Electronic Retailer - August 2012 - 35

At the warehouse level, Sziklai says, an even more significant distinction arises from the different mindsets of internet vendors vs. DRTV vendors. In DRTV, marketers think in terms of “offers,” he points out. “’Offers’ can come in a lot of combinations, and you get into continuity programs and multi-pays and complexity,” he says. “In the e-commerce world, they think in terms of SKUs, not ‘offers.’ It’s more just a matter of, ‘I have this product, and I want to sell it.” Therefore, Sziklai observes, while e-commerce clients might require more sophistication on the web services end, with online tracking and so on, DRTV clients often demand far more sophistication on the order-packing end, as well as the billing end.

A Harder Dollar?
Fulfillment executives are unanimous in the perception that it is getting harder for their clients to make money in DRTV. They note that rising fuel prices are a double whammy, leaving less cash in consumers’ pockets for impulse buys and, at the same time, pushing up shipping costs. Since 2012 is an election year, and political advertising is likely to drive up media rates, the execs don’t expect things to get easier soon. The major effect that fulfillment houses see is an increased desire by DR marketers to move their products into retail stores faster. As Latz puts it, “the goal of going into retail hasn’t changed, but there is pressure to do it quicker.” “Every DR marketer’s dream is to take a product to retail, because you sell six to 10 times more at a higher profit, and you can spend less on media,” says Altman. “The DR business right now is slow. We’re fortunate that we do a lot of retail; that’s why we continue to grow.” But Sziklai warns that there is another side to the coin. To make a profitable conversion to retail, a DR marketer needs the right kind of product and the right expertise. “If you’re savvy and you know how to sell through to retail, you can be very successful,” he says. “If you don’t, it can be a death trap. We’ve seen some people lose big when they tried to go into retail and didn’t know how to negotiate.” 35

three or four days,” confirms George Fanolis, vice president of business development for Fosdick Fulfillment Corp., which has facilities in Wallingford, Conn., Reno, Nev., and Toronto. “For most clients we’re now down to a oneday turnaround. And we’re gearing up toward same-day as a standard.” Accelerating the process isn’t simple, Fanolis says, because a number of partners and vendors tend to be involved in a DR sale – call centers, media agencies, merchant processors – “and it’s tough to get everyone on the same page.” For instance, if the fulfillment center is going to ship customer orders faster, it has to receive those orders faster. “We used to get one file a day [i.e., one batch of customer orders] from each call center. Weekend orders came in on Monday morning,” Fanolis says. “Now almost all of the major call centers are sending us files at least hourly.” Orders from online customers are received in real time as a matter of course, he adds. Online vendors may have blurred the lines between different types of direct

response marketing when it comes to customers’ delivery expectations, but distinctions between various DR media are still evident in other ways, observes Tony Sziklai, president of Moulton Logistics Management, a fulfillment house with facilities in Van Nuys, Calif., and Charleston, S.C. For instance, Sziklai says, DRTV customers often are a different breed from online customers, and they are viewed differently by DRTV marketers. This applies even to DRTV buyers who increasingly go online, instead of calling an 800 number, to make the actual purchase. Many of Moulton’s DRTV clients, though not all, believe that their customers don’t necessarily expect immediate shipping. “That means we can ship to them in the most cost-effective way,” Sziklai says. This is in contrast to the hard-core internet buyer “who expects shipment immediately and wants email notifications and online tracking and so on to check on the shipment.”

August 2012 | electronicRETAILER

Electronic Retailer - August 2012

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