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Catalogers' future lies in e-commerce

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In the face of rising mailing, distribution and delivery costs, catalogers are focused on growing nonprint alternatives, according to a study published last month by printer Transcontinental Printing.

"The areas of significant investment in the future will go toward e-commerce," said John Healy, principal at Healy Communications, Chicago, who helped craft the study with Transcontinental. One hundred catalog executives were polled in the survey, which was conducted in March and April and tabulated by Miller Research Group.

When asked to name priorities, the largest number of respondents (78%) cited growing mailed catalog sales. Yet only 35% said they would invest in increasing the frequency of mailings and only 26% said they would invest to improve catalog quality.

Almost as important among top priorities was growing Web site revenue, cited by 73% of those surveyed. Two-thirds (66%) of all respondents indicated they would make a significant investment in Internet and e-commerce applications this year.

Investing in online channels

Jist Publishing, a cataloger that sells educational materials and training products, is investing in online channels as a strategic supplement to its catalogs. "People like the catalog in their hands to thumb through it, but they also look for additional sources of information through other channels from our company," said Tom Abeel, VP-marketing information at Jist. "That's where the Web is powerful." Jist participated in the study.

Abeel said there are things his company can do on the Web site that don't work in the catalog, such as providing in-depth product information or enabling customers to download a preview of a training video.

"From a budget standpoint, we're probably investing more in Internet, but I wouldn't say we're doing less on the print side," Abeel said. In fact, Jist is contemplating creating a few smaller niche print catalogs for specific audiences, he said.

Catalogers are working hard on developing multichannel offerings because they realize no single channel can do it all. Seventy-two percent of catalogers surveyed said that creating and enhancing multichannel offerings is a top priority.

"Catalogers are becoming much more knowledgeable about how the Internet interacts with their catalog," said Bruce Jensen, VP-U.S. sales at Transcontinental.

Industry observers say it is wise to diversify. "You should always be looking at alternatives [to print]," said Lois Boyle, president of J. Schmid & Associates, a catalog agency and consultancy. "Putting your eggs in one basket is never a good idea."

However, Boyle said b-to-b catalog companies are less savvy about the Web than their consumer counterparts. "A lot of them just don't have search functions they need, ways to cross-sell to increase the average order. You have to have a great online presence."

CDW Corp., an IT products marketer, takes a multichannel approach that includes the Internet. "We are not de-emphasizing print," said Fred Neil, VP-strategic marketing. "We let customer behavior drive our contact strategy."

CDW uses catalog, direct mail, e-mail, banner and keyword buys. "The mix of that varies by target audience and ROI by vehicle," Neil said. "CDW is constantly testing different vehicle types and formats, and the winning formats are where we put our money."

Mailing smarter

J. Schmid's Boyle said she has seen similar approaches by the consultancy's clients. "What we've seen is that catalogers are not necessarily mailing less," she said. "They're mailing smarter and more efficiently." That means mailing the best customers more frequently, others less frequently. It also means understanding deeply the metrics that make sense for a particular catalog company.

"With deteriorating response rates, and with the smaller universes [of customers] associated with b-to-b and the cost per piece going up, it's harder to get efficiencies," Boyle said. B-to-b marketers need to understand their own metrics to determine whether print and online campaigns are affordable, she said.

In addition, b-to-b catalog companies might consider augmenting their "big book" catalogs with category-specific supplements. That is one way, Boyle said, to remind the customer of your company and products. "They still need the tap on the shoulder, whether it's a postcard, a supplement, an outbound phone call or mailing the catalog more frequently," she said.

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