More Fall 2017 Catalog Observations

Response and Distractions:

Finally, some good news to share. From what I’m hearing, results seem to be favorable so far this fall for the hard goods and gift mailers. The rash of hurricanes, storms and fires have impacted results in their immediate geographic areas, but the rest of the nation seems to moving along without allowing these events to disrupt their shopping. However, one consequence of all the storms in the South is that until the last few days, they have pushed warm tropical air north for almost six weeks, even here in New England. The result is that I doubt many consumers have been buying sweaters, parkas or wool socks – consequently many apparel mailers are reporting some softness.

 

This is Why It is So Hard – Even The Evangelist Can’t Let Go:

I do the circulation planning for some of Datamann’s clients.  One of them – a steady reader of this blog, and who knows my distrust and disdain for the co-ops – was reassessing whether to mail all the prospect names we had planned for the last drop of their Holiday catalog. The names have not been ordered and the books have not been printed – but we have to make a decision this week. The mailer has been having great success online with several new initiatives this fall, including several new PPC programs. He was debating about cutting catalog prospecting and shifting budget dollars online. He would still be acquiring new customers, but not with the catalog.

ME: “But the last drop of Holiday is one of your best prospecting drops of the year measured by sales per book. Why would you want to cut circ there?”

Client: “But you are the one always preaching in your blog that the co-ops are not going to get any better. If they are dying, why continue investing there, especially since the performance from the co-ops has been so poor this year? And yes, sales/book are stronger than the rest of the year, but the cost per new customer is still way below breakeven. I should spend my few discretionary budget dollars where I have good return, and where there is a future”.

ME: “Yeah, I know what I wrote in the blog. But I find it hard to agree with you to cut back on catalog circ, because it is one of those things that once cut, you will never return to.”

Client: “I understand…but the answer is in the numbers.  If I can find MORE NEW customers elsewhere…and I can manage to improve their LTV, then that is the path I should take.”

The cynics among you will say that I was advocating that the mailer not cut circulation because Datamann is a company which profits from catalogers mailing catalogs. Yes, this is true, but it never shapes our advice to clients. You’ll never see me hawking one of those bogus studies from the USPS or the DMA that says millennials love catalogs.

But I’ve spent the first 35 years of my direct marketing career believing in the power of lists (although maybe not the co-ops), of catalogs, and of mailings. Regardless of the advice and wisdom I dispense in this blog about how YOU must change, when it came time for me to be the practitioner, I found myself not wanting to let go. Sentimentality is probably the biggest enemy of the catalog business.

This is partly why I have distanced myself from working directly with the co-ops. I only do that for one client. For all the others, I work with list brokers from 4Cite and one from Infogroup. It makes it much easier to cut circulation, or take more names from one co-op over another when I don’t have to respond to the Account Manager at the co-op.

Yes, I can empathize with you if you are finding it hard to let go of your existing business model. I love mailing catalogs just as much as you do. But as my client reminded me “the answer is in the numbers”.

 

Just In Time:

Catalogers have always believed that consumers will bend to the catalogers’ timetable. I was always amazed that apparel catalogs began selling their “fall” assortment in late June. The thinking was always that consumers want to get a “jump” on the new styles. Twenty years ago, that might have coincided with the customer’s shopping pattern, but now we know consumers buy much closer to need.

I find it extremely ironic that on the same day this week I received my Vermont Country Store Christmas Catalog, I also received a postcard from Jet (owned by Wal-Mart) advertising Halloween costumes. Catalogs are always working two to three months out, and on-line companies are working one to two weeks out. That’s why catalogs seem so irrelevant to many consumers. When I was a kid, mid-October was just about when I began thinking about a Halloween costume. Using Jet, I can order everything related to Halloween (candy, decorations, party supplies, costumes) and get free 2-day shipping. Catalogs need to adapt to buying at the time of need to remain relevant.

 

Lands’ End is Back:

After roaming the wilderness for many years, Lands’ End is back. In my opinion, their current book has the charm of what I used to expect from Dodgeville ten and twenty years ago. To be sure, it is an updated look, especially with the cashmere offer on the front cover and first four opening spreads of cashmere. But the balance of the book is very reminiscent of the Lands’ End of old.

