Why You’re Still Getting So Many Catalogs
Commentary by Bob Houk, Executive
Director, Trade Promotion Management Associates
It’s the Digital Age,
right? Nobody wants anything to do with print media, right? Catalogs are
environmentally destructive, right?
You might agree with
some or all of those assertions, but the folks in the catalog business
will say that they keep mailing because catalogs work. According to a recent
article in The Wall Street Journal,
17 billion catalogs were mailed last year in the U.S. Among retailers who
rely mainly on direct sales, 62 percent claimed their biggest revenue generator
is a paper catalog, according to the latest survey by the Direct Marketing
Association. Only a fifth said they draw their biggest sales from their
web sites.
And the belief is that
even many of the web sales were driven by catalogs:
The article in the Journal stated, “The
post office recently hired a consultant to conduct a study that concluded
that consumers who received catalogs from a retailer spent 28 percent more
on that retailer’s web site than those who didn’t get a catalog. ‘The more
often you mail,’ the study said, ‘the more sales you could see.’”
But
the numbers are falling at rates that have to have the direct marketers
considering changes to their business plans. According to the DMA surveys,
the percentage of catalogs that generate a sale declined from over eight
percent in 2003 to just under two percent in 2007. And while the catalogs
generated 46 percent of direct marketers’ sales in 2008, compared to 36
percent online, the catalog number was down five percent from the previous
year, while the online number was up five percent.
And of course, the USPS
survey should be considered in light of the fact that they are far from
neutral on the subject. With the amount of on-line billing and payment,
and the almost complete disappearance of personal letters, the delivery
of advertising is becoming a bigger and bigger portion of their business.
A
big threat to both direct marketers and the USPS is the idea of a "Do
Not Mail" list:
A San Francisco environmental
group called Forest Ethics is circulating an online petition calling on
government to set up a “Do Not Mail” list that commercial mailers would
have to honor, modeled after the National Do Not Call Registry that allows
consumers to block telemarketers’ phone calls. By signing up, consumers
would block unwanted junk mail, including catalogs. The group says it has
gathered about 100,000 signatures.
I’m not sure as many
people would sign up for Do Not Mail as have signed up for Do Not Call,
an unwanted catalog in your mailbox is less intrusive and offensive than
a phone call from a telemarketer who refuses to hang up no matter how
many times you say, "Sorry, not interested."
But any substantial
drop in mailings would force the direct marketers to speed up the transition
to online marketing, and could be disastrous for the USPS.
Discussion
Questions: Is there still a place for catalogs in a green-sensitive
world? How do catalogs still complement or support e-commerce or
brick & mortar businesses? Are we witnessing any meaningful
public backlash against catalog distribution?
Catalogs are a lot like greeting cards to a lot of people. To such people, catalogs, like greeting cards, project that you are important; that someone is thinking of you. Thus, one might expect some innovations in future catalogs just as greeting cards have evolved into musical instruments.
While you may wish to save the earth and disapprove of the paper clutter and lost trees, you may still like being “included” in life’s ongoing, albeit changing game. So, for human reasons, there could still be a place for catalogs in the green-sensitive world…even as you increasingly go to the web for personal inclusion with the fast-evolving purchasing process. And if this scenario has any merit, it might reduce any backlash against catalogs.
It’d be nice if you could opt out of catalogs easily, as you can with e-mail. I swear I’ve been getting catalogs for years telling me this is my “last catalog” unless I buy something “this time.” Catalogers could also do a better job cleaning their lists. We have an apartment we rent out over the garage, and consistently get catalogs for people who have moved out years ago.
My wife uses her last name and I use mine, so of course we both get all the same catalogs. That’s pretty common now, and I don’t think anybody is doing anything about it. Actually, it’s a little fun to see how the offers and items vary for each of us.
But in my heart of hearts, I have to say I wouldn’t change things a whole lot. 80% of all catalogs hit the trash, but 20% get some use, and most orders for gifts in our house are spurred by a catalog, which sends us to a website to order.
Because they still work. Yes, the world is moving in an electronic direction, but paper media (not just catalogs) coming into the mailbox are still an effective way to get products in front of people who wouldn’t have thought to buy them otherwise. And many people like looking through catalogs.
