RYAN BONIFACINO: The end purchasers of the product do believe in the product we sell. From a content-marketing perspective, people get really upset when they show up on our Twitter account in the morning and they don’t have an inspirational message of the day. Our digital team is split in commerce and content and the content team is very sophisticated with their strategy. You can’t quantify it, but if you were to ask me the No. 1 reason for our success, I would say it’s that. It’s made in America. It’s eco-friendly.
It’s a lot of very targeted marketing. I always ask my team, “If you were to look at what it is we’re showcasing here on a screen, on a scale of 0-100%, how important is this to our core audience?” If it’s less than 50%, we don’t really showcase it. [This differs with geography and branded events.] The Kentucky Derby does really good in Kentucky, but people in New England -- the Kentucky Derby doesn’t mean much to them. Were big sponsors of the Newport International Polo Series and America’s Cup sail, but we also want to appeal to a mom in Texas.
Many of your customers are gift-givers, not end users. How does that affect your mobile strategy?
If I were to run the math with all the first-party data at the store level, and model people based on the amount of money they’ve spent, frequency and tenure, and I would choose to reward them, I would probably end up with a lot of gift-givers. To do the math in the traditional loyalty sense doesn’t make sense at all. To offer mobile to that world doesn’t make a whole lot of sense either. Your mobile will be successful if you give some incentive for people to use it.
You might have great adoption, but you’re not going to move the needle. I want mobile to be done right. … I’d rather reward a girl who is influencing a purchasing decision, rather than a gift-giver. I need a mobile app that brings in social information, product registration, that tell us who gave you your Alex and Ani [jewelry], showcase your choices, manage your newsletter subscriptions and customer service requests. Everyone’s talking about omnichannel, but nobody’s doing it. SapientNitro put out a report called Insights and ranked brands that, essentially, rushed to failure [because they rushed on mobile]. It’s easy to go to conferences, hear the buzz, hear about mobile and [end up being] just a fragmented strategy. I want to be best of breed. I want to build once.
How are you measuring in-store and online transactions, but more importantly, augmenting cross-channel behaviors in your marketing strategy?
We use VIOPSYS for our POS (point of sale). That’s your basic CRM. When it comes to online, we’re leveraging Sailthru’s technology. The concept of big data’s been around a long time, now everyone’s talking about it. Sailthru has proprietary user management they’ve developed and it’s not your traditional CRM system, however it is open. They store all the behavioral information at the record level, so we don’t have to connect the CRM to an email or marketing-automation system. I’m able to time-stamp a purchase at the POS with a customer’s information, purchase information and have it synchronize through the Sailthru system whether it’s online to offline or back and forth. Believe it or not, time-stamping that first transaction solves a lot of the headaches in retail-to-online channel conflict. Then, we can take action on that data at the individual level.
Email is paramount to Alex and Ani. Can you go deeper on how Sailthru makes you more competitive in that sense?
They’re primarily an email marketing meets big/smart data shop. You might put them in the email-marketing bucket or in the eCRM bucket, with some behavioral-psychographic stuff going on there. They are measuring every single thing that happens on a site, and they’re powering the recommended products engine on an individual product level. Technically, they take all that data and serve one-to-one sessions based on previous purchasing behavior. One of the more impressive things to me is the ability to understand when people open their emails and on what device.
If someone’s always on their iPhone, they’ll get a mobile email. It also depends on where they are in the world. The timing thing is cool, too. You get a window of when you want to send something out and you’re looking at a timeline of when people opened emails, and when you do a campaign, it sets almost an embargo that selects “the ideal open time and revenue.” If someone opens all their emails in the morning but buys at night, [it helps you send more targeted emails]. They plug right in to our ecommerce platform, Magento, of which the service end is eBay enterprise. Pepperjam Group does our affiliate marketing and paid search.
What do you think of the blending worlds of enterprise technology and agency services?
I think regardless of where that world goes -- holding company vs. the tech platforms -- you’re taught from day one [at agencies] that it’s not your resume, it’s your portfolio. There’s always going to be a need for a creative shop. The question is: Can you bring in work flow together like Adobe’s attempting to do with Marketing Cloud to really limit creative bias and get the best work possible, where you’re not making decisions based on opinion? [A world where] you’re taking 10 different concepts, giving 10% traffic to each concept and optimizing it. That’s the whole Creative Cloud meets digital asset management meets test and target. … That’s the future of what [enterprise tech platforms like Adobe are doing] but not many retailers are doing it yet. It’s too new.
You have strong sentiments about having access to your own data.
Everyone’s got to own their own data. [You] will lose market share at an accelerated pace if [you] don’t. If there’s a sharing arrangement where data is kept private, but still benchmarked against your peers, then I think it’s fine. Traditional buying is a little bit different. A brand won’t have that clout to go out and be able to negotiate effective discounts. I don’t think you’ll ever find brands buying large media themselves. … We bought a traditional agency called Mediapeel that does our production and traditional buying. They handled our Super Bowl buy [last year], a 12-market buy that was a significant expense.
What goes into the consideration to buy a Super Bowl ad?
People watching Super Bowl ads are not shopping and we bought in the areas where we have stores and we realized, right away ... that when you’re paying that much for that many impressions, you have to ask, “Can you recoup this in the next six months with incremental lift?” Probably not. I really ramped up the bid with retargeting, people who may have pulled up Alex and Ani on their couch and I targeted them for the next 60-90 days. So we were technically able to identify first time impressions and attribute that new revenue to the Super Bowl ad.
Where are you most focused in marketing investment?
If we find areas that can scale, we do. I look at it as a portfolio and I look at performance. If I can attribute content to sales, I invest more in content. We have a very sophisticated view on attribution. Our view is we can’t have a third party tell us what content means to a touch point, but we can measure the touch points. [Our success is not based on the fact that we] invested heavily into scaling display efforts or email marketing efforts. It’s a human-interest story, as well, and our founder did this in a relatively short period of time.
How do you get funding?
Fundingwise, everything was organic. We owned the whole supply chain, so margins were tremendous and it financed the growth of the stores. The first year, we did a couple of million bucks, then $14 million the next year and then, last year, we did $80 million topline across all channels and took a round of outside capital in the third quarter of last year from [consumer private equity firm] JH Partners. It was a significant, eight-figure round for a minority stake. The main point of contact there is now our chief strategy officer. As far as 2013, we say we’re at least going to double what we did last year, so that would put us in the $160 million dollar range. I would put it closer to $200 million, but a lot of it depends on inventory. We could move a lot of product if we sold direct to consumer at a discount, but we don’t. We always sell full price, but we do have promotions. I tend to believe that the end users of the product aren’t anywhere to be found in our CRM because they’re [receiving Alex and Ani jewelry] as gifts.