This is supposedly what their customers wanted – a return to “good old Lands’ End”. It is certainly what all of you catalog professionals (and especially the Lands’ End alumni) wanted. Time will tell if this was a smart move.

 

Amazon Headquarters 2

You all know that last month, Amazon announced plans to open another headquarters somewhere in North America. Called “HQ2,” the facility will cost at least $5 billion to construct and operate, and will employ as many as 50,000 workers. Cities and states all over are hatching plans to get the prize. The dealine for applications is this Thursday, October 19.

I just want to put you all on notice that New Hampshire (where I live) has thrown its hat in the ring as one of the sites for Amazon’s planned second world headquarters. Our carrot? We have no sales tax, no income tax, and lots of undeveloped land. Our governor is going all in on this, and he appears to be serious.

Of course, there are a few problems with choosing NH. Two of Amazon’s criteria are the location must be a city of 1 million population, and there must be an international airport within 45 minutes. Our largest city only has 110,000 people, and our only international destination from the Manchester Airport is Toronto. But our governor is pushing the “quality of living” angle, promoting the fact that we have moose – lots of moose and bears.

Here’s the rub – online companies like Amazon have contributed to the death of many of our small retailers, who in my opinion, offered lousy service and over priced merchandise. However, when the small hardware stores and  clothing shops close, the local restaurants struggle, and then they close too. Then the “quality of life” angle gets harder to push. Our neighboring town of Peterborough has two thriving businesses right now – retirement homes and funeral parlors. I’m thinking that New Hampshire’s chances of landing Amazon HQ2 are slim.

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

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Early Fall 2017 Catalog Observations

Optimism:

I began making notes for this Labor Day posting in early August. At the time, I was going to report there has been a turnaround in response – many clients and mailers are reporting they are doing better. June and July were strong. We have one high-end client that is reporting they are 20% up in demand. Several clients are planning modest increases in circulation for holiday.

Why? In my opinion, since the election, the stock market has just kept climbing. Every month, when your baby boomer customers get their 401K and other retirement account statements, and see that they just made another $2,000, or $6,000 in the past month, suddenly they start thinking that maybe it would be OK to buy that new coat, or new shoes.

Then Harvey hit last week. Although the storm itself will curtail response from the Houston area for at least the next few months, I don’t think the rest of the country stopped long enough to watch what was happening in Texas to cause a significant drop in response to catalogs in the mail. Of course, there’s always another national distraction just waiting to happen – Irma could pose a problem in a few days, as could our friend in North Korea. You just never know.

But there is one tangible impact from Harvey which may become a factor to response. I fueled up my truck last Thursday night at $2.28/gallon.  Two hours later when I drove by the same gas station, the price had jumped to $2.60, and I saw a few places over the weekend at $2.70. But, even with this 15% increase in gas prices, I don’t think it will impact response too much. (Yes, I know my readers in the UK are shaking their heads in disbelief that we might even consider this a problem.)

Assuming that we have no further national distractions this fall – which appears doubtful – I’m feeling pretty good about response rates for this Fall/Holiday season, especially for the higher end offers.

 

Optimism for Whom?

Several times this year, I’ve written postings that paint what I consider a realistic picture of the future of the catalog industry, which as I have pointed out, is not good. The purpose of this blog is to offer some advice, some commentary, some observations and some truths about the catalog industry. You won’t get a realistic view of the industry from what is left of the direct marketing trade publications, because they are dependent on the few remaining advertisers that bother to run ads. You won’t get a realistic view from the few conferences left (except the Datamann catalog seminar in April) because they are dependent on the sponsors that underwrite the conference, and therefore dictate the editorial content. There is a sharp dissonance in what we are told is happening and what is really happening.

And here is why. The vendors in this industry have a responsibility to their shareholders to keep you renting names and printing catalogs. They do not have a responsibility to you as a customer. They will always steer you in the direction most advantageous to their shareholders. The clients that work with me here at Datamann know that is not how I operate.

