The Associated Press is reporting that shares of J. Crew Group Inc. hit an all-time low on Wednesday, after the multichannel merchant said second quarter profits were hurt by costs related to problems with an upgrade to its direct channel systems. The company also lowered its yearly outlook due to the problems with the direct platform as well as the weak retail environment.

J. Crew’s stock lost $1.13, or 4.2%, to $25.51 during afternoon trading on Wednesday, after earlier reaching a new low of $23.97. The stock is down 53% since hitting an all-time high of $57.13 in July 2007.

J. Crew said on Tuesday that revenues increased 10% in the second quarter ended August 2 for a total of $336.3 million. Store sales increased 10%, comparable store sales dropped 0.4% and direct sales rose by 12%. Direct sales had increased 19% in the second quarter of fiscal 2007.

Operating income decreased 15% for a total of $31.5 million. This includes approximately $3 million of unanticipated costs related to its direct channel systems upgrades. The direct systems upgrades impacted the company’s direct sales trend, limited its ability to leverage its multichannel platform, in addition to resulting in incremental expenses.

 “We are clearly disappointed by the impact that the transition to our new systems had on our business,” said Millard Drexler, chairman and CEO at J. Crew, said in a statement. “We view this as a short term and temporary issue in continuing to build our long term success.”

There’s a new education option this fall for those looking to gain expertise in multichannel marketing.

This fall, the DePaul University in Chicago will introduce a certificate program and graduate degree course for marketers that well-known direct marketer Ron Jacobs helped develop. The Jacobs and Stone Multichannel Marketing Communications Graduate Certificate program, dubbed MC2, was named in honor of Jacobs and Bob Stone, co-authors of the direct marketing book “Successful Direct Marketing Methods.”

The MC2 program is designed for professionals across communications disciplines, including advertising, branding, direct marketing, interactive, promotion and public relations. It teaches marketing communications from the outside-in perspective of customers and prospects, where today every customer is a multichannel customer. 

While the university has had a direct marketing program for the past 19 years, the timing was right to add new content.   

  “Today’s rapidly changing communications landscape requires that marketing communications professionals reinvent themselves in order to stay on the cutting edge,” said Jacobs in a statement.

I did something last night that I have never done before: I bought a swimsuit online.

I’d been contemplating getting a new suit for a while, but the situation became urgent when I agreed to go to the beach with my boyfriend’s extended family for Labor Day weekend. I realized that if I was going to avoid mortifying Grandma (a Catholic Sister, seriously), I might want to look into a modest one-piece suit.

I went online, thinking it would be the easiest and fastest way, and I was surprised to find, on a pretty well-known catalog site, a few trouble-spots that were really a turn-off. These details may seem minor, but when you’re working with people like me, who generally abhor Internet shopping, it really helps to keep these basics in mind:

1.) I want to buy a product, not a person. A majority of the swimwear sites I looked at featured buxom models gallivanting in the suits — which is fine. What’s not fine is that they didn’t feature in-depth shots of the suits on their own (front, back, close-up). It’s nice to see that the products are wearable, and that people seem to have an awesome time with them, but I really need to see the nitty-gritty too, like: Is it cut in a way that will fit me (not of the buxom model variety)? and Does it have weird details that are covered up by a model’s arm?

2.) I need to know my information is safe. Most sites are great at this, asking for that special code on the back of your credit card, displaying messages about security, etc. But, again, on this big catalog site, there was nothing. I simply keyed in my billing address and my credit card info, and the transaction was done before I knew what hit me. A little scary.

3.) Be as clear as possible when communicating to shoppers. I received an e-mail confirmation with an “Order Number,” and was told I could track my purchase on the site. I clicked the link, and it asked for my “Customer Number” — which is not the same as my order number, and which I can’t seem to find anywhere. This problem is almost certainly a case of user error, but, all the same, I feel like it could have been avoided if some extra steps had been taken by the vendor.

So I’m stuck, waiting on a suit that I am not able to track, that may not come on time and may not look at all like I thought, and I’m worrying that my credit card information is going to end up in the wrong hands.

To DMNews readers who shop online, I’m curious: Is this something that happens often? How can online retailers improve the experience?

Using the Internet to drive consumers into local stores has long been a goal of multichannel merchants. This week, the industry moved one step closer to realizing its goal.

Local search engine Krillion, which has been around since 2006 and until recently limited in scope by the fact that it covered relatively few product categories, has added 96 product categories to its Krillion Localization Engine. As a result, it now offers location-specific inventory information for 20,000 big-box retailers across the US, encompassing 155 product categories, 900 product brands and over 1 billion SKU’s.

I recently conducted searches for several different items – laptops, printers and oven ranges – and almost every SKU I clicked on was out-of-stock in the various stores near where I live. In some cases, the items were available online or for site-to-store delivery. The only item I could find in a store was a Hewlett-Packard Deskjet D1520 Printer, which is available at three different Wal-Mart’s near me.

The frequent out-of-stocks could be because retailers are keeping such lean inventories in these tough economic times. But with so many retailers offering site-to-store pick-up these days, and consumers looking for these types of conveniences, this looks like a viable way to drive consumers into stores.  

