Eddie Bauer, Inc.

Submitted by: Bharat Rathore Roll no.12116

Background
o Eddie Bauer a $2 billion apparel retailer. o 600 stores, Catered to 75% Americans (40 miles radius) o Catalogue helped increase sales by 25% o 70% customers women, 45% were women sales. o Catalogues used in case of stock outs o Used three channels: Catalogue, Retail stores, Imedia

Problem Statement
What change should Eddie bauer implement with its channels which are not showing proper synergy?

Catalog
Effective sales of $345 million. Availability of Wide variety of products size etc Responsible for brand and new product awareness 2.5 mailing to existing customer 75 million spent on developing and sending catalogs

I media
5% of company catalog sales 3 digit increase in sales Highly dependent on catalog for promotion and content development Half sales were to new customers Majority customers were males(1250000) Higher customization and technical glitches free website required

Customer s
Educated, married, in 40s, affluent Lot of scope of around 30% of potential market increase. Time constrained customers preferred catalog than to retail Image of Bauer still as male cantered and outdoor related New generation does not know about brand past Low marketing expenditure resulted in low brand recall and top of mind awareness

Mapping
Factors customer promotion margins variety synergy Experience Retail different different medium low low different catalog same same low high high same I media same same high high high same

As we see that there is high correlation between catalog and imedia thy seem to be complementing each other and it seems if they work together they can create more value for the company

Channel conomies

Channel

Sales

Gross Margins Expenses

Operating Profit

Retail

$ 1.5 billion

$ 0.75 billion $ 585 million $ 165 million $ 148 million $ 24.5 million $ 69000 $ 57000

Catalog

$ 172.5 $ 345 million million $ 300000 $ 150000

I-media

Synergized Channel Strategy

Advantages A unified customer experience across all channels Simpler organizational structure Disadvantages: Pattern of demand differed for different channels Demographics of customers differed for different channels Synergy in terms of pricing within the retail challenge was also a constraint Recruiting became a challenge.

Conclusion
The catalog channel has 70% female customers, whereas the retail strategy is primarily focused on the male population. The advertising spend of Eddie Bauer is far less than that of its competitors The catalog channel expenditure can be used to create a stronger brand image.

Conclusion
The I-media channel can perform the function of Catalog channel in the long run, with the population of internet users set to grow in the coming years. Till then Eddie Bauer can continue to keep catalogs at all its store in order the tackle the problem of inventory & stockouts Customers who do not get the desired product at the store can order it using the catalog in the store