But the most important goal of this blog is to offer optimism to the catalog industry. That optimism does not necessarily mean optimism for all players in the catalog industry. In some cases, it can be downright pessimistic for some folks in the industry. My goal with this blog is not to bring the catalog industry to its knees – it is to bring it to its senses. If catalogers are to survive, they have to evolve into other types of companies – a combination of ecommerce, mobile and traditional catalogs, as well as develop new methods of selling stuff and acquiring customers of which we have not yet thought about or invented.

But here are three signs that some of you “get it”. You understand that you must change.

#1 – Holdout Panels:

Kevin Hillstrom has for at least the last 10 years been saying the only true way to measure the impact of your catalog is with a “holdout” panel, which measures the response from names not mailed your catalog to determine the amount of sales generated organically, without aid of a catalog. The long-term impact to your profits of knowing this number is huge. But, so is the short-term impact to your sales – and that is why most of you don’t do a holdout test.

Datamann is working with five new catalog launches this fall – all of which have existing websites, and existing customers. Four of the five are doing holdout tests. They are not assuming that the catalog will drive sales – they want to prove the catalog will drive incremental sales. Why aren’t the rest of you doing similar tests?

#2 – No Catalog At All:

I received the six-panel brochure below from Ugly Dog Hunting company last week. There are no products for sale – only photos of hunters with their dogs. This is admittedly a small company from Vermont where Datamann is located.

They announced inside that there would be no catalog this year, just this flyer. And they went on to give a number of reasons why you should check out their website. The trade-off was this: “We know many customers like flipping through the catalog, but by going completely digital, we save a ton of money that keeps the product costs down and flexibility up. It also allows us to offer Free Shipping on orders over $50.”

I know nothing about this company – so this could be the last act of desperate owner. But, giving up a catalog in order to offer free shipping seems like a logical way to be in the arena with Amazon. He may have to send the brochure every year, in order to remind customers he’s still there. But at least he is doing something different – have you tried something similar?

#3 – The Strong Webdriver:

OK – You dismissed the above example from Ugly Dog because they are small, and extremely specialized.  You say it won’t work for you. So, let’s look at a mainstream cataloger like Athleta. My wife was reading it this morning and said “every spread in here is a web driver”. She’s been paying attention to what I’ve been saying for 6+ years, which is that your website must be stronger than your catalog, and the catalog must drive customers to your website.

In Athleta’s case, they have big photos which feature the product – and actually show the entire product (which many of you still don’t do) – with minimal copy. They give the SKU number and price, but clearly, they want you to go online to see the full range of sizes, colors and styles.

In the “old days” we would have called this a retail driver – get the consumer interested, and drive them into the store. And of course, Athleta has stores, so the skeptical among you will call this catalog a retail driver as well.

In my opinion, this is different in that it is driving the consumer to the website (with no mention of stores), and goes well beyond simply having their URL at the bottom of the page, which is what most of you think qualifies as a web driver.

Plus, Athleta has the courage to show models of all shapes, sizes and age. They are selling reality.

It’s a new game with a new type of consumers and a new reality. Are you ready to play?

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

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How Much Time Do I Have?

Every new catalog CEO is asking him/herself, “How much time do I have?”

I’ve had a very busy summer and did not have a chance to get caught up on my LinkedIn notifications for about 3 months. I don’t do Twitter – I just don’t get it. I use LinkedIn extensively as a source of new subscribers for this blog and leads for Datamann. I have close to 1,200 LinkedIn contacts, so I get to see a lot of activity within the industry.

I was shocked (shocked!) at what I saw when I sat down one morning last week to clean up 3 months of notifications (job changes, anniversaries, etc.). I could not get over the number of my contacts that have left the catalog industry this summer. And I mean “completely out” – many to non-profits, many to other service industries, some to teaching. It was very eye-opening.

Most of these contacts are mid-level jobs – managers and directors. I’m sure in some instances, their company was doing poorly, and they may have been let go before they found a new job. But many of them I know came from companies that were seemingly doing okay, and they simply opted to get out. I’m sure you can all draw your own conclusions from this revelation.

But since the start of the year, I have learned of a number of CEOs who have left their positions. Since most of these individuals contacted me to let me know they are seeking new opportunities, I’m guessing their departure from their CEO position may not have been voluntary.

