Understanding the Impact of Catalogs on Retail Sales

Dec 22, 2008 8:57 PM  By

If you are a multichannel marketer who is managing retail stores, it is imperative that you understand the relationship catalog marketing has with retail sales.

There is usually a considerable increase in retail sales immediately following the drop of a catalog, indicating that a substantial amount of retail traffic is being driven by the catalog mailing. It’s extremely important to understand this relationship, especially as the economy forces companies to cut back on their catalog circulations.

In my experience reviewing multichannel companies with retail locations, the majority don’t have a good grasp on the true effect of catalogs on retail sales. For example, one company’s retail executives didn’t want to contribute any of their budget to the production of the catalog because they thought. The rationale was that retail customers would come in and buy, regardless of whether they received at catalog.

Because the company was being run in silos, the catalog division had to do what was best for them. They knew that if they mailed into an area surrounding a retail location, the direct sales would drop significantly.

The decision was made to not mail any catalogs into a store trade area and to focus on customers and prospects that were 30+ miles away from any retail location. Lo and behold, store comps dropped by 30% for the time period of the catalog drops. Since the company was being run in silos (first mistake) and the executives didn’t understand the importance of catalog marketing to drive retail traffic (second mistake), the entire company suffered from the shift in circulation.

More and more, we see press releases where multichannel companies decide to severely reduce or cut their catalog program completely. It pains me when I read those, as in most cases I can almost guarantee they don’t have a good understanding of the true impact the catalog has on other channels. If they conducted a marketing best practices study before making the decision, they would most likely have been able to avoid the lost sales.

Travis Seaton is a vice president with catalog consultancy Lenser.