Perhaps someday there will be an electronic medium that has the same effect (ideas: catalogs to your Kindle, integration into your Facebook or iGoogle page, LinkedIn for catalogs?) But right now, I don’t see banners or search fulfilling that role.
Of course catalogs increase sales. That said, the missing opportunity for retailers is more effectively promoting and selling where and when shoppers make their buying decisions.
I love getting catalogs. I like to look through them in quiet moments–and like Warren, my husband and I use them to leave hints for each other at holiday time (Yay Post-it flags! Or sometimes just a dog-eared page and a Sharpie.)
A couple of years ago, I pointed out something in the Lands’ End holiday catalog the day it dropped–and an hour later, my husband informed me it was already sold out! So don’t tell me catalogs don’t work.
The number of catalogs that generate a sale has declined from 7% to 2%? In a huge recession? With abominable list cleaning, because you know someone got the bright idea to cut costs on data processing (Let’s face it. Dick and I–and the Thayers–could still play Holiday Hints in ONE copy of a catalog each, immediately *doubling* ROI for our two households alone.)
Further, as I implied, it’s a mistake to look at response rates–especially from one drop. You’ve gotta look at ROI–sales volume and gross profit–over a series of touches that constitute a promotion. And I would support such a promotion with email as well.
Catalogs are an extension of the gospel of printed newsletters–a primary teaching of the Glazer-Kennedy Insiders’ Circle, an organization that teaches very hard-core (i.e., cost-effective) direct marketing to entrepreneurs, and most of that marketing is online. But the printed newsletter, and a good proportion of printed direct mail, will always stay in that mix, because they work.
If 62% of those companies surveyed claimed that they generated the majority of their revenue through their paper catalogs, should we really expect to see them stop mailing? Further, it’s only reasonable to assume that the catalogs are causing consumers to be aware of and purchase products online that they would otherwise never have even considered.
Successful direct marketers have always worked from a very clear accounting and return on investment model. As long as their catalog continues to generate some profit it will likely continue to be mailed. If some merchants disappear from the mail stream, it will mean less mailbox clutter and likely greater awareness and sales for those who remain in the game.
The question of a national “Do Not Mail’ list similar to the Do Not Call Registry is an interesting one. But just as the Do Not Call Registry permits companies to phone their existing customers, any Do Not Mail list surely would also permit merchants to mail their catalogs to individuals who have purchased from them in the past. Thereby such legislation might make the existing catalogers more profitable. Consumers with no inclination to view ANY catalog would voice their position and help catalogers clean up their lists, while at the same time there would be less competition for sales and reader attention because it would be virtually impossible for a new cataloger (with no existing customers) to enter the marketplace.
I agree they still work for some people. I know I love receiving my NFL (Denver Broncos focused) catalog and I buy from it a good deal.
Although, I am not sure why I get Lands’ End, Mother Maternity (my wife is not pregnant and we have never purchased from them), and a number of others.
I think consumers still covet catalogs and look forward to receiving them. Is it wasteful? Yep. Are there cheaper ways to market yourself? Yep. Are catalogs fun? Yep. I don’t think paper marketing is going away anytime soon but over the next few years, I suspect social media will take over and dominate the marketing pipeline. Anyone need a social network marketing strategist?
Catalogs will remain for the same reason TV and print remain–digital works best as a permission medium and you still need methods to drive awareness. Just as TV drives awareness for consumer package goods marketers, catalogs drive awareness for multichannel retailers.
As noted here already, catalogers need to get a lot better at their targeting and microsegmentation–ultimately it could make catalog mailings more profitable. I’m a big believer in the ongoing role of direct mail but I think it will look and feel a whole lot different than it’s been. Whereas we used to have junk mail and targeted e-mail, as the online world gets more crowded there’s an opportunity for direct mail to provide high-touch customer moments if it’s properly used and targeted.
One (wo)man’s trash is another (wo)man’s treasure…. Fact of the matter is that consumers still enjoy receiving snail mail. The average household only receives 4 pieces per day, with an increasing portion of it being bulk/advertising mail.
Perhaps consumers feel that they can deal with it, as they can handle their mail expeditiously, and at the privacy/convenience of their own kitchen table. Congress has more pressing needs than to push this issue.
Think I’ll send mom, my wife, and kids a card in the mail, hoping that they don’t see it as “junk.”