Each of the CEOs I know of who have “moved on to explore new opportunities” in the past 8 months were “catalog people”. They knew how catalogs worked. They may not have fit into the culture where they were, or may have made some bad choices, but they at least understood the principles of cataloging. These were not instances of bringing in an industry outsider that said “Hey, just mail the people that are going to respond”.

Let’s face it – it’s tough being the CEO of a catalog company. The pay may be great, but your job security is shaky at best. You take a job with a new company because you want to utilize all your well-earned talents to show the world that you can do this, and you can do it better than the last guy – who did not even last two years.

And then you discover a few things.

  • You work for either an owner or a Board of Directors. They see how the market is taking off this year, at least since the election. They have grown impatient with the lack of growth of sales at your company – and they don’t care about the fact that retail is hurting or that catalogs are trending down. They care about what you have done to change THIS That seems pretty reasonable. That’s what CEOs are supposed to do. The buck stops with you, so you get moving.

 

  • But at times, you feel your hands are tied by unrealistic, and unnecessary expectations. You are under pressure to acquire new customers using social media. Not because it has been proven successful by other catalogs, but because the owner’s brother-in-law read an article in Entrepreneur magazine that said it could be done, and that is the expectation hung on you. This is sort of the equivalent of car manufactures being pressured to develop electric, self-driving cars. It doesn’t matter that no one else has successfully turned a mature catalog serving aging-bohemian baby boomers into a social media powerhouse overnight. But, as unrealistic as it may be, it is the expectation.

 

  • You discover that your merchandise team has no bench strength. There is zero new product development. The buyers look at other catalogs and retailers for inspiration. They consult “color charts” for what is going to be popular this year. You learn there is no innovation in your merchandise. Worse, you discover there are no new products under development in the pipeline. The buyers rely on “manufacturing reps” to show them what to sell. This is no different than finding out that your marketing department just waits for their co-op rep to tell them what to mail.

 

  • Speaking of marketing, they are always on the search for the next “Holy Grail” of optimization, response, conversion, remarketing, etc. They cite tiny incremental gains, but have no clue about how to truly grow the business.

 

  • You have no budget for making technological changes. Your legacy order processing system was installed during the Reagan Administration. Your web platform is impossible to link to other tools. You are trying to complete with Amazon’s one-click, and your website is still asking for source codes.

 

  • You discover that there is a “deep state” in just about every department. Not the nefarious “deep state” that is rumored to exist in government, but a group of employees who resist change. It’s not that they resist you – they like you – but they don’t want to give up the “catalog way” of business. Every discussion revolves around in-home dates and paginations. You are trying to get them to think beyond the catalog, to be a true ecommerce company, but it is tough for you too because you are at heart a “cataloger”.

“How much time do I have?” is the question that most CEOs are constantly asking themselves. First, it is “How much time do I have to turn the ship around?” Then, it becomes “How much time do I have before my time here runs out?”

I don’t have simple answers on how to deal with each of the organizational issues listed above. They are all issues of the times. But if you accept a job as a new CEO, and you encounter many of these conditions, then just know you have to work even faster to turn the ship around, because in 2017, you don’t have much time.

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

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If You Were Buying A Catalog Today, What Is it Worth?

Back in late June, I wrote that “the big catalog conglomerates (BluStem/Orchard Brands, Potpourri Group, Cornerstone) keep acquiring more catalog titles because it makes their investment in efficiency even more profitable. But, you never see other catalog companies purchase online-only companies because those types of companies would not fit into their efficiency model – there is no synergy, no gains in productivity.” (Note: I wrote that before Camping World, a retailer and cataloger, acquired TheHouse.com, an online-only seller of sporting goods, so there are instances of catalogers buying online companies.)

I received an email a few weeks later from someone connected to the mergers and acquisition (M&A) industry that specializes in buying and selling catalog companies. She commented on the above quote: “That statement is somewhat correct but missing a small point we discovered as we have tried to help our clients acquire web-only businesses over the last year. They can buy a 5-9% EBITDA catalog company with a 4.5-6x earnings multiple. But, it is difficult to find a web-only business with 5-9% EBITDA and, even if you do, they go for 9-12x earnings multiple. I suspect none of the catalog private equity groups which you mentioned can fund that kind of acquisition metrics. Amazon is in an envious position with their stock price, impervious to lack of profits from their retail business.”

