madness.
Telemarketing, Direct Mail, Television retailing and the Internet are changing the way Americans shop. Consumers have become more sophiscated, learning to think cost-effectively and are always on the look-out for new merchandise.
According to a 1995 survey conducted by the Direct Marketing Association (DMA), direct mail is the medium of choice among businesses, targeting the $350 billion African American market. Seventy-nine percent of respondents use directs mail when targeting ethnic markets. They also use print advertising (67%), radio (38%) and catalogs (33%) to reach black consumers.
In 1995, direct mail and telephone marketing accounted for 64.8% of all consumer direct marketing sales, or $741.7 billion. DNA also estimates total catalog sales at $62.6 billion, with $38.6 billion in sales to consumers and $24 billion in sales to businesses. In 1994, almost half of the 30 million African American population ordered merchandise from catalogs, while 14% ordered from televised home shopping programs, according to DMA spokesperson Christina Duffney.
But mail order shopping is not for everyone. Robyn Fernandes sternly warns that would-be consumers "read the fine print." In 1992, she purchased two decorative tins of magnetic alphabets and animals through a special promotional coupon-value pack. Both products were recommended for toddlers. "I should have used a ruler or a tape measure to double-check the dimensions. The pieces were extremely small and I felt uncomfordable giving either set to my two-year-old niece," she says.
Fernandes, a property manager, packed away the gifts tins and forgot about them until moving recently. The Boston resident gave her now four-year-old niece the animals, which were slightly larger, but repackaged the alphabets. "My niece will probably be in elementary school before I give them to her. Since I paid less than $18, 1 didn't bother to ask for a refund," she says.
Although slightly disenchanted, Fernandes decided to try direct mail shopping again. Last Christmas she ordered personalized mugs for her mother and sister from a coupon insert in a Sunday newspaper. "When my sister told me that her name came off after only a few months, I decided that shopping by mail is not for me."
While catalog shopping may not be for Fernandes, December `tis the season for many of us to order by mail. Many holiday gift catalogs arrive in October or earlier, when people are in a buying mood. Along with computerized ordering and overnight delivery, last-minute shopping with the help of catalogs has become a breeze.
The DMA reports that catalog sales to consumers climbed 5.5% annually between 1990 and 1995, reaching $38.6 billion. In 1995, consumer catalog sales accounted for 6.7% of all direct retail marketing sales, and almost 62% of all catalog sales.
A recent cross-ethnic survey by Market Segment Research testifies to the growth of the mail order market among African Americans. It identified several catalogs now targeted to the African American market, including Fashion Influences by JC Penney, E Style from Spiegel, Essence By Mail by Hanover House and the BET Shop, a joint venture between BET and the Home Shopping Network (HSN).
"I just don't have time to shop and catalogs are the most efficient way to get it done," says Kathleen Anderson, a technical writer from Detroit. "I started shopping by catalog four years ago, and I always find a wide selection of high-quality products."
For Anderson, catalog shopping has eliminated repeated trips to the local post office and standing in long lines. She also finds direct mail more cost-effective for shipping and handling since more than half of her gifts are for out-of-towners.
Anderson says she gets at least 30 catalogs a month, but only keeps a select few devoted to kitchen decorating, gardening, bedding and linen. Her favorites include Gumps, J. Peterman Co., The Pottery Barn, Hold Everything and Ballard Designs. "Once you make a purchase, you'll constantly receive new catalogs featuring updated merchandise," she says.
Although catalog shopping often costs more and rarely do the catalogs offer sales or discounts, Anderson continues to avoid department stores. "Catalog shopping is something new and fun to do. I never have problems using credit cards or returning merchandise. Besides, I feel like I am not spending as much money as I normally would in stores."
Mail order shoppers should know their rights and responsibilities as consumers under Federal Trade Commission and U.S. Postal laws, says Carole Glade, executive director of the National Coalition for Consumer Education in Madison, N.J. She urges consumers to "check out" mail order companies through their local or state consumer protection offices before placing an order.
"Don't give out your Social Security or bank account numbers or income information to fast-talking callers trying to make a quick sale. And only give your credit card number when you're placing an order with a legitimate company," advises Glade.
