What Is To Become Of Single Title Catalogs – Revisited 2017 – Part 1

Based on comments I received at the time, one of the most read and most popular series of blog posts I’ve written were on what is to become of the single title catalog, written in late 2014/early 2015. Click here for  Part 1, Part 2, Part 3,  Part 4.

Because there was such interest in the topic, and because the catalog, retail and ecommerce landscape has changed so much in just the last two years, I decided to revisit the topic, and look at where the catalog industry and single title catalog companies are headed in 2017.

(Note: as was the case in my first series of postings on this subject, I’m focusing on catalogs doing between $5/10 million to $100 million, and they are companies which may have more than one catalog title, but they are not part of a major catalog conglomerate).

In general, I’m a bit more optimistic today than I was in 2014 for some titles. There were single title catalogs doing well two and a half years ago, and even more are taking steps today to ensure their survival – maybe not indefinite survival, but they will live to fight another day. There is a greater awareness today which was not as prevalent in 2014, that catalogs must change or die.

The Catalog Malaise:

However, the majority of single title catalogs – regardless of their best intentions, are not healthy. Here are some of the symptoms I see:

  1. Little to no growth of catalog/web sales on flat circulation;

 

  1. Ever so slowly declining response rates to both house and prospect mailings, creeping down a bit every year, a trend which started after the 2008 recession, but which has not ceased.

 

  1. Prospecting with the four remaining co-ops has plateaued for almost every mailer, due to the continual decline of the co-ops’ performance and shrinking volume of viable co-op names which I’ve written about many times previously. What has changed in 2017 is that I rarely receive any argument from mailers now that this is occurring, and mailers find incredulous the co-ops’ counterargument that the co-ops are actually growing.

 

  1. As circulation flattens, or declines, product margins continue to erode, as mailers lack the ability – or the fortitude – to commit to inventory quantities necessary to get volume discounts.

 

  1. Smaller, ancillary titles that were started 10 to 15 years ago because they seemed like a great brand extension at the time, but which today are simply bleeding losses, are being shut down.

 

  1. CEOs are being fired or let go with greater frequency and after shorter tenures. They are being given a short leash to fix what’s wrong, or are bounced quickly.

 

  1. For even successful catalogs, there are across the board reductions in staff, with the remaining staff often not having any “catalog” experience.

 

  1. With budget allocations moving toward web development, legacy “catalog systems” (be they marketing, merchandise or order processing systems) get left in place, which causes the mailer to fall further behind.

 

  1. Prior to the recession, every time I visited a client, either the CEO or VP of Marketing would pull me aside and say in hushed tones “We are looking to acquire another title. Let us know of anything that is for sale”. Of course, they always thought they were the only ones asking me this. Hardly anyone asks this anymore.

 

All of these symptoms of “catalog malaise” lead to more challenges.  Most mailers know deep down inside that improved merchandise performance, and new products, are the two key ingredients to lift performance. But developing a “sound merchandise strategy” takes time. So, the focus invariably becomes “what can we do immediately?”

The “immediate” fix usually leans towards marketing – and often that means pursuing a series of short-term response tactics/gimmicks:

  • Mailers go down the rabbit hole of offering discounts and offers, and often much earlier than what passed previously as “normal”. A cataloger that previously could hold off until August to have a “Summer Sale” is now offering 30% of the entire catalog in May.
  • Mailers end up working with too many vendors that are “one-trick” ponies, that have one “product/service” that is the “game-changing disruptive technology” du jour. In reality, although these product/services are successful, they only move the response rate by a fraction, or result in acquiring only a handful of new customers. Lots of noise and distractions for little results.
  • Or, the company decides that in order to attract a “younger” customer, they need to update the brand. So, major resources of time and money are spent – wasted in my opinion – on new brand/creative initiatives which typically fail, since they never generate any significant increase in response. The reason for failure is that management acts on their gut instinct, or on the basis of “best practices” fueled on advice from consultants, but neglect to consider the one certain source of information that would be helpful – they never talk with their customers.

As previously mentioned, some catalogers are doing well. They are focused on merchandise productivity. Yet, every catalog/web company exhibits some of these “traits of malaise”. There are few within the industry that see a rosy future for the print catalog going it alone.

Of course, in many companies, there is a line (in some cases, it’s a wall) between what is being done in print and online. Consequently, even if your online team is doing a great job with developing dynamic pricing, adoption to cart programs, and a great mobile site, the catalog is still the dominate force within the company. As one client said to me recently “We are struggling with becoming “Digital first”. The print catalog permeates everything every department does (merchandise schedules, catalog production meetings, operations, finance and even HR).  It’s EXTREMELY difficult to get through even one meeting without saying the word CATALOG.”

What are the options? That’s where we will pick up next time.

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com