Shop Yellow to Drop Co-op Catalog

Jul 25, 2007 3:31 AM  By

Matt Jackson is betting that you have a copy of the Yellow Pages sitting next to your home phone—and that you use it on a regular basis. Jackson doesn’t work for the phone book company, although he used to; he’s president of Shop Yellow—a new co-op catalog that will be bound into the Verizon Yellow Pages directory.

Shop Yellow will run 500,000 trial copies of the 32-page book selling products from eight to ten merchants ranging from jewelry and electronics to children’s products and food. Jackson would not disclose specific merchants signed on for the venture. The catalog will be printed on magazine-grade paper and bound into the front section of the Yellow Pages in six Mid-Atlantic regions: Chesapeake/Virginia Beach and Suffolk, VA, and Phoenixville, Pottstown, Norristown, and Landsdale, PA.

Jackson says he chose the suburban areas surrounding Norfolk, VA and Philadelphia because residents in nonurban markets traditionally use the Yellow Pages more frequently than their urban counterparts. The new edition of the Verizon Yellow Pages is slated to arrive on residents’ doorsteps September through November. The Shop Yellow catalog “will look a lot different and stand out from the Yellow Pages themselves,” says Jackson. “That’s key for us, because even though it will be in the Yellow Pages medium, we need to stand out and be high quality.”

Shop Yellow will charge vendors on a pay-for-performance model in which participating merchants pay 17.6% commission plus all credit card processing fees per order with a minimum commission of $6 per order. Merchants don’t pay upfront costs during the trial, says Jackson, but he anticipates charging a nominal fee of about $0.03 per copy for printing and distribution during the full rollout slated for 2008.

The co-op will take all orders through a call center and Website and process credit card charges before passing the order along to the vendor for fulfillment. Once the order is completed, Shop Yellow will reimburse the merchant for the purchase, less its commission and credit card fees. Marketers and Shop Yellow will share customer names. Jackson is predicting conversion rates of 1.5% over the life of the catalog; the expected average order value is $75-$100.

Jackson has the green light from the Verizon to expand Shop Yellow’s page count as much as he wishes, which will ideally be 200 pages. A full rollout edition is planned for next summer and will place 10 million to 20 million copies of the catalog in homes in time for the 2008 holiday shopping season. Jackson is also considering testing a European version of Shop Yellow for Christmas 2008–provided the U.S. version has a smooth test and rollout.