When consumers innocently participate in informal surveys, the data is broken down into dozens of categories such as income, gender, race, frequency of mail order shopping, religion, credit card use, education and marital status. Mail list brokers then sell this information to marketers. Glade points out that DNA's Mail Preference Service eliminates the problem by removing a consumer's name from undesired lists.
Mail order shopping may be cost-effective, but Glade warns that shipping and handling charges, as well as paying postage to return merchandise the total price of the item-and avoid any savings.
But for many small businesses, marketing products via direct sales is key reducing overhead costs for themselves and customers. Annette Washington, owner of Exclusive Expressions, looks to catalogs as a way to save money. "When I save, I can pass the savings along to my customers. The ultimate goal is to make sure that my customers are very satisfied," she says.
Exclusive Expressions, Washington's West Hills-Calif. ft basket company, is known for its one-of-a-kind customized creations, which range in price from $35 to $1,000. Popular with entertainment industry executives and stars, Washington made a 5-foot-tall, 50-lb. basket last Christmas for Tommy Mottola and his wife, Mariah Carey. She shipped the basket in two inverted wardrobe boxes via Federal Express.
Besides selling her wares via catalog, Washington became a wholesale catalog shopper two years ago, buying mainly gourmet food products, wicker baskets, dried and silk flowers, bath products and cellophane and netting. She pays C.O.D. when ordering, and spent $4,000 on supplies in 1995. But she estimates her savings ranged from 35% to 50% with catalog shopping.
"I used to buy chocolate-covered pretzels from Nordstrom retailing for $10. Now I pay $4.50 shopping with the Corporate Gifts International Wholesale Buying Guide. I also bought a 8-inch-by-5-inch 5-Radio Flyer miniature Christmas wagon for $6 from the catalog, compared with Nordstrom's $17 retail price tag," she adds.
Washington experienced problems only once when shopping via direct mail, and that was when her Valentine's Day orders didn't arrive when scheduled. She called the company to complain and her supplies were sent overnight; her baskets and dekiveries arrived in time for sweetheart's day, although she did sweat a bit.
TELEVISION TURNS DEPARTMENT
Getting packages promptly is important to QVC (Quality, Value and Convenience) television shopper Peggy Moore of Tucson, Ariz. "If I mail a check within 24 hours of placing an order, the merchandise usually arrives within days," says Moore, a retired school administrator.
Die-hard retail TV shoppers have made QVC a $1.6 billion business. DMA reports that television is the fastest-growing medium for direct consumer marketing sales. Television sales in 1995 were estimated at $43.8 billion. By the end of the decade, television retailing is forecast to be almost 10% of annual consumer sales, translating into $70 billion market.
Moore says she began shopping via television four years ago. While flipping through cable stations late one night, she came across the Home Shopping Network (HSN), then called the Home Shopping Club. She ordered a piece of Native American pottery and a silver-tone watch as gifts for friends.
But convenience does not guarantee happiness. "I was not satisfied with the quality of either product," says Moore of her HSN purchases. "Most of all, I didn't like the carnival atmosphere or being pressured by a ticking clock to make a quick purchase within three minutes."
The products offered by TV marketers, like those in mail order catalogs and in department stores, vary in quality and price. Moore's preference is QVC, which she rates high for the quality of its products, its well-stocked items and upgraded merchandise. Moore also likes QVC's telegram-like confirmation notices sent ahead of the product. Returning merchandise is easy, she says, since all QVC purchases come with a return mailing label. The refund slips are enclosed in each shipment and indicate several repayment options-check, company credit and credit card adjustment.
Moore was laced on a waiting list for a product only once when the merchandise was sold out. Despite her apprehensions, Moore gave out her credit card number to guarantee a purchase. "I didn't have a choice. But it was the first and last time I used my credit card. I've heard too many horror stories about telemarketing fraud involving credit cards, and I don't intend to become a victim," she cautions.
SELLING VIA THE INTERNET
First came door-to-door sales, then the mail box, followed by telephone and television marketing. Now the computer is fast becoming the preferred sales method for the next millennium. It allows browsers to shop at their leisure and, perhaps, make purchases they wouldn't otherwise make.
