More channels, more challenges

Jun 01, 1998 9:30 PM  By

For the past 10 years, change has been the norm in cataloging, fueled by seasoned marketers, technological innovations, and increasingly demanding customers. n That’s why looking into the future of cataloging-even just three years ahead-is an awesome and rather daunting task. But like it or not, the future is coming, and we must be prepared to market for the millennium. In some ways, our jobs will be easier, thanks to technological innovations. But for the most part, being a cataloger in the 21st century will be more challenging than we dreamed.

While I don’t have a crystal ball, I have a few ideas as to what’s in the cards for catalogers as far as marketing and circulation trends. So buckle your seat belt, and hang on!

Wired workplaces, Web homes Electronic commerce is perhaps the most talked-about and complex aspect of business for catalogers. A must for most b-to-b companies, the Internet is becoming a fertile lead generation area for consumer mailers too.

And while the paper catalog is unlikely to go away by 2001, the Internet is fast becoming a more dominant and flexible method of communicating with customers. Virtually every business will be ‘Net-connected by 2001, and the majority of mid-income and upscale households will also have access to the Web. If you’re not already on the Web, start testing now or risk losing out.

International commerce In the “world is shrinking” category, catalog commerce will continue to lose geographical boundaries. The Internet has helped tremendously, as have improvements in the support services vital to selling internationally.

But beware: In addition to more customers and increased sales, international catalog selling also brings a number of potential difficulties that will need to be addressed, such as:

* operational implications, from mailing catalogs to delivering parcels

* international 800 numbers

* ordering and paying over the Web

* credit card options

* tracking the delivery of goods

* returns handling and cancellation of international orders

* language differences in printing and ordering from the catalog

* accommodation of different currencies, taxes, and laws.

These are just a few areas of international catalog marketing that you need to watch out for. But just as with the Internet, if you’re testing overseas markets now, you’re better positioned to succeed in the future.

Retail competitors If or when retailers wake up to the advantages of letting customers decide when, where, and how they want to shop, we’ll see a tidal wave of catalog activity from store-based businesses. Retailers have long ignored the concept of a database, except for revolving charge card billing.

But smart retailers, such as apparel marketers Eddie Bauer and Talbots, have brought together marketing and promotional synergy in the cross-fertilization of store, catalog, and customer loyalty efforts. We should see more of this trend in the future

It’s not just the “big guys” with hundreds of stores that will make the most of their databases by launching catalogs, however. These strategies are applicable to any company that has the foresight to use them to open and expand customers’ buying options.

Business-to-business cataloging According to the latest Direct Marketing Association study conducted by The WEFA Group, the b-to-b marketing channel is expected to grow 7.3% a year through 2001-a rate noticeably faster than that of consumer cataloging and overall business-to-business sales. Expect to see more disintermediation-the elimination of the traditional middlemen or distributors in the selling process. Catalogers of 2001 will be selling more directly to end users than ever imagined 10 years ago.

Marketing and circulation In discussing the expanded use of databases in catalog marketing, most mailers will say, “Been there, already doing that.” But we’ve seen just the proverbial tip of the database marketing iceberg, with much more to come. While segmentation, modeling, and lifetime value have been around for decades, technology now enables us to marry customer segmentation techniques to laser technology, digital printing, and electronic binding to bring about greater personalization and versioning of catalogs, covers, and even inside spreads for individuals or small groups of buyers.

Such database applications create fantastic marketing opportunities. For example, retailers with multiple stores can use the technology to display addresses, phone numbers, and even the names of key department managers. Moreover, database improvements will give merchandisers the ability to tailor product offerings for precise groups of “proven buyers.” If you think such database sophistication is future fantasy, you’re wrong: The technology is here today.

The importance of alternative media Despite the start of the consolidation of the list industry, which many expect to continue, we’re not about to hear the death knell for list brokers and managers. But if we look at customer acquisition from the consumers’ point of view, they are sending the catalog industry a message: “We don’t want unasked-for catalogs”-a notion supported by several recent research studies.

Mailers are going to have to find alternative methods of getting people to ask for catalogs, instead of trying to shove the catalogs down their throats. Among the many prospecting options that seem to be growing in popularity:

* the Internet

* catalog referral programs (such as “friend-get-a-friend” promotions)

* the lost art of public relations

* space advertising (magazine, newspaper, free-standing inserts, trades)

* cooperative mailers

* catalogs of catalogs, such as Shop at Home

* trade shows

* card decks

* credit card and billing inserts

* package insert programs

* outbound telemarketing

Without question, using alternative media is an area for catalog innovation and creativity that will grow in importance in the next five years.

Brand equity and brand loyalty We used to give brand development such names as niche marketing, competitive differentiation, and unique positioning. Whatever you call it, every direct marketer and cataloger should strive to develop a brand.

For catalogers, branding means using merchandise and promotions to create an exclusivity so that customers will want to keep coming back. We all know the catalogs that can be identified as brands-Lands’ End, L.L. Bean, The Pleasant Co. The challenge for every new, small, and midsize cataloger is to strive for that “top of mind” name recognition that these brand mailers have established and continue to support and defend.

Customer loyalty Closely related to building brand equity and brand loyalty is building customer loyalty. Cataloging is not about landing a one-time sale, though we sometimes promote and market offers as if it were. Don’t forget that we’re in business to keep buyers coming back to buy more from us.

Building customer loyalty will become a major catalog initiative. Most catalogers already have the tools-a strong prospect and customer database, good tracking of mailings, a solid promotional team to create and test offers, and printers and mail houses that can get the catalog to the right person at the proper time.

You’ll want to create a relationship that combines building faith, trust, and service to meet all the needs of your customer. Doing so might include frequent buyer clubs and comarketing with service providers such as telephone companies, airlines, and hotel chains.

Do it better, faster, cheaper! Within the next five years, more mailers will push to use new technology such as digital photography, direct-to-plate printing, laser printing technology, and many still-to-come techniques to improve the production time and reduce the cost of each book.

Adding an electronic catalog, whether a CD-ROM or an Internet-based format, will add challenges in photography, in the storing and multiple use of images, and in the production of catalog pages. As we see postage and printing increases (and we will), maintaining and improving catalog quality while reducing the costs in the mail will become a high priority.

Multiple-channel marketing By 2001, we will have entered an era of marketing in which traditional channels-retail, mail order, distributor, electronic-are less distinct. Marketing and promotion efforts within every shopping medium will let buyers decide how they wish to connect with a company.

For instance, retailers will no longer stipulate that customers can shop only during store hours. Instead, customers will be able to shop by phone or fax 24 hours a day and via the Internet from their offices, their homes, and trains. Orders may come in at any time, from any place on the globe, via a variety of media. And the great marketers won’t flinch in giving top customer service and fulfillment.

Our ever-changing business will challenge every aspect of our merchandising, creative, marketing, database, and operational beings in the next five years. To survive and prosper in the 21st century, now is the time to start building the infrastructure. Good future cataloging!