The fall catalogs are starting to pour in, so it is time for some commentary and observations on what catalogers are doing.
Here is something you can do at home: go to the Brookstone website and try to request a catalog. Because I worked at Brookstone for nearly ten years, I still love to look at their catalog. But I don’t get it anymore, even though I have made recent purchases from their website. So, I went to their website to request one, and could find nothing that said “Request a Catalog”. I went through every link in the “About Us” and Company Information tabs at the bottom of the home page.
However, I did find this comment in their Corporate Overview “Originally a catalog company, Brookstone today operates a multifaceted Direct-Marketing business that includes catalogs, e-mail and affiliate marketing, and an online site offering hundreds more products than are available in our retail and airport stores.” Ok, so they still think of themselves as having a catalog – but how does one get it?
I finally found a link buried in their FAQs for a place to request a catalog.
The catalog purist in me wants to ask when did we decide to make it nearly impossible to request a catalog? But in reality, this makes perfect sense, especially for a catalog like Brookstone. Most of you have been losing money on catalog requests for years. You did it because you thought it was important to maintain this vital customer service. But if you are a high-end gadget oriented company like Brookstone, do you really want to encourage someone to request your paper catalog, especially if you know it will most likely be unprofitable? Of course not. (Just because you can do something, doesn’t always mean you should.) You want them to sign up for emails and your mobile app.
Take a hard look at the profitability of your own catalog requests, and determine if this is an area which because you have ignored it, is a place that is robbing you of profits.
First, a little background. Paragon has been using a similar cover “template” for several years. I’m sure the consistency of their creative strategy makes cover designs a snap – nothing to argue about with regards to what goes where. Of course, they may have bored their customer to death a long time ago by making it appear that there is never anything new in their catalog, but a drop in response is the price you have to pay for ease of design.
If you have been a long time reader of this blog, you know I love to point out stupid cover tests. But the test below (both covers received last week) could actually make a significant difference.
First, I applaud someone at Paragon for being able to push this test through – I’m sure it wasn’t easy to get agreement to even do this test. I’m certain there was endless debate over which model to use, whether she was representative of their customer, and should this be a location shot, blah blah blah. But this test illustrates that even in catalogs where somethings appear to be set in stone, someone with a little courage to dare to break the mold can potentially make a big difference.
Holiday Sales Assumptions:
I’m not a financial analyst, but I do try to get a reading of the tea leaves in late summer every year to determine the outlook for the upcoming holiday season for catalogers. Since many of Datamann’s clients are based in the UK, they lack the visibility into what is happening here in the US. Here is my current thinking:
Years ago, one of my clients who was a “well-seasoned” veteran of many holiday seasons shared a bit of wisdom with me. He worked for a major, mid-ticket apparel retailer. In his experience, which stretched back to the early 1960s, in years when a major new technology product was being introduced (color TVs in the 1960s, IBM home PCs in the late 1980s, iPads/iPhone in recent years), his company usually saw a dip in holiday sales because the consumer was shifting dollars into a major product. The good news is that there does not appear to be such a product on the horizon for 2015.
If you were to read the 2nd quarter sales reports for some major retailers and look at the amount their same store sales were either up or down – Macy’s (-2.6%), Sears (-11%), Kohl’s (+0.6%) and Wal-Mart (+1.5%) – you might think the consumer had stopped spending this summer. But other retailers fared much better in the second quarter, including Target (+2.4%), JCPenney (+4.1%), Victoria’s Secret (+3%), Lowe’s (+4.3%) and Home Depot (+4.2%). I won’t go into the details of why some were up and others down. Suffice it to say that the consumer is still spending.
But here is the potential problem. As gas prices continue to drop (I paid $2.30/gallon yesterday – woo hoo!) sales of SUVs, and pick-ups have gone up. Ford is running out of frames for F150 pick-ups. New car loans hit a 10 year high during 2nd quarter. Although Americans have piled on some new debt related to cars/trucks, I don’t think that will be enough to dampen spending later in the holiday season. Unless there is some other major incident lurking out there that we don’t yet know about (another Hurricane Sandy, the decline of the Chinese economy, something happening in North Korea), the economy looks OK for this holiday season. (Of course, as I’m writing this late Friday afternoon, the Dow average dropped 500+ points on fears of an economic collapse in China, which only goes to show how volatile the economy is, and how irrelevant predictions like this can be).
Here’s one more thing to think about. During years with a Presidential election, every mailer has asked whether I thought the election would have an impact on response, and should they delay mailings around the actual election date. If you asked 100 mailers that question, you would probably get 100 anecdotal responses. I don’t expect the 2016 election to be any more or less raucous that any other election cycle from the past 20 years. But, I do expect one thing to happen. Most mailers are going to aim to have their catalogs in-home after the election. Because of the growing volume of co-mail pools, that is going to force a ton of catalogs into mailboxes around November 10 next year. It may not be the election that hurts response, but the post-election crunch in the mail box. Think about that when you are evaluating your responses from this fall’s mailings and planning next year.
A Sweet Anachronism:
Target Marketing magazine recently published their annual list of the 50 top mailers. This is not based on postal receipts, or printer’s logs. It is a highly subjective list based on mail received at their sister company, Denny Hatch’s Who’s Mailing What. Here’s what is funny – the list still includes whether the mailer’s customer list is available for rental, and if so, who is the list manager. Only 12 of the top 50 still have their list on the market. What a sweet reminder of a long ago mailing industry metric.
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by Bill LaPierre
VP – Business Intelligence and Analytics
Datamann – 800-451-4263 x235