5 Reasons Why Catalogers Struggle Selling Online

June 8, 2010 By Joe Keenan

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In a session he led at the refocused Retail Marketing Conference in Orlando, Fla., Bill LaPierre, senior vice president of direct marketing and list firm Direct Media/Millard, discussed why traditional catalog marketers have encountered difficulty transitioning into online merchants. A recap of LaPierre's session follows, along with five pitfalls to avoid when shifting from a catalog-centric business to an online-driven operation.

Catalogs may not be dead, but the future doesn't look good, said LaPierre, citing declining response rates and rising costs of mailing catalogs as contributing factors to the bleak outlook. As a result, it's critical that traditional catalog marketers focus on the internet for sales.

Inherent Advantages
The advantages of selling products online vs. via catalog are well documented: unlimited space for products; multiple methods to search products (price, style, size, etc.); customized recommendations; and, of course, cost savings. LaPierre estimates that marketing expenses account for 10 percent of net sales online, compared with 30 percent for catalogs.

In order to grow, catalogers need to view web-only merchants (e.g., Amazon, eBay, shopping engines) as their competition, not other catalogers, LaPierre said. Catalogers drive business to these merchants every time they mail a catalog, he added.

There are five common failures that doom many companies to being stuck as catalogers, LaPierre said:

1. obsession with their catalog/failure to think online;
2. failure to develop web-only products;
3. failure to drive customers online;
4. loss of the "quest of product; and
5. failure to acquire customers online.

The Most Dangerous Number in the Catalog Industry
The postage threshold weight of 3.3 ounces — the most dangerous number in the catalog industry, according to LaPierre — to qualify for the cheaper letter rate for catalog mailings often dictates the direction companies take. This is a major mistake, said LaPierre. The mentality that consumers only need 64 pages and 450 products to satisfy their needs is antiquated.

That said, some customers don't need to receive your full-sized catalog. Use analytics to determine those who don't, and save money by not mailing them catalogs, LaPierre said. Test email prospecting, email append, web-only products and web-only buyer products to find those prospects that can become customers without the expense of having to mail them a catalog. And in today's world, that includes social media.

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