I’m not an M&A expert and don’t pretend to be, but let’s look at this from a few perspectives. For those of you not versed in the M&A vocabulary, let me explain a few things being said in the email sent me. A catalog with a 5% to 9% EBITDA, basically means that catalog is generating profits of between 5% to 9% of sales, which would be a very healthy catalog, especially if they had been able to maintain that level of profitability for several years. Once you start getting down below 5%, your catalog is generally not healthy, and is of little interest to being acquired by the private equity companies – unless they can get a really great deal. The buying price is “4.5 – 6X earnings”, means that if a catalog was generating $25 million in sales, and was generating 7.5% of sales as profits ($1,875,000), then the buying/selling price would range between $8,437,000 (4.5 x $1,875,000) to $11,250,000 (6 x $1,875,000).

This 4X to 6X profits multiple to determine the selling price (or value) of a catalog has been around for a while. I even checked with Jim Alexander (my mentor in many catalog related things) who confirmed for me that even in the heyday of cataloging in the 1990s, the multiple was typically 5X to 7X earnings/profits.

The second half of her email is more intriguing. She states that online-only companies have an inverse situation. Apparently not many of them are profitable, because it is difficult to find any with 5% to 9% of sales turning into profits, and when you are able to find such a company, the owners of those companies determined their value by a much higher multiple of 9X to 12X earnings.

Those of us merely on the sidelines can speculate that these online-only companies probably have an inflated view of their potential, each thinking/expecting that their business is the next Apple/Facebook/Google. Heck, they probably play foosball in the office and wear man-buns.

What do you think the reaction is when a cataloger that is in “acquisition mode” encounters one of these not-so-profitable online-only companies that thinks they are worth twice the multiple of the cataloger’s own business? Well, you can pretty much guess the reaction and comments: “Who do these guys think they are? I’ve spent 40 years in this business, building my catalog, going on endless press-approvals, countless buying trips to China, installed three generations of order processing systems, was a charter member of the DMA Catalog Council before they killed it, currently participate in 32 co-mail pools a year, helped start all 3 of the remaining co-ops with my customer file, and these guys have had a website up for four years, they don’t even know their 12-month buyer count, and they think they are more profitable than me? This is crazy!”

But, since I’m a history buff, let’s look at this from a historical perspective. Is it 1903 or 1923?   In 1903 there were 32,000 cars and trucks registered in the US, and 21 million horses. In 1903, most people would have probably thought an investment in a wagon/buggy company was a better idea than investing in a car company (although, that was the year that Henry Ford started the Ford Motor Company). In 1923, the number of cars swelled to 15 million, and the number of horses grew to 25 million.  There were probably still many in 1923 who thought that horses, buggies and wagons would never be displaced by cars. After all, the number of horses grew while the number of cars grew. A rising tide lifts all boats. Plus, all of the horse trade publications of the time featured articles on topics like “Manure Is Not Dead”, and “The Value of the Omnichannel Blacksmith”.

Sadly, for the buggy industry, 1923 was the year when the number of horses, buggies and wagons in the US began to drop, and we know how it ended. Today, there are 263 million cars and trucks on the road in the US alone, and only 3 million horses.

There is none so wise as to foresee the future or foretell how and when catalogs will end. Is 2017 equivalent to 1923? Picture yourself back then – without the knowledge of how cars would take off. You’d like to think that the 1923 version of you had the foresight to look around and say “Yeah, horses are dead. I don’t care how good a deal I can get on investing in a buggy company, cars and trucks are the way to go. And yes, I know that there have been literally hundreds of car companies that have gone out of business since 1900, but a few of these companies like General Motors, Ford, and Studebaker, look like they are going to be around a while.”  (So, you would have been 66% correct).

In my opinion, the question facing the catalog industry is not so much whether the online companies are worth a higher multiple. The question is whether catalog companies are still worth a multiple of 4X to 6X present earnings? You can see the handwriting on the wall. Consumers are migrating online and to mobile, the catalog co-op databases are dying, response rates keep trending down, and fewer and fewer catalogs are generating 5% to 10% earnings. No one can predict how much longer the industry has, but only the naïve would believe that better days are ahead. Would you invest here?

