Understanding the Relationship Between Catalogs and Web Buying

How do you know that a Web-buying household placed an order just because they received a catalog?

The argument has been made that just because a web buyer gets a catalog and then later places an order, that purchase doesn’t prove that the catalog circulation caused the web purchase. There are ways to answer whether receiving catalogs causes the Web orders.

Say you mailed to 100,000 web-buying households out of the 140,000,000 households in America. If you mailed to 1/10th of 1% of the households in America and 50% to 95% of the orders came from those households that alone seems to be a pretty strong link. But all you’ve really proven is the other 139,900,000 households aren’t very responsive to ordering your merchandise through the Web.

You can test incremental sales through a split test. Half the households receive a catalog and half the households receive no mail from you. Measure the differences in sales. Even the households that don’t get a catalog will show some sales. Measuring the incremental sales is the key. Mail versus no-mail tests show those differences in sales between the households getting catalogs and those not getting catalogs. This is the strongest measure of the sales that are truly driven by your catalog.

You may offer gift codes or promotional codes and measure how many you capture in the shopping cart. This can provide useful data, especially about the proportional performance of different list segments. However at least 50% of catalog customers fail to use gift codes or promotional codes and so this technique is not reliable as a measure of all the Web sales being driven by a catalog.

Don’t forget the “halo” effect of the incremental sales you’ll get from households that were not mailed your catalog but had the catalog passed along to them through family, friends or at work. The “halo” effect of sending out a million catalogs are sales that should properly be credited to a catalog mailing even if they are received through the web…. and can never be measured by matching back orders to the original mail file.

Jim Coogan is president of Sante Fe, NM-based catalog consultancy Catalog Marketing Economics.

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