Special Report: The Art and Science of Catalog Management

Two essential ingredients of any successful catalog business — marketing and merchandising — have artistic elements where experience, creativity and intuition count more than numbers and cold hard facts. But they also have numeric benchmarks that if ignored, can spell disaster for customer acquisition, customer retention and brand integrity.

Marketing and merchandising skill sets and viewpoints are vital, and impact the bottom line. When they’re in sync with each other, the resulting catalog invariably is better than either can deliver on its own. Interaction between the two disciplines is a two-way street, rather than a linear path.

There are several ways to leverage the expertise of each discipline. Even when catalogers have the same units — print catalog, retail store and Web — their approach to executing the best possible catalog is unique relative to their brand, target audience and mission.

The Art

The “art” of successful catalog management lies in finding and visually presenting the perfect products to your target audience. Here, merchandisers excel with their in-depth understanding and knowledge of a merchandise category. Catalogers develop expertise in particular product categories (both discovered and nurtured); strong vendor/buyer relationships are forged; and opportunities for new, and often exclusive, products emerge. They create a cycle to strengthen brand recognition with consumers. Product selections reflect the mission of the company and set the tone for your print catalog, Web site and other promotional marketing efforts.

Marketing’s artistic touch is evident when it suggests a call-out for the cover, or knows to sweeten the offer with special pricing or other incentives. Marketing people also apply creativity to the customer file and prospect list analysis. They should note past success with certain list segments and bring that to the attention of merchandising so the product line can be enhanced or positioned to appeal to this segment. Database-derived marketing reports often reveal demographic and lifestyle information on customers that provide a goldmine of information to merchandisers.

The Science

The “science” of catalog management involves knowing what your numbers mean and responding appropriately in communications with customers about the products your company offers. Guided by circulation plans, response rates and print production expenses, marketing excels in advertising the products to the optimal group of potential customers. Merchandising’s review of product sales and inventory issues get factored into the advertising plans.

But numbers only go so far, given the future is never identical to the past. A two-way flow of hard data gleaned from statistics and historic performance, as well as intuition based on a thorough knowledge of your niche, is necessary for a winning strategy.

A Synergistic Relationship

Today’s catalog/multichannel business offers many opportunities for marketing and merchandising to work together to gain greater efficiencies. Multichannel marketing efforts may require marketers to identify opportunities for prospecting in media such as space ads or television. Capitalizing on these opportunities often requires a hero product of a certain price, which marketing and merchandising should work together to identify. They may need to acquire new items specifically for this purpose but that still support the overall brand and attract a prospect with strong lifetime value to that brand.

Media such as DRTV and print require hero products — a full catalog offering is neither feasible nor historically successful. History dictates certain price point ranges are the “sweet spot” for these media to be effective. If a marketer wanted to acquire customers through DRTV spots, a product under $25 is mandatory. The cataloger might not have any strong products under $25, and thus should search for an appropriate product for customer acquisition via DRTV.

The synergy between marketing and merchandising at the Smithsonian Catalogue has long been a key to its success, particularly when it comes to adding new product categories. When reviewing sales performance by product, Sid Bakke, a veteran catalog buyer with the Smithsonian Institution, observed strong performance in the miniature dollhouse furniture product category. When he communicated this to the marketing group, Director of Marketing and Strategic Planning Susie Boghosian sought lists of miniature dollhouse furniture buyers.

These lists performed well for the catalog, and resulted in the buyers seeking out new trade shows specializing in this product category. The catalog’s ability to adjust its mailing plans and refine its buying strategy resulted in a chance for sales growth that might otherwise have been missed.

Sometimes the collaborative effort between merchandising and marketing reveals information that challenges a well-established company practice. For the past 16 years, FLAX art & design has sponsored a cover art contest, wherein customers submit catalog cover designs. The winning design is featured on its catalog cover.

The company’s Vice President of Marketing Craig Flax says that recent analysis of sales reveal that covers featuring its products outperform the art covers. As such, plans currently are being adjusted and refined to incorporate this new information into future catalog campaigns, without alienating its carefully cultivated customer base.

Unplanned marketing opportunities often lead to new merchandise ideas and products. Successful catalogers quickly respond to these marketing opportunities. For example, Smithsonian Catalogue’s marketers rely on its merchandisers to quickly identify a product for a free mention in a “What’s Hot” shopping article when a newspaper offers the opportunity.

Marketers and merchants at consumer electronics cataloger Crutchfield are ready to launch a Web page within minutes of a new product announcement from a major electronics company. FLAX art & design’s Director of Merchandising Patti Ansley has weekly meetings with the company’s marketing department to determine the optimal product to feature on the homepage of its Web site.

Bridge Across the Divide

Building in routine opportunities for the exchange of ideas is key to encouraging a creative communication flow between your marketing and merchandising groups. Look at your current processes and build in regular meetings, reports and other forums to ensure this exchange has an opportunity to flourish.

Regardless of whether your merchandising and marketing teams are large or consist of just a few key people, constantly sharing information, interpreting data, adjusting plans and refining offers across department lines is essential in today’s multichannel environment. Companies with this corporate culture are thriving today. By finding a cooperative working model that fits your business, you’ll enjoy greater efficiencies, acquire new customers and retain your existing customer base.

*** To learn more on the art and science of catalog management, look in the upper-right corner under Related Items for “Setting Your Goal: A Roadmap to Success” for a tips-laden game plan for your company. Then, click on “The Sum of Crutchfield’s Parts” to read more on how the electronics cataloger handles this matter.

Shari Altman is president of Altman Dedicated Direct, a direct marketing consultancy specializing in acquisition, continuity, DRTV and loyalty marketing. She can be reached at (336) 969-9538 or saltman@altmandedicateddirect.com. Susan Bates is senior merchandising consultant at Susan Bates Consulting and can be reached at sbates@altmandedicateddirect.com.