Maybe you would if there was still value in an acquisition which allowed you to roll a new catalog acquisition in with some existing brands and benefit from more efficiency. But, what to pay? The 4X to 6X earnings mantra doesn’t seem like a good ratio anymore if you know there is built in obsolescence to your acquisition.

And that is the problem I see facing the future of cataloging. The people working in those private equity firms looking for catalog companies to buy are not new to the industry. They have been doing this for a while. Like that mythical cataloger I mentioned earlier, they built this industry while building their business. They are not about to admit to obsolescence – they want the thrill of watching the order count grow on Cyber Monday. (They probably still check with the mail room to see how many mail orders came in). They just got a break from the USPS on mailing heavier books – how could that NOT be a great thing? After years of dreaming of moving the 3.4-ounce threshold up to 4 ounces, this is their moment of glory. They are going to mail more pages and not spend a minute on making their websites more effective, or adding any callouts in the catalog to drive consumers to the website. Print (just like manure in 1923) is not dead!

Meanwhile, they all remember what happened to Garden.com, and a host of other online-only companies that crashed and burned over the past 15 years. They know that Amazon had a one-in-a-million chance of surviving when it launched 20 years ago. They hang onto the last comment in the email above from the M&A analyst who wrote “Amazon is in an envious position with their stock price, impervious to lack of profits from their retail business.”  They see the irrational exuberance in the stock market as the so-called FAANG stocks – Facebook, Amazon, Apple, Netflix and Google parent Alphabet – have surged in value, while traditional retailers with real stores and real catalogs, have seen their value pounded in the market. And they think it is not only not fair, but crazy.

But that is the buyer’s perspective. What if you are the seller? You think that 9X to 12X multiple looks pretty good for those online companies. You think maybe you need to stop thinking like a cataloger and beef up your online presence.

Let’s continue this conversation….

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

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The Coming Mobile Tsunami

Let’s get this out of the way right at the start – I don’t like the word tsunami. In my day, it was a “tidal wave”.  And that is the start of our problem – some marketers just can’t accept change.

If you have been a reader of this blog for a while, you know I have never given an endorsement to a 3rd party, except for the speakers I’ve had at our annual catalog seminar, including Amy Africa, Kevin Hillstrom and Frank Oliver. I also don’t believe in citing research published by 3rd parties, especially the DMA and the Postal Service, whose data, in my opinion, is always suspect.

I’ve been asked many times by other vendors to give their product or service a plug, but that is not the purpose of this blog. I want you to think about growing your business – I don’t want to always be giving you a sales pitch, not for Datamann, and especially not for some other company.

However, I’m making an exception today. Carole Ziter, from Trigger Email Marketing, sent me some original research that I want to share. I’m doing this for three reasons:

  • I’ve known Carole since 1991, when we began serving together on the Board of the VT/NH Direct Marketing Group. Last fall, I had the honor of presenting Carole with that Group’s Lifetime Achievement Award.
  • Carole and her husband Tom have helped me a number of times in my career with answers to direct marketing problems, which is what her research is about today.
  • Carole is a direct marketer at heart, owning her own catalog for many years, and now co-owning an internet service company. She is always thinking about driving response.

That bears repeating. For the almost 30 years I’ve known Carole, she is one of the most passionate people I know with regards to a love for direct marketing and getting someone to respond to an offer. With Carole, it’s not about a catalog or an email – it’s about getting a customer to respond.

Carole sees what’s coming and from her perspective, it’s a Mobile Tsunami. Unless you are one of those rare catalogs whose consumers are over 75, your customers are going to continue migrating to their phone to shop from you. If your target audience is 35, you already know this.

This spring, Carole’s company tracked 500 major catalog and ecommerce companies on one thing – did they have cross-device shopping carts, meaning if I put something into my cart while on my laptop, will it show up in the cart when I access the cart on my phone?

