Through trial and error, the beauty products maker finds success in leveraging online sales together with its own store and department store sales.
Origins Natural Resources, a division of Estee Lauder, sells its line of
cosmetics and beauty care products in more than 425 department stores and 125 of
its own free-standing stores, as well as online at its Origins.com site. But
hitting on that successful blend of channels wasn’t easy.
Forrester Research interviewed Origins President Lynne Greene to get an
idea of how the company settled on its current strategy. According to Greene,
the company tried several tactics -- some that worked and some that
didn’t.
For example, catalog sales never panned out for the company. Greene
attributes that to the fact that catalog sales work best when at least a third
of the products in each issue are new. Origins rolls out new products on a
slower schedule, and instead, emphasizes brand loyalty. Since the channel wasn’t
a good fit for Origin’s overall marketing strategy, it dropped it and
concentrated on more profitable avenues.
Another failed experiment was a stab at marketing via technology-based
kiosks within department stores and malls. “The kiosks gathered dust until we
took them out,” Greene said, noting that the idea of kiosks ran counter to the
expectations of Origin’s customers. They were seeking a relaxing respite from
technology and were averse to the high-tech features of the kiosk.
Another setback was when Origins looked to leverage in-store sales to
market the online store. When it asked its in-store managers to collect customer
e-mail addresses, it received very few responses. The store managers were afraid
that the online sales were going to cannibalize the in-store sales. Origins
overcame this barrier by doing research on online vs. in-store sales and
communicating the results clearly to the in-store managers.
The research showed that Origins.com customers actually spent 20% more at
the brick-and-mortar stores than customers who shopped at the physical stores
only. After communicating this information, Greene said, the in-store managers
collected 10 times more e-mail names.
Overall, the multichannel initiatives have worked. And the fact that it
has hit on this successful blend has earned Origins a spot on Forrester Research
roster of best practices in multi-channel retailing.
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