Print-Plus: Who Killed the Catalog?

For years now, critics have been saying the print catalog is dying. Going away. A relic that's being replaced by the internet. It was almost like the word "catalog" was dirty. Something out of date or old fashioned, or so it seemed.

If the catalog is dying, why did J.C. Penney recently decide to bring its back? Or why did Dell start mailing again after trying to get out of the catalog business several years ago? And why are companies like J.Crew, with more than 300 brick-and-mortar stores, such big believers in the print catalog?

You see, the truth is catalogs are far from dead. I've never thought for a minute that the catalog was dying. Even a few years back when all of the critics said it was and when trade publications were eliminating the word "catalog" from their mastheads, it was never a career-changing event for me. I've always believed in the power of a printed catalog and its impact on driving sales and revenues. Case in point: Catalogs are the single largest driver of traffic to the web. We know from matchbacks that 70 percent or more of all online orders are the direct result of mailing a catalog.

J.Crew CEO Mickey Drexler goes over every one of the brand's catalogs with a fine-tooth comb before it's published. "I'm looking at the color; I'm looking at the clarity of a picture, the newness, the creativity," Drexler said in an interview with CNBC. Roughly 30 percent of J.Crew's revenue comes from online and catalog sales; the two are tightly intertwined. "Most of our business goes from catalog to online," Drexler said. "I'm always looking at the turn-on item or category or outfit that will drive them to want to shop at J.Crew instead of the millions of choices out there."

When a catalog mails, online sales spike — both desktop and mobile. A typical cataloger will trace approximately 20 percent to 25 percent of their orders to a source code on the front end before a matchback. Post-matchback, this percentage will increase to 70 percent or 80 percent, depending on whether the book was mailed to the housefile or prospects.

Let me give you an example: Let's say that the total revenue from prospects is $100,000. We will typically trace 25 percent (approximately $25,000) to a specific source code when the order is placed (i.e., front end). After a matchback, this revenue number will at least double to $50,000. The two totals added together give us $75,000, or 75 percent of the revenue that we're able to attribute to the catalog. The remaining 25 percent is coming from the web and miscellaneous sources.

The Role of Catalogs in an Omnichannel Marketing Mix
Why is a printed catalog so powerful and important to an omnichannel marketing program? There are several reasons why you shouldn't stop mailing catalogs just yet:

• A print catalog is all about the brand. It supports and reinforces the image and elevates the status of your brand in the mind of the customer. A print catalog helps create brand loyalty, but most importantly, it exemplifies what "the brand" is all about and what it stands for. Print catalogs are all about targeting a specific audience — i.e., the exact market you're trying to reach. Catalogs are all about planning and executing your strategy properly and tracking the results accurately.
• Lifetime value (LTV) is an important consideration. A buyer from a print catalog generally has a higher LTV than a web-only buyer. If someone goes to a search engine looking for a particular item, they might buy it at the right price, but it doesn't mean they're ever going to buy from that brand again. However, if the buyer originates through the catalog, they're often more loyal. You're more of a "shopper" when you order from a catalog and an "item buyer" when you buy online.
• The cost to acquire a new buyer online can be less than acquiring a buyer from a print catalog. That's why LTV becomes so important; it's not about the initial order, but rather the number of orders the customer will generate over time. Years ago, I heard someone give the definition of a "buyer" and a "customer," which has stuck with me. A buyer is someone who purchased once; a customer is someone who purchased two times or more. All catalog businesses need customers, not buyers. While catalog brands need to be willing to invest in the acquisition of buyers in order to grow, they cannot survive long term on one-time-only buyers. Neither can pure-play retailers. They both need customers.
• Consumers don't shop the internet the way they shop a print catalog. They enjoy thumbing the pages of a print catalog, looking at every item. Many catalogs are coffee table pieces that get saved and reviewed again and again. Consumers often "dog ear" the pages so they can reference certain items of interest later. Internet shoppers are generally searching for a specific item. Online catalogs haven't gained much traction and cannot be compared with a print catalog held in one's hand.
• Catalogs are effective when prospecting for new buyers. Most consumer prospect names are selected from one or more of the cooperative databases. These are proven mail order buyers modeled and targeted to your particular merchandise offer. Prospecting via the internet is more difficult. For example, rented email prospect lists don't work for catalog offers. A print catalog increases pay-per-click and search engine optimization performance. Every time a catalog goes into the mail, digital marketing programs benefit. That's why it's important to coordinate web-based marketing programs with catalog circulation plans.
• The internet is another way to order; it's about how consumers like to place orders. Consumers now have a choice to order via a toll-free 800 number, by fax or mail, or by placing their order online. Just like the catalog is what inspires a consumer to pick up the phone to place an order, it also motivates him or her to go online to place their order. The internet is much more powerful, yet at least 70 percent of the time it serves as nothing more than an order channel which was initiated by a multipage print catalog.

New Life for Catalogs
According to the American Catalog Mailers Association (ACMA), the number of catalogs mailed in the U.S. peaked in 2006, then fell 31 percent from 2006 to 2011. Last year saw a slight increase in catalog circulation. The ACMA reports that the number of catalogs mailed in 2014 was 13.3 billion, which is down from 20 billion in 2006. Approximately 50 percent of all Americans make purchases based on the catalogs they receive. There are 9,284 catalog titles in the U.S., according to the ACMA.

During the past five years, several e-commerce companies have come to Lett Direct asking us to start a print catalog program for them. These business owners realized that they could only grow so much with a web-only strategy. They recognize a print catalog program is critical to their long-term growth. These companies are now using catalogs to sell more merchandise to existing customers and to prospect for new buyers more cost effectively. They're omnichannel retailers that can cast a wider net and capture a larger piece of the pie.

According to Uri Berlinger of National Public Radio, "the death of print is highly exaggerated, at least when it comes to shopping." Fact is, consumers love catalogs. Print catalogs are very much alive!