Below are the results of that research:

  • Of the companies tracked, 44% did not send a single email within their 3-week test period;
  • 60% had no abandoned cart recovery program – many of them well-established brands;
  • Of the companies with abandoned cart recovery programs, 39% sent a single autoresponder and 22% sent just 2 reminders, and 54% do not rebuild their carts across all devices.

Carole then took this a step further, and analyzed the cross-device shopping cart abilities of sixty of the companies that attended the Datamann catalog seminar in March. This was her process: Email subscriptions were completed via desktop when possible; a single item was placed in a shopping cart and abandoned via desktop; abandoned cart emails received were opened via phone; Return to Cart buttons were clicked via a phone to verify the presence of a cross-device feature.

Of the 60 companies Carole reviewed, only 29 (48%) had abandoned cart recovery programs. Of those 29, only 11 companies (18% of the total) had some form of a cross-device cart saver program.

One of the reasons I don’t write about these types of programs is that I feel that 90% are common-sense things that you should be aware of and should already be doing. Amy Africa was speaking about the need for abandoned cart email programs more than 10 years ago. Of course, Amy’s ideal was to start emailing consumers within 3 seconds of their leaving your site, but still, the concept has been around for a while, and has been proven to work. Plus, it’s not like the competition is getting any easier and that your response rates could not use a boost. So, it always comes as a bit of shock to see that companies are not doing some of the basics.

(Part of Carole’s research also tracked basic check-out procedures, and I was further shocked at the number of companies that still don’t have a Guest checkout. Why don’t you just tell customers right up front to go to Amazon?)

On the other hand, what is considered a “basic marketing technique” to one mailer is an extra hurdle to other mailers. There are literally hundreds of additional programs, services, products and methods that you are constantly being sold, and of which you are told that failure to implement each one will spell instant doom for your company.  Plus, there are ten different versions of each of these services from different vendors. You don’t have the time, staff or resources to do all of these things that you are told you should. You have scarce resources which you are struggling to manage.

But, as you get ready to go into this fall/holiday season, having a shopping cart that can be viewed across multiple devices seems to me to be one of those standard customer expectations similar to an 800# twenty years ago. You can’t compete with Amazon on many levels. But one thing which Amazon has perfected is convenience and speed. They don’t have a beautiful design, nor many digital bells and whistles. It is all about being efficient in getting your order. Keep that principle in mind as you think about your website this year. Get with it. (And if you want help, contact Carole by going to the Trigger Email Marketing website).

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

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Mid-Summer 2017 Catalog Observations

It’s the end of July, and you’ve almost finished paginating your Holiday catalog. It’s not going to mail for another two, maybe three months, and there are not many changes you can make to it now.

That’s ok, because it isn’t your catalog which you should be changing. It’s your website that you need to work on.

Beyond The Upsell:

When I worked at Brookstone in the 1990s, we spent a lot of time coming up with just the right products for our “telephone upsell” list. You have to remember, this was before the internet, when 50% of our orders came in over the phone. At the end of the order, the CSR would ask the customer if they wanted to hear our list of daily specials, which always included a quart of maple syrup. We argued endlessly over what was the best way to spiff the CSRs for the upsell effort. We argued whether the “specials” should be good products, or overstocks we were trying to get rid of.

Most of you have adopted a variation of upsells on your website with features such as “Customers who bought this product, also liked these products….”

There is nothing special in the list below from FineArtAmerica.com. They take the basic product I was searching for (a poster of Napoleon Crossing the Alps), and show it to me in a variety of options such as a canvas painting, acrylic print, etc. In 2017, you expect different options like this for a poster/print/photo.

But further down, you can see they offer this image of Napoleon as a shower curtain, pillow, phone case, coffee mug.

Lots of you with gift catalogs spend an inordinate amount of time finding/developing new products with witty sayings, or cute images, like a smiling cat, or a mug that says “You Are An Amazing Woman”. But you squander the opportunity to really drive sales for that product because you think only in terms of ONE option for that product.

I hear many of you that sell products which are “nice to have” complain that you depend on consumers looking through your catalog to “discover” all the great new products you have. The future of catalog/ecommerce is going to belong to the companies who can capitalize on taking a great product, and turning it into 100 different options. Consumers will shop the sites where they know they have the most options. That’s why I love Cafe Press – contrary to what catalogers tell me – that “no one browses a gift website!”, I do browse their site (where else can you get a “Nixon in 2020” t-shirt?).

