E-tailers try old methods for new customers

As online merchants feel the heat from Wall Street and their competitors, Web travel agency Travelocity.com has taken the unusual step of sending glossy brochures by postal mail to reassure tentative shoppers that they will be in the hands of a reputable merchant.

The company mailed a letter and brochure to an undisclosed number of visitors who had registered at its site but never completed a purchase. The letter asks: "Still afraid to buy online?" Then it proceeds to explain the security and privacy safeguards taken by Travelocity. The company also stresses that it is subsidiary of Sabre, a $2.5 billion, publicly traded brick-and-mortar travel company.

Unlike America Online's practice of blanketing mailboxes across the United States with compact discs of software, Travelocity is zeroing on a group that has already expressed interest in using its service. The next step is persuading these people to reach into their wallets and buy tickets online.

"The mailing emphasizes that we are part of a larger, solid company, which also plays into the securities issues," said Mike Stacey, acting director of marketing at Travelocity. "We wanted to get across that we are not three or four guys in a garage selling airline tickets, and that all credit card information is safely guarded."

The Travelocity mailing runs counter to the strategies of most online retailers, including Amazon.com, and Beyond.com, who reserve using real-world direct mailings to reward their best customers and to deepen brand-loyalty with free T-shirts, mugs, and trinkets.

Net retailers generally tend to use email to entice shoppers with discounts and deals, or to attract registered members who have yet to make a purchase.

Analysts said that Travelocity, among other online travel services, may be the first to turn to such direct mailings because of the higher average prices of airline tickets, requiring them to stress the security of their services. Computer games, CDs, books, and toys normally sell for much lower prices.

"Showing consumers that they exist in multiple channels helps legitimize the company," said Jupiter Communications digital commerce analyst Michael May about Travelocity's move.

PreviewTravel is also considering an offline mailing to turn registered members into buyers, the company's chief marketing officer Barrie Seidenberg said.

"I think for those people who are perhaps wary of an online company, [offline mailings] could have an impact," said Seidenberg. But she noted that with a database of 8.1 million email addresses of which only 667,000 have made purchasers, the company has to consider the high cost of a bulk mailing.

"Frankly, we consider ourselves an online company, so we are looking to do most our mailings online," said Seidenberg.

PreviewTravel does reward its top customers by sending them mousepads, luggage tags, and other items.

As competition heats up, analysts and merchants agree that converting "window shoppers" to buyers is increasingly vital.

"The top e-commerce sites are getting enough traffic, but now the really important driver is the conversion rate," said Sandeep Thakrar, an analyst at Ecom Advisors. "At the end of the day, it's all about return on investments, and increasing your look-to-buy ratio can dramatically reduce cost per customer."

Travelocity's Stacey agrees. "We wanted to increase the number of lookers to bookers," he said. Because the campaign just began last week, Stacey said he could not comment on the response.

Analysts figure that such a targeted mass-mailing campaign will become more common among online retailers as they compete to increase their sales. Such marketing campaigns could be more effective than trying to reach AOL subscribers or American Express cardholders from a purchased database.

"It's direct-marketing 101," said Thakrar. "Travelocity is targeting an audience that has already expressed interest in their product."