Monday, 12 October 2009

Which is the tail and which is the dog?

In the years since ecommerce arrived on the direct marketing scene like an unexpected and not-all-that-wanted younger sibling, cataloguers have viewed it as an auxiliary channel. The print catalogue was the core business, and any sales generated via the website were considered ancillary.

That may have been the correct attitude a decade ago, but not anymore, says Bill LaPierre, senior vice president of list and marketing firm Direct Media/Millard. Direct marketers have to realise that now the web is the core business, he explained last week during his ECMOD session “Crucial Techniques for Your Survival That Successful Catalogues Don’t Want You to Know”. The catalogue’s primary purpose is to drive business to the web, LaPierre says; any sales that result directly from it are ancillary.

Of course, this is counterintuitive to most multichannel marketers. As a result, LaPierre contends, they’re not leveraging the unique benefits of the internet to their fullest potential and are wasting money on less-than-effective catalogue mailings. “The successful cataloguers we work with focus on having a website that’s better than their catalogue,” he said. “The successful cataloguers understand that the web is the cheapest way to acquire a customer.”

Which is not to say LaPierre thinks catalogues should go the way of the Betamax and the eight-track player. But they do need to be reevaluated as website traffic drivers first and as standalone sales vehicles second. “Instead of mailing a 150-page catalogue,” he suggested, “you might mail three 50-page catalogues that are better targeted.”

LaPierre cited US womenswear merchant Chadwick’s as an example of a print catalogue that has evolved into a web traffic driver. Product copy is virtually nonexistent; the images sell the apparel, and the callouts of specific web features—customer reviews, the ability to view the looks on models, the search and sort options—sell the website.

Another US cataloguer/retailer, outdoor gear seller Cabela’s, produces similar versions of its catalogues: spread after spread of products, with copy limited to the product name, the SKU number, and the price. Want to learn more? Visit the website—and while you’re there, you can see Cabela’s entire, exhaustive product line, read customer reviews, watch product videos, and more.

Cabela’s hasn’t killed off its traditional-format catalogue; it still mails its “big book”, complete with detailed product copy, to some of its stalwart customers. But by analysing and segmenting its customer file it has determined which customers are just as likely to order from the smaller traffic driver as from the more costly traditional catalogue and sends them the cheaper-to-produce version, enabling Cabela’s to cut costs without cutting response or sales.

For this strategy to work, your website needs to be top-of-the-line. It should offer alternative search and sort options (for instance, search by size, by colour, by material; sort by price, by popularity, by newness), extensive product specs, customer reviews, effective cross-selling, multiple imagery—in short, the elements that distinguish the web as a marketing and sales channel.

One last caveat, which you no doubt know but which we feel compelled to say anyway: Don’t forge ahead with any huge changes without testing them first.--SC


  1. the question is, at least for those that are a pure ecommerce offering, should we bother producing a catalogue to back up the website so the consumer can have something tangiable in hand? Chris -

  2. I would certainly be testing a catalogue as part of my marketing mix. The mailing landscape is changing so quickly you can only try things out and see what happens.

    I would test a catalogue as a means to increase spend from existing customers. Do this by selecting four groups of customers:
    Group 1 - no communication at all for a two month period. The hold out group.
    Group 2 - email only for a two month period
    Group 3 - Catalogue only in the two month period.
    Group 4 - catalogue and email combined

    At the end do the maths - see which is the most profitable strategy. It is simply a case of finding out which of the four groups delivered the most profit.

  3. Chris,

    My view would be yes, give it a try, as long as you have the analytical capability to match back the online sales to the mailing file I would also try different types of promotional offer to make sure you optimise response.



  4. I have worked in an advisory capacity for many catalogue and bricks and mortar retailers and (with have a successful online business that used to be a catalogue business and has gone from strength to strength since we stopped producing catalogues. Also, with we experimented with catalogues a few years back and concluded they were a bad idea.

    My distilled view, for what its worth, is that there are very few successful online businesses that would benefit from developing a catalogue. Why? Some of the reasons would include; the difference in the fundamental economics between offline and online trading (ie. the required margin structure and therfore appropriate pricing strategy), the potential conflict between online and offline pricing, the different buying and merchandising cycles required (print deadlines and mailing dates can come to dominate the rhythm of the business at the expense of the 'continuous' processes required to optimise the web); the problem of dependency on Royal Mail and their pricing policies; the 'big picture' issue that posting millions of catalogues is simply 'system inefficient' ... I could go on.

    Of course if you have an already established retail brand with customers who value your 'range editting' on their behalf then catalogues may continue to play an important role ... but personally I believe (and have for a while) that print catalogues are the past and online is the future (and many of those arguing the value of print are those with vested interests in keeping that 'channel' alive).

  5. I think that you have to consider that a catalogue actively goes out and gets business. With an ecommerce website the individual needs to take action to find the website. Hence with pure ecommerce offerings email and advertising even direct mail have to become part of the media mix, as well as catalogues. You want to reach your customers and a wider audience. What is more effective in driving traffic and sales. I think that multi-channel (horrible term) has to be the way forward for most growing businesses.

    Also - focusing on a "website that is better than their catalogue" can't be right. The catalogue and the website should work hand in hand, reflecting the brand and the brand values.

    Ian -

  6. We see legacy catalog marketers playing "catch up" and improving the SEO and shopping functionality of their sites. While the catalog will not go away, they are learning the customer acquisition and selling power of their sites. No longer are they just order taking channels. Our newest UK client, a good example of this.

    On the flip side, we are seeing "pure play" ecommerce folks beginning to embrace the concept of LTV (lifetime value) and realizing that mail may have a role in the on-going communications mix. Mail interupts and sends the online shopper back to his/her PC to browse/shop/order. It works differently than SEM, PPC, email and the other traditional "pure play" online marketing tactics. In another few years, I believe, the "pure play" guys and the legacy DM guys will meet in the middle! Terry Jukes,

  7. Its no surprise that the catalogue business is not doing well anymore. I would say something like facebook is an ideal example of something they could use.

  8. I've developed my argumentation on this topic a little further ... see my blog post below