Think the era of cataloging has passed? Think again
In a “Trends” column for the preview issue of Catalog Age back in 1983, I observed: “What an appropriate name: Catalog Age. Marketing has definitely entered the age of the catalog.” If you were to simply go by the amount of editorial space in today’s newspapers and magazines devoted to e-commerce, you might be led to believe that the Catalog Age has passed. But check your mailbox. Therein lies the evidence we’re still in the Catalog Age.
The Catalog Age really didn’t get its start until well into the latter half of the 20th century. Prior to then, the industry was dominated by “big books,” or the general merchandise catalogs. They began in 1872 when Aaron Montgomery Ward worked out an arrangement with the National Grange — America’s largest farming organization — to offer 163 items of merchandise under the title “The Original Wholesale Grange Supply House.”
Ward’s catalog was soon followed by one published by Richard Warren Sears, who in 1886 began a mail order business selling watches. A year later he moved to Chicago and with Alvah C. Roebuck, founded Sears, Roebuck and Co. The Sears catalog rapidly grew and featured more than 6,000 items (on more than 700 pages) by the turn of the century.
The early Ward’s and Sears catalogs were so popular in rural America, they were often called “the farmer’s bibles.” But there was a negative side, too. Just as small-town merchants of today lash out at Wal-Mart, the local merchants of yesterday hurled stones at Chicago’s mail order companies, which they felt were “stealing” their business.
Nevertheless, Ward’s and Sears prospered and were shortly joined by three other general catalogs — Spiegel, Alden’s, and National Bellas-Hess. Together, the Big Five accounted for as much as 90% of all U.S. catalog sales through the first half of the 20th century.
Several trends contributed to the growth of mail order. Most important, perhaps, was the tremendous growth in the number of women working outside their homes. Normal shopping hours were spent in the workplace, making it inconvenient to shop in traditional ways. But a catalog provided a “store” that was open 24 hours a day, 365 days a year.
The growth of white-collar households after World War II, meanwhile, led to the growth of specialty catalogs. Most of the big books targeted blue-collar households. These general merchandisers lost sales to the thousands of specialty catalogs that began filling U.S. mailboxes, and one by one the Big Five bit the dust.
Soon the only Big Five cataloger remaining was Spiegel, and it had new positioning. When Hank Johnson took over Spiegel in 1976, he recognized the decline of the blue-collar market and saw the huge increase in the number of working women. So out went Spiegel’s pages of tools and automobile tires, and in came pages devoted to fashions and household accessories. Meanwhile, a relative newcomer to the big-book field — retailer J.C. Penney — grabbed onto what was left of the general mail order market.
Penney’s entrance into the catalog field in the 1960s was representative of another midcentury trend: the growing interest of retailers in expansion through mail order. But while that trend accelerated year by year, there were more examples of failure than of success.
The biggest problem was that retailers often didn’t understand the difference between retailing and direct marketing. For one, the key players on a catalog team were not the product buyers, but the merchandisers — those responsible for figuring out how to present products to an audience that wouldn’t be able to touch it before deciding whether to buy it.
And if retail merchandise didn’t sell well at first, retailers could change prices, feature it in a window display, or run ads. But in cataloging, marketers had to decide on a specific price point up front as well as determine whether an item could be adequately illustrated with a single catalog photograph and described in a minimum number of words.
Despite such challenges, however, specialty catalogs continued to thrive, thanks in part to three developments:
Credit cards The advent of bank cards in the 1960s enabled smaller catalogers to provide credit to customers. This increased the market base — and profit margins, since credit orders were typically larger than cash or COD orders.
WATS numbers Toll-free telephone numbers in the ’70s further simplified catalog ordering.
Computers Once direct marketers learned to use computers, the whole world of cataloging changed, thanks to more refined list selection. With computers, it became practical to eliminate vast quantities of unproductive names and concentrate on true prospects.
Then along came the Internet…
Shortly after the Internet arrived in the 1990s, futurists began predicting that the Web would kill the printed catalog. It was not unlike predictions that television would be the death knell for printed magazines. Of course, not only did magazines survive, but before long the magazine with the largest circulation was TV Guide.
Computers and the Internet have not yet killed off printed catalogs. In fact, many of the Internet start-ups have created printed catalogs to expand their business.
As a charter member of the board of directors of television shopping corporation QVC Network, I observed the vast difference between the highly interactive, technical future that pundits were predicting and what the public wanted. QVC founder Joe Segel recognized that TV shopping had to be simple. Just turn on a TV set and dial a telephone. No complicated keypads, no special buttons to push, no computer or modem to install. By combining direct marketing basics with new technology, Segel built QVC into a multibillion-dollar business.
Perhaps the major direct marketing lesson many dot-com companies have failed to learn is the importance of the back end — order processing, fulfillment, customer service, warehousing, and inventory control. Then there’s also a matter of long-range planning. A catalog business requires more than the usual amount of planning. The all-important statistic is the lifetime value of a customer. You invest to convert a prospect into a first-time customer, and you make your profits by reselling that customer through future mailings. It may take a year or more to win back those dollars invested to bring a customer into the fold and generate satisfactory profits.
Let’s not overlook b-to-b
To this point we’ve been discussing consumer catalogs. But business-to-business catalogs have also grown by leaps and bounds. And their importance to the world of commerce has increased proportionately.
While many of the same factors that affected consumer cataloging also played a role in the development of business catalogs, two additional factors have had substantial impact:
Increased cost of person-to-person selling At one time, most b-to-b selling was done face to face via salesmen. But as the cost of a sales call increased, many b-to-bers found it more profitable to mail catalogs and use the telephone to sell.
Death of the “old boy” network For years, b-to-b sales were supported by a network of men selling to other men. But as more women entered the work force, the “old boy” network fell out of favor; women were also more accustomed to buying via catalog.
I don’t question that more commerce will be done via the Internet in the years to come. But don’t expect a sudden decline in the number of catalogs in your mailbox. They will continue to be the foundation of successful direct marketers for years to come…and we may even see more of dot-coms mailing print catalogs as they strive to make a profit in this increasingly complicated day and age. It’s still the Catalog Age.
Richard S. Hodgson is president of Sargeant House, a Westtown, PA-based catalog consulting firm.