Looks like Red Envelope is Hitting the Wall.  What they need now is a Relationship Marketing Strategy based on understanding dis-engagement.  It’s the only way to dig out of this.

They need higher Marketing Productivity.

Check out this statement:

“We hoped that our renewed creative statement would drive an up-tick in performance in fall and holiday, but unfortunately this was not the case” – CEO John Pound

Got some old schoolers there.  That’s a “pray and spray”, offline Customer Marketing approach, not an interactive customer strategy.  They have to understand why the behavior is different.

You know, the difference between Brand and Branding.

They have the data.  But they didn’t do the analysis, because the effects of dis-enagagement were masked by new customer acquisition.  They thought everything was just fine and changing creative could “give them an uptick”.

Not.  I’m just guessing, but it seems to me this business model is a case where the Catalog – as they are implementing it – is only driving incremental business in very small segments, and is a loss overall.

In other words, a prime candidate for a Controlled Test to resolve this matter of catalog incrementality quickly by avoiding the “matchback” problem so common when one takes an old school approach to an “always on” interactive medium.

I’m not saying the catalog is a bad idea.  I’m saying it matters more than most folks understand who you send it to and when.

So, have you ever shopped with Red Envelope?  How was the experience?  Did you purchase again from them?  What’s your Net Promoter Score with respect to them? (giggle)

More details on what Hitting the Wall is all about are here.