If you are a gift cataloger, stop thinking so one-dimensionally about your products, and think about how you can turn that great new t-shirt with the Walt Whitman quote into a phone case too.

Not In 100 Years:

Is this good catalog upselling, or foolishness? I spotted the item below in the Garrett Wade catalog, and then checked it out on the website. It’s a standard kerosene lantern. I have similar lanterns that have been in my family for more than 100 years, and which I have used repeatedly every summer for the past 50+ years. In all that time, I have never had to replace a wick.  But, Garrett Wade offers 10 replacement wicks for $5.95. Unless you were living in a bunker, and needed to use this lantern pretty much 24 hours a day, I can’t see why you would ever need so many replacement wicks.

Was this just great upselling on the part of the merchant? ($5.95 for 10 wicks is actually a good deal). Was the merchant hoping that the average person buying a kerosene lamp would not know that they didn’t need that many wicks? Or did the buyer himself not know that?

I’m not going to give Garrett Wade too much grief on this, as they do something that most of you don’t do, which is an absolute missed opportunity for you. Right below the offer for the lamps above, they have a link to a video on how to use the lamp. (Ok, maybe if you don’t know how to use a kerosene lamp, you might think you do need 10 replacement wicks).

The video is 1 minute long, I can tell it was not “professionally” produced, but it shows the product in use, and is actually pretty good! It sits right on the Garrett Wade website, so doesn’t send me off to YouTube to watch. Why aren’t the rest of you producing similar videos to showcase your products? Think about how much time people watch videos on their phones – video enhances the sale. You are too concerned about “getting it right”, or that fact that it will look “homemade”. So what? It helps sell.

My only concern with this particular video is that it fails to do any selling – while the guy is filling the tank, he could be telling the viewer how well built it is, that it won’t rust, it will last 100 years, etc.  Consumers still need to be sold. Don’t squander the opportunity. Always Be Selling!

As My Mother Would Have Said – “What Gall!”

I love my local daily newspaper (The Keene NH Sentinel). But over the 30 years I have been a subscriber, the paper has announced a number of “editorial” changes, which you could tell were only meant to keep the presses rolling. A few years ago, they announced they would no longer devote as much space to national and international news. Then sports reporting was cut back, and of course like all newspapers, there are no longer any classified ads in the back.

The kicker came this week via a letter they sent to all subscribers announcing a price increase coming this fall. The best part was this statement: “Due to the size of our premium Thanksgiving edition, there will be a $1 surcharge for this Premium Edition”.

This “Premium” Thanksgiving issue, which actually comes out the day before because the paper does not print on Thanksgiving, is all ads and FSIs. Sure, there are a few extra articles on alternate ways to cook a turkey, or the joys of a vegan Thanksgiving, but beyond that, it is all ads. So, for the pleasure of getting a ton of print ads for which the newspaper is already being paid, my newspaper is now going to charge me $1 extra. What gall!

But, hold on! Can that concept be applied to your catalog? Most catalogs have always had a vendor co-op program where you charge vendors a token amount for appearing in the catalog. What if you took that concept further and charged the vendor the full cost of appearing in the catalog? What if you paid for the entire catalog this way? I know many of you are thinking “Bill has no idea how hard this would be”, or “that won’t work for apparel catalogs”.

Don’t think in terms of 64 pages. Think in terms of 8 pages. What if you got an eight-page catalog completely paid for by a vendor(s)? You could prospect pretty deep if the marketing cost was $0. And, think about this – just as you are getting hammered by Amazon, many of your vendors are feeling the pain of all the retail store closings. They are looking for new markets, and may very well be receptive to helping you, if you grant them exclusivity, or if you agree to promote a new line which they are testing.

Oh, I know – you can’t do this because it would interrupt the flow of catalogs you already have, and potentially cannibalize sales from your Holiday 2 drop. Stop thinking that way. Think in terms of using a vendor-paid-for mail piece as a way to drive consumers to your website. The more baited hooks you have in the water, the more you will catch.

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

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