I’ve sometimes wondered whether digital displays can be considered direct marketing. Sure, they can be placed in specially-selected areas in stores that attract a certain type of customer, but once they’re in place, they’re pretty much stuck. Any old Frank McUnTargeted lost in a gigantic big box store could easily run into them, just as the perfect customer could turn one aisle too soon and miss out.
TruMedia may be on its way to solving the problem: the company has developed technology that allows digital signs to recognize individual people. Older versions could tell the difference between an adult and a child, and also had the power to determine gender and ethnicity. Now, the eerily insightful machines can decide if you’re a senior citizen, too.
Once the TruMedia sign has your target demographic filed into its little machine brain, it can serve up ads designed specifically for people like you.
Of course, I imagine the technology isn’t perfect. After all, not every pre-teen girl will thrill at seeing an ad for Hannah Montana shampoo — and imagine the backlash if it targets a 35-year-old mom with ads designed for a 72 year old.
When you compare it to that static signage of yore, though, this technology is a great step towards “direct-ifying” in-store ads.

Doubleclick Performics recently debuted a new research report zeroing in on the online shopping and search habits of the tween set — kids ages 10 to 14.

Not so surprising: The most popular categories for purchase or recommendation by tweens are electronics, apparel, consumer packaged goods and telecommunication products.

A bit more surprising: Tweens are actually savvy shoppers, using search to compare prices, read product information and find sales and discounts. Who knew?

Tweens are also apparently still mall rats — while many think tweens do everything online, most still make their purchases offline, in the store. So it’s essential for retailers to include their bricks-and-mortar addresses in search results.

Despite the fact that they’ve been around for what seems like forever in the world of Internet marketing, online classifieds are having a moment, as DMNews reports in this week’s news analysis.

However, the quick syndication of content enabled by Web 2.0 that’s driving many of the new deals in this space has the potential to also produce some conflicts of interest. This could become more apparent as the number of deals proliferate, lessening the control some publishers have over where their ads wind up.

For example, last week the Arkansas Democrat-Gazette reported that Wal-Mart Stores has removed links between the paper and the retailer’s classified advertising listings on its Web site. The newspaper’s management decided the unique content of the paper’s classified advertisements would be compromised by allowing Wal-Mart to use it.

Wal-Mart’s classifieds listings is powered by Oodle.com, which the article says uses a standard programming protocol to seek permission rights for searches and indexing of classified advertisements.

-Chantal Todé

While the US consumer watches gas prices rise, there may be a positive spin for the cataloger and other direct marketers who save consumers a shopping trip. Bloomberg reports that petroleum gasoline futures are at  $3.40 per gallon today and I’ve seen several reports that gas averages $4 a gallon at the pump.

Here’s some math: The average American commuter driving a sedan at 20 miles per gallon would use 1.36 gallons per 1-hour round trip to the mall.  At $4.00 per gallon, that’s a $5.44 savings. If you’re company’s shipping fees are lower than that, you’ve got some feel good savings to pass on to the customer.

But before you start rewriting all of your promotional copy, consider the true nature of costs and benefits. The carbon offsets and increased prices for delivery of products to individual homes will still have an environmental impact. In addition, according to a recent study by Connected Nation, it takes 50 orders that save the consumer an hour of driving, to make 1 cent of carbon offsets for each individual. Thanks to multiplication, this can eventually total to dollars of change.

The retail industry’s woes are getting hard not to notice. DMNews reported on Monday about the financial industry’s growing lack of confidence in catalog and multichannel retail operations, forcing some, like BlueSky Brands, to close while others, such as Red Envelope, recently warned that they may have to cease operations. Yesterday, the New York Times had its own report about the growing wave of bankruptcies among retailers, pointing out that while the trend may have started with smaller retail companies like Sharper Image, which recently filed for Chap. 11 bankruptcy protection, it is quickly spreading to larger, national chains such as Linens & Things. Like our story, the NYT report also points to the banks’ contributing role in these bankruptcy filings.
In the Linens & Things example, however, the financiers appears to be willing to work with the retail chain for now. Linens & Things said yesterday that it has delayed a $16.1 million interest payment while it discusses a capital restructuring with creditors that could help it avoid bankruptcy. The retail chain also said its lenders have agreed to delay exercising their right to stop making loans to the company. Linens & Things has blamed the combined effects of the credit crunch, the housing downturn and the slowdown in consumer spending for its financial woes.
What do you think will determine which multichannel merchants will survive this current environment and which ones won’t?

The retail industry’s woes are getting hard not to notice. DMNews reported on Monday about the financial industry’s growing lack of confidence in catalog and multichannel retail operations, forcing some, like BlueSky Brands, to close while others, such as Red Envelope, recently warned that they may have to cease operations. Today, the New York Times had its own report about the growing wave of bankruptcies among retailers, pointing out that while the trend may have started with smaller retail companies like Sharper Image, which recently filed for Chap. 11 bankruptcy protection, it is quickly spreading to larger, national chains such as Linens & Things. Like our story, the NYT report also points to the banks’ contributing role in these bankruptcy filings. In the Linens & Things example, however, the financiers appears to be willing to work with the retail chain for now. Linens & Things said today that it has delayed a $16.1 million interest payment while it discusses a capital restructuring with creditors that could help it avoid bankruptcy. The retail chain also said its lenders have agreed to delay exercising their right to stop making loans to the company. Linens & Things has blamed the combined effects of the credit crunch, the housing downturn and the slowdown in consumer spending for its financial woes.

What do you think will determine which multichannel merchants will survive this current environment and which ones won’t?