The Internet may someday supplant the need for a print catalog, but that day is a long way off, according to Tim Ford, president of Chicago-based auto parts cataloger J.C. Whitney. Speaking at the ACC’s Power Forum on Monday, Ford said, “For now, our business is driven by the catalog.”
The ever-changing role of print in a multichannel marketing strategy was a key topic of yesterday’s Power Forum. Moderated by Catalog Age editorial director Sherry Chiger and Haggin Marketing’s Mark Swedlund, the forum panel featured, in addition to Ford, Eric Faintreny, CEO of multititle consumer mailer Brylane; Barry Gilbert, CEO of gardening products cataloger/retailer Smith & Hawken; and Fred Neil, vice president of strategic marketing for computer reseller CDW.
Around 40% of J.C. Whitney’s revenue comes from its Internet-based marketing, Ford said, with affiliate marketing generating 7%-8% of these sales. The cataloger manages around 1,000 affiliates. “They serve as outside sales reps for us,” Ford said. The costs associated with affiliate marketing and paid-for search make up around 10% of J.C. Whitney’s marketing budget.
The company sent 100 million e-mails out last year, but Ford said it has not yet made a full-fledged effort to use e-mail as a promotional vehicle. “We’re just scratching the surface,” he said of Whitney’s use of e-mail marketing.
Faintreny estimated that 25% of New York-based Brylane’s sales come via the Web. “It’s not a magical solution,” said Faintreny of the Internet. “The challenge is on improving integration.”
For his part, Neil said the Internet has become a large part of CDW’s product research efforts. It regularly compares online vs. offline response to merchandise.
Gilbert explained that Novato, CA-based Smith & Hawken had been relatively slow to expand into online marketing. His company’s customers tend to be older, less Web-savvy baby boomers. “It’s most important for our customers to be able to pick up the phone,” said Gilbert of the old-school ordering preferences of many of the company’s shoppers.
Though Smith & Hawken started as a catalog-only marketer, today it is probably better known as a retailer. Yet Gilbert received the biggest laugh of the session when asked his advice to catalogers looking to expand into retail. “I would pause,” he said. “Have a drink.” He emphasized that retail is perhaps even more competitive than direct marketing, given that the U.S. is “overstored.”
Ford added that the differences between retail and direct marketing are myriad. What convinces a prospect to open a catalog, he said, is different from what convinces a shopper to enter a store.
The panelists were no more bullish on expanding overseas. Faintreny, a European himself, said that if a company doesn’t already have a good foundation domestically, it has little hope of succeeding abroad. “We can become global with direct marketing, but to be global, you need to already be on strong ground,” he said.
Selling overseas is “a very tough way to make a buck,” Gilbert agreed. “We have such a big market in the U.S. that if you can’t make a couple billion here, you won’t be able to make it anywhere else.”
Neil recommended that catalogers who want to try their hand at selling overseas partner with a local company, to help them find a culturally aware merchandising strategy as well as deal with legislative and financial issues such as duties.
Indeed, the major challenge of marketing to an overseas audience is understanding the people the cataloger will be selling to, Ford said: “We have a hard enough time understanding all the cultures in the U.S.”