The internet did not kill the catalog, as many in retail feared.
While catalog mailings have dropped from the peak of 20 billion mailed in 2006 to 13.3 billion in 2013, they still remain very effective marketing tools.
“The catalog still works,” said Hamilton Davison, president of the American Catalog Mailers Association. “You can’t make me download the app. You can’t make me open the e-mail. But most people will look at the catalog that comes in the mail.”
According to the ACMA, 50 percent of all Americans make purchases based on catalogs they receive. Davis stated that people still value catalogs. “You can romance me. You can tell me a story. You can invite me in,” said Davis. “It’s a great medium for showing depth, color and texture.”
Duluth Holdings wrote in its latest 2015 annual report, “our catalogs accounted for approximately 21 percent of our direct segment net sales, which were transacted via our call center, and sales through this channel continue to grow year over year.” The apparel brand said that the catalogs serve as a “tangible vehicle for our authentic and humorous storytelling and drive customers to visit our Web site and retail stores.”
Mindy Grossman, chief executive officer of HSN Inc. said, “It continues to be a very important engagement vehicle.” HSN produces the apparel catalogs Garnet Hill, Travelsmith and Chasing Fireflies. Grossman said, “We’ve been saying for the longest time that we’re really a content business. They aren’t just a selling vehicle. We use it to tell stories.”
With production and postage the biggest cost, Grossman has learned to maximize the production effort of the catalog. “While we’re shooting for the catalog, we shoot video to include it in the blog and get stories for content. We’re able to use all these assets. We can do so much with it.”
HSN also does a lot with the data it collects. Grossman said that it has a database, along with its Cornerstone brands that numbers 60 million. That allows the company to change formats including the size of the book and the frequency of the mailings. “We have so much information on our customer, by location, by demographic, where they go, what they do,” said Grossman.
Another sign that catalogs aren’t dead and may even be staging a comeback is that some retailers are issuing their first-ever pieces. Claire’s Stores launched a 116-page holiday catalog in November and said during its fourth-quarter earnings call that the return on investment was good. “We might deploy this profitable sale and communication channel again,” said Beatrice Lafon, Claire’s chief executive officer.
Lands’ End chief executive officer Federica Marchionni said during the latest fourth-quarter earnings conference call that its catalog is a key area of focus, even though it reduced circulation. The brand plans to rebuild circulation in the second and third quarters as it targets active catalog customers. As evidence of the importance of catalogs to sales, Lands’ End said that the decline in U.S. revenue in the fourth quarter reflected a reduction in the catalog circulation. The company plans on more products in its catalogs that can be used year round and is driving catalog productivity.
J.C. Penney also found that its sales were hurt when it discontinued its catalog. It was brought back last year and the company had a great response. Myron E. Ullman 3rd said, “We’re not going back to the 1,000-page-several-times-a-year book. That’s frankly, with paper and postage, not a good proposition and frankly that’s not the way the customer wants to shop.” Penney’s was so pleased, it added a home catalog.
Hamilton Davis of the ACMA believes that the U.S. Postal Service deserves some blame for the decline in catalogs from the peak levels. He said that print costs are down and paper costs are down, but postage isn’t and that represents over 60 percent of the catalog cost. However, Katina Fields, a spokesperson for the USPS said that since May 2015, the standard flat rate that most catalog mailers use has dropped by about 7 percent.
Retailers admit the costs are high to produce a catalog, but at the end of the day — they work. People like flipping though the catalogs and while they may not phone in a purchase, it’s likely the catalog is leading to an online sale.