Do You Want to Be Pure or Rich?

This is part 2 of my revisit to what is to become of the single title catalog.

Around 2004, when I was working at Millard Group, we hosted a client symposium. Catalogers at that point had gone from having a simple website on which – if you were lucky – you could place an order without the site freezing up, to acknowledging that the internet was something that customers wanted.

One of our presenters was Steve August (at that time, the marketing guy for the Brookstone catalogs), who explained how Datamann (a shameless plug!) was doing fractional allocation matchback for Brookstone, showing how orders on the web could be matched to a catalog mailed. There was a stunned look on many of the attendees’ faces. I could tell that many of them were thinking, “I can’t just look at a source code report anymore? I have to do all this extra work?”

Finally, the CEO of a New England based catalog company said, “I hate the internet. I wish it would go away. I can’t understand why anyone would want to order off the internet when they can call one of our telephone reps, who can help them pick the right product.” Two-thirds of the room nodded their heads in agreement with his statement, and the other third rolled their eyes and quietly thought “jerk”.

I cite this story because catalogs have moved a little further along the ecommerce spectrum, but many still harbor the belief that they wish the internet and mobile would go away, or at least, were not so powerful. They love their catalog. They know they are doing an adequate job of reaching their baby boomer customer, but they long to get that baby boomer’s 30-year-old children to purchase from them and, ideally, to place that order from a catalog, which these catalogers view as their key to catalog growth and catalog survival.

For most catalog companies, you have done everything you were supposed to with regards to your website. You have added all the mandatory bells and whistles. You have an online staff that runs your PPC, SEO, email and abandoned cart programs. You finally developed a mobile site.

But deep down inside, management still feels that the heart and soul of the company is the catalog. After all, out in the company lobby, there’s a stack of the most recent catalogs – there is not a screen on the wall showing the website’s home page.

Ok – you get the point. You are still catalog-centric. Even companies that think they have turned the corner, and think they are web-centric, admit to me that 100% of their products are in the catalog, and they have no “web-only” products.

When I Feel the Heat, I See the Light

However, this series of postings is about what has changed among catalogers in the past 2 ½ years since I first wrote about the plight of single title catalogs. I have witnessed among many catalogers a change in focus and a realization that the internet is where the future of the company lies. And I’m not just talking about having a good website to compliment that catalog, but a fuller ecommerce orientation that includes using PPC, SEO, Facebook, and Instagram, etc.

To quantify this change, think about this: At our catalog seminar in March, I gave attendees a list of 16 topics to pick from to choose what they would like covered for the seminar in 2018. I asked them to mark two choices. Out of 200 attendees, we had 84 responses (42%, not bad!). The number one requested topic for 2018 – “How do I change from being a catalog company to an ecommerce company?”.   The least popular topic – “Working with the catalog co-ops”.

But here’s the rub – just as you have maxed out the potential circulation from the co-ops, you have now maxed out the affordable ecommerce options like PPC. Yes, you can still keep mailing catalogs, and there are still some things you can do with social media, with better targeted emails, and retargeting, but none of these are going to move the growth needle in a big way.

Look around and you see that even the main stream media is carrying stories about the collapse of retailing. Thousands of stores are closing this year nationwide. Whole malls are being deserted. But who is growing? Amazon.

Now let’s go back to my title question – do you want to be pure, or rich?

Today’s bogeyman for catalogers is not the internet in general. Today it is Amazon and the other marketplaces like eBay and WalMart.com. Some of you are deathly afraid of Amazon. You think it is evil. “Why would I want to sell on Amazon?”

You either experienced or heard of examples of catalog companies which began selling a product years ago on Amazon, and which did well at first because you were the only one selling it there. Then suddenly, there were ten other sellers – including Amazon. And for the past 10 years you’ve been telling anyone who would listen, about how you got shafted by Amazon when they started selling the same cat-shaped tissue holder that you started selling on their site. Amazon saw how well it was doing for you, and they stole the idea from you. So, ever since then, Amazon has been the enemy.

I’m Amazon agnostic. My biggest concern about Amazon has been that while they grew at 25%+ each year, all those transactions were not going into the co-ops, depriving the co-op databases of a huge chunk of transactions. For some reason, this thought never occurred to many of you because the co-ops simply kept telling you “all is well”.

Many of you dislike Amazon with a passion because you see them as the reason your business is declining. The few buyers you have generated from selling on Amazon just DO NOT RESPOND when you try to market to them. These customers don’t recognize that you and your catalog were the ones that shipped that lighted pumpkin figurine – they think it was Amazon. You want to scream “This is what’s killing catalogs and retail!”

But, how many of you are Amazon PRIME customers? I’m betting that almost all the readers of this blog are, for all the same reasons that millions of other consumers are – it is convenient, and their product assortment is ubiquitous.

Should you be on Amazon? That’s a question each of you needs to answer on your own. I recently read that half the US population either never or rarely uses Amazon – so if you are serving those mostly lower-end shoppers with your catalog, Amazon may not be that productive for you, and Amazon may actually not be a problem for you.

But let’s look at your growth problem from this perspective – you have stalled in your efforts to acquire new customers from your existing sources. You have been unable to develop a marketing strategy that brings in tons of new customers at little or no cost. You are not “creative” in the new online world of marketing, and with new ways of selling. But you do have products, and if you are strong at anything, hopefully it is at being a good merchant.

Amazon is not going to stop growing anytime soon. And after last Friday’s purchase of Whole Foods, you can see that Amazon has its eyes set on many parts retailing. Either be part of it, and follow all the tactics for using Amazon effectively, or stop complaining. Do you want to be pure, or rich? Maybe the more appropriate question is do you want to have a shot at remaining in business or keep crying that you are going to resist Amazon?

I’m not an expert on selling on Amazon – but there are plenty of people who claim to be. I’m sure that one or two actually are experts, and they can help you with the whole strategy of selling on Amazon (as well as sites like eBay and Walmart.com), with regards to pricing, margins, speed, placement, etc.

If you have been a good catalog merchant, and developed proprietary products which would be tough for anyone to copy, then why not sell on Amazon? What’s wrong with generating cash? Your job is to sell product, not mail a catalog.

Let’s be clear, I’m not advocating that selling on Amazon is a cure-all for what ails the catalog industry. It is simply one arrow in the quiver, albeit a very big arrow. As with any company selling products via any channel – whether it be a retail store, a catalog, a website or all three – if you haven’t got unique product, which is priced right, and is in demand, you are in trouble. But if you do have that unique product, especially if it is proprietary to you, don’t be afraid of selling in the marketplaces like Amazon, eBay, and Walmart.

“He is no fool who gives up what he cannot keep to gain what he cannot lose.” – Jim Eliot

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com