Guest View: Search Expert, Blogger Extraordinaire Posts 9 Prognostications About Your Future

As per my headline, for this issue of Catalog Success: The Corner View, I hand my pen — um, keyboard — over to Catalog Success E-Commerce Insights columnist Alan Rimm-Kaufman.

Alan heads the Rimm-Kaufman Group, an online agency providing large-scale paid search bid management and Web site testing services, and was formerly a marketing executive with the Crutchfield catalog of consumer electronics.

I leave the stage to Alan, who starts with a potential scenario followed by nine predictions for the future of the catalog/multichannel business as it affects you.

Scene: A bar at a conference hotel during a marketing trade show.
Bill: Tim? Is that you?

Tim: Bill! Let me buy you a beer. How long’s it been? Four years? You’re looking great.

Bill: Thanks. I think we last met up at a catalog conference in 2008. So yes, about four years ago now.

Tim: Gee, have things changed.

Bill: Really.

Tim: And it seems to just keep getting worse. Would you ever have imagined we’d look back on 2008 as the “good old days?” Postage at 42 cents? Gas at $4? Sheesh, cataloging was easy then.

Bill: Too true.

Tim: Prospecting and acquisition mailing was still legal in ’08, right? The Never-Mail-Me Act hadn’t yet passed, the catalog co-ops were still in business and you could still rent lists. Remember the old list rental business? All those brokers and managers? And back then Catalog Choice was the only Never-Mail house.

Bill: Different times. But how’s your business?

Tim: We’re hanging in there, but it’s really tough. We’ve been shrinking — another round of layoffs — and we’re down to only three titles. We keep losing sales to the Web pure-plays, and the brick-and-mortar retailers have killer virtual reality stores online. We’re still mailing catalogs to our buyers, but the response just isn’t there. How’s your work going?

Bill: Oh great, really great. I started a new job last fall, and that’s a blast. Great people, interesting projects. Frankly, we’re struggling to keep up with the growth.

Tim: No way! What cataloger are you working for?

Bill: Oh, no, I left the catalog industry. I joined Google just after the Yahoo! acquisition. I’m managing the sporting goods category for GoogleMall. You wouldn’t believe the power of our customer-intent predictive models …

9 Predictions for the Not-Too-Distant Future
Perhaps the future of cataloging won’t be so bleak. Perhaps it’ll never get as bad as that conversation above. But it might. The catalog industry is changing at dizzying speed. Can you see your current business model working in five years? If not, the time to start making changes is now.

Here are nine predictions. All are reasonable, but taken together, they paint a bleak picture for traditional cataloging.

1. The “Never-Mail-Me” movement will grow. The organization may or may not be Catalog Choice, but there’s growing public sentiment that cataloging is unacceptably wasteful. Look how quickly the Do-Not-Call concept swept the country.

In months, 50 million people opted out of telemarketing, and Congress quickly passed the Do Not Call Registry in 2003. A similar thing happened to e-mail with CAN-SPAM.

If you don’t think the same thing could happen to unsolicited catalog mailings, your head is in the sand. How will your business attract new customers when you can no longer mail prospects?

2. Postage will continue to rise steadily. As bulk mailers mail less, there will be less bulk fees to fill USPS coffers, leading to additional rate increases.

3. Fuel will continue to soar, driving up freight and delivery costs.

4. Product pricing will get extreme. There will be room at the bottom for retailers crazy enough to compete head-to-head with Wal-Mart. There will be room at the top for ultra-luxury, high-cost goods. The middle ground of pricing will evaporate.

5. There will be no room for poor service. Customers will expect all Web sites to behave like Amazon.com and eBags, all call centers to behave like Lands’ End and Crutchfield, and all customer service departments to behave like Nordstrom and L.L. Bean.

This level of service will be expensive. Search engines will present retailers’ ratings right alongside their product listings.

6. “Push” marketing channels like e-mail will die. They’ll be killed by spam. Marketers will need to compete via “pull” marketing channels like RSS. Permission-to-market will become the direct retailer’s most valuable asset.

7. Merchandise depth will recede. General merchandise catalogs and gift catalogs will flounder, losing share to specialty retailers — merchants who understand the long tail.

8. Google will own the top of the purchase funnel. Online retailers will need top-notch paid and natural search to survive.

9. Consumers will expect free shipping. And they won’t be fooled by retailers who roll those costs into their pricing.

These visions sound bleak, but I’m not a pessimist. I believe the future of direct selling is bright. The Internet lets us communicate our message to the entire world at essentially zero cost. The only trick is saying something the world wants to listen to.

The availability of detailed, predictive data is soaring, and the cost of computing is plummeting. That helps us. And, from a total energy footprint, direct selling may be more environmentally friendly than traditional retail.

I’m seriously concerned that the traditional cataloging model may not survive. I’m simultaneously bullish about the “new” direct marketing. The future belongs to the brands and business models that evolve fastest. Are you ready?

Alan Rimm-Kaufman leads the Rimm-Kaufman Group, an online agency providing large-scale paid search bid management and Web site testing services to online retailers. You can reach Alan online at www.rkgblog.com.