As we enter a new decade, it’s easy to assume that, in the height of this digital age, traditional approaches to retail have been rendered irrelevant. But with the industry facing increasing challenges, including the mounting threat of a post-holiday “retail vortex,” there are lessons to be learned from the conventional models of yesteryear — particularly catalogue retail.
We are experiencing a surge of direct-to-consumer brands and digital-native pure plays deploying catalogues to cut through the online marketing noise to engage their new-found audiences. Even Amazon is on board with the release of its second-holiday toy catalogue that linked directly to its online store through QR codes. Meanwhile, brands founded in catalogue retail are revamping their direct mail offerings for today’s consumers.
Therefore, instead of discounting catalogues as relics of the past destined for the recycle bin, here are four lessons the retailers of the 2020s should take from this established marketing mindset.
Build an emotional connection
Direct mail is an effective method of connecting emotionally with audiences. The tactile experience of turning catalogue pages engages consumers in a way that is challenging to re-create digitally. The focus on imagery is captivating, particularly during peak trading periods like the holidays when lifestyle photos can inspire purchases.
Perusing a printed catalogue takes the consumer on a journey of inspiration and discovery, giving brands the ability to visually communicate their story. This “experience” is something retailers must aim to replicate across all customer interactions. Retailers, such as Nordstrom, are offering fashion tips and looks created by stylists in their retail apps, with the hopes of delivering a more personal and enhanced user experience. Replicating this type of strategy — which goes beyond simply fulfilling a purchase — is the goal that differentiated brands are looking to successfully achieve. And, that takes more than just offering deep promotions on Black Friday or Cyber Monday.
Embrace data for increased efficiency
The mass production and distribution of catalogues, like most forms of marketing, can be expensive. Great cataloguers, therefore, know to use data and insight to forecast which customers will generate the most profit to deliver the greatest ROI. While data insights are invaluable, response modeling and cost modeling of catalogue development and delivery is also fundamental to this approach. Catalogue shoppers tend to transition to brand loyalists. So, taking the time to really comprehend your brand’s unique offering in the market can solidify the relationship with those who will most likely spend more in a year — or over a customer’s “lifetime” — and are worth investing in for long-term profitability.
The same can be true for online retailers. By taking a data-driven, customer value-focused approach and creating strategies that are aimed at the cohorts most likely to engage with a specific campaign — or those that have indicated propensity to buy, rather than relying on more traditional targeting techniques, such as demographics — retailers can reduce costs, thus optimizing their marketing efforts.
Amazon’s holiday toy catalogue, for example, is customized based on children’s age groups and the TV shows they view. Customer data can help illuminate the specific times of year the catalogues will generate the greatest impact, often focusing on key holidays or life-moments that drive spending — such as moving to a new house or having children. Data and richly calculated insight ultimately drive efficiency by determining who gets which version of a catalogue and when.
Having access to holistic data from across the business is table stakes for digitally agile businesses. But the value of collecting and analyzing all this data truly materializes when the insights generated lead to an organization becoming more efficient at marketing and optimizing campaigns. If the present is any indication of the future, successful retailers will be able to apply data at speed and review daily — or even hourly — using advanced prescriptive technologies powered by artificial intelligence and machine learning to stay on top of evolving consumer behaviors. They will be able to maximize the value of their reaction times and forecast, plan and buy in accordance with their customers’ true needs.
Maximize product visibility
Shoppers won’t necessarily scroll past the first page of search results when looking for products online, but when browsing a catalogue, they will flick through multiple pages, if not the entire book. This gives retailers the opportunity to showcase new or different product offerings to consumers who would otherwise have missed them.
Great brands have always brought cross-selling and product pairings to life in catalogues because it is the ideal medium for displaying related products together. For example, it could be as simple as showing which shoes work well with an evening dress, or which bag would complement a winter coat. This can work just as powerfully online when retailers use browsing and purchase data to uncover and make use of less obvious connections. Perhaps they might discover people who search for a timepiece with a leather strap are more likely to buy chukka boots or those that buy one-piece swimsuits are also fans of radiant eye cream.
By taking the lead from catalogue brands and using data to discover which products consumers seek out, view and ultimately buy, retailers can improve product placement, pairing and recommendations across all channels to ensure increased visibility and maximum performance.
A good example was demonstrated by one of our customers, a homewares retailer of unique gift and decor that mails more than 20 million catalogues to its highly curated customer base each year. This retailer discovered valuable customer insight when AI-driven analytics identified that customers purchasing cleaning and laundry products were 250 percent more likely to also purchase storage and organization items. The merchandising and marketing teams then used the insight to improve cross-merchandising across all channels — including its catalogue.
Continually test and optimize
Catalogue brands carefully curate an assortment of products within their printed pages, but they don’t stop there. Making “gut” assumptions about what shoppers will like and what they will buy can be costly, so brands often test their catalogues on small focus groups. This way they can understand what is working and what isn’t before they commit to expensive print runs and postage.
Consumers act in unpredictable ways and trends change quickly, so regular in-flight testing and a deep understanding of product demand is vital for retailers to remain profitable. In an analog-only world, a catalogue is tested and then delivered. In a digitally enhanced world, the catalogue can be fluid, adapting to the context and movements of the consumer. Are they online, on a mobile device, near a store, or in the store? By analyzing demand, retailers can also determine which products are at risk of running out-of-stock and the subsequent impact on profit, enabling them to take the necessary swift action. Regular testing and flexible inventory management is essential to reducing wasted spend, unsold stock and unhappy customers.
What’s more, insight gained from testing in one channel can be used to optimize another. Perhaps surprisingly, e-commerce can act as a test run for in-store sales, giving retailers the information they need to understand how best to merchandise and stock their brick-and-mortar stores.
Ultimately, it would be shortsighted for retailers to assume catalogue shopping is an antiquated format of the past. There are many lessons that brands can learn and apply to the current retail environment, and perhaps a catalogue mindset of inspiration, emotion, experience and deep insight will empower the future of our retail industry.
John Squire is the chief executive officer of DynamicAction.