This environment has proved ripe for start-up entrepreneurs, such as Michelle Phillinganes, who are trying to establish a client base. Phillinganes started her Los Angeles-based company, Paris Lingerie, which specializes in affordable, imported lingerie, early last year. Her home-based business initially subsisted through word-of-mouth and lingerie parties for friends. But four months ago, Phillinganes joined the information age: She had an electronic catalog designed and established a Web site on the Internet to peddle her products. Phillinganes now pays $120 a month to advertise on the Internet.
Subscribers to America On Line and Netscape can type in her Web site address (http://parislingerie.com) and browse through the catalog. "There are, 14 million subscribers signed on to Internet services," she says. "I felt that if the catalog was correctly and tastefully done, I would attract clients."
Using a special Web page counter for businesses, Phillinganes can monitor all log-on inquiries, which average 1,500 a day. She gets five to six orders daily, ranging from $200 to $400-and inquiries are on the rise. Internet customers receive their orders within three weeks, and so far no merchandise has been returned. To avoid credit card fraud, Phillinganes uses secure order forms that automatically send customers' Visa and Master Card account numbers to her mail box.
"Commercial online services, such as AOL, Prodigy and Compuserve, can offer secure transactions because they are partially closed systems," explains Bob Smith, executive director of the Interactive Services Association, a 350-member electronic association based in Silver Spring, Md. These companies have a limited number of people who can gain access to customer accounts.
"But the Web site is "a public system that anyone can access because there is no central control," cautions Smith. He compares the Internet to a community shopping mall, where each store is responsible for fulfilling their own business transactions. "When problems arise, customers can go directly to management," he says, "but once you leave the mall and go across the street to Bob's Shoe store, you're on your own.
The Internet is rapidly becoming a popular avenue for businesses to vend their wares but it will never replace stores and catalogs, says Judy Tashbrook, spokesperson for America On Line. "It will provide consumers with a good alternative," she says.
In the 1950s, door-to-door selling was a way of life in every neighborhood. But direct marketing techniques have come a long way since then. Mail order shopping, whether by post box, telephone, television or computer, is here to stay.
DO'S AND DON'TS OF MAIL ORDER SHOPPING
Mail order shopping con be fun and save time. But you must be a smart consumer and do your homework before placing an order,
First, check out the company by contacting local consumer protection agencies, such as the Better Business Bureau or the attorney general's or consumer affairs office in your city or state.
Make sure you understand your rights as a consumer. For example, if you are not satisfied, can the merchandise be returned for a full refund? Is the product covered by a warranty?
Here are a few other precautions to take:
* Photographs can he deceiving. Actual products can look slightly different in color, fabric, style and size. When ordering by telephone, ask the sales representative specific questions about the merchandise.
* Shop by catalogs that charge a single low shipping price or put a ceiling on shipping and handling charges. Most catalogs charge on o sliding scale based on the number or size of the items ordered.
* Buy as much as you con from one source. The larger your order, the bigger your savings.
* Order several weeks in advance, especially during the holiday season, to make sure that your merchandise or gift arrives on time. Be prepared to spend an extra $6 to $21 for packages shipped overnight.
* Avoid the "open a new credit card account and get a discount' trap. Many stores typically charge an 18'0 to 21"o interest rate on unpaid balances.
* Also avoid the "buy now, pay three months later, no interest charged" trap. If the bill is not paid within the time allotted, some stores will charge interest based upon the day of purchase.
* Never give your credit cord or checking account number to anyone who calls on the telephone or sends you o postcard.
* Don't send cash by overnight moil or messenger. You may lose your right to dispute fraudulent charges if you use cash.
* Resist high-pressure soles tactics. Discuss potential offers with family members, friends or your financial advisor.
* If on offer sounds too good to be true, it probably is. Report suspicious orders or unsatisfactory transactions involving the mail to the Postal Crime Hotline 800- 654-8896. Or call the National Consumer League's Fraud Information Hotline at 800-876-7060 for more information.
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|Title Annotation:||tips on how to evaluate the offerings in the e-mail and the post box; includes a related article with shopper dos and don'ts|
|Author:||Wilkinson, Deborrah M.|
|Date:||Jul 1, 1996|
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