Retailers have always been at the forefront of consumer needs. They know their markets and have adapted to meet them. From blade signs to the metaverse, retail has transformed itself over and over. But like many things, trends can be cyclical. And what used to work, then didn’t work, can ultimately work better than before. How? Nostalgia is one explanation, but, more often, we find that while people evolve, they don’t ultimately change — at least not completely. People still want to connect with others. They need to engage, have experiences, explore, learn, be entertained and establish their position/identity within society. What we’re seeing is that post-pandemic/quarantine psychology has elevated a renewed interest in physical engagements over digital. Thus, opening the once locked door to print marketing, direct mail and catalogs.
From the days of the Sears catalog, marketers have applied the simple science of identifying where their customers are and how to best get their products/services in front of them. Catalogs were used originally to bring products to consumers who were in remote/rural areas. Stores were based in the urban, densely populated areas/cities and direct mail was used to bring stores to those who lived outside of that market radius. As populations started to migrate from cities to suburbs, retailers followed suit and formed downtowns, Main Streets and ultimately shopping centers. With the birth of the internet and e-commerce, we saw retailers taking their goods from the streets and into homes — where the consumer’s front door became the new store.
In turn, catalogs became archaic and a brand luxury. With paper costs, sustainability concerns, postal increases, mail clutter and limited personalization capabilities, the use of catalogs to produce a ROI/ROAS became more challenging. Retailers turned to the digital space which was fast, customized, highly measurable, price responsive, cost effective, and offered exponential reach and inventory exposure. And just like that, direct mail became so last year. However, after many years of learning algorithms, investing in video advertising, learning social platforms, optimizing websites, and dealing with evolving and more restrictive privacy regulations and email fatigue, marketers, much like fashion that makes a comeback, are revisiting physical vehicles to communicate with their customers. So, are we finally seeing the return of the catalog?
Catalogs are very predictable. They allow brands to define their personality, create aspiration, and automatically trigger engagement with the consumer whenever they go to their mailbox. They can have a shelf life well beyond the fleeting digital ad and provide a more personal experience with the shopper — much like a book does over a Kindle experience. When a catalog drops into a home, retailers/brands know exactly when to expect sales from it. They have an in-home 10-day strong selling window with a bell curve model that allows them to time product deliveries, have more accurate inventory levels based on space and presentation in the catalog, and gear-up customer service accordingly. Catalogs/direct mail also have the added benefit of creating ROI synergy from multichannel advertising. Shoppers who communicate with a brand through multiple channels convert more, spend more and become more loyal than shoppers who only hear from brands via one medium. The magic combination used to be radio + print/direct mail, but now digital vehicles are supplementing broadcast to mirror the effectiveness of the multiple touch media plan.
Who’s doing it today? In addition to the legacy catalog companies like L.L.Bean and various gadget/home furnishings brands, the use of direct mail/catalogs are again being used by specialty fashion brands like J.McLaughlin and growing digital-native brands like UNTUCKit. Print vehicles are also surfacing regularly for subscription brands and prepared food delivery plans. Even Amazon.com is leveraging a catalog to promote seasonal retail during the holidays. Why the change of heart?
It’s all about the race to omnichannel, both in distribution and in marketing. As retailers strive to meet their consumers wherever they are and whenever they want to shop, they need to build multichannel, multitouch engagement points. Mature shoppers still like to engage with print and even the digital-savvy next-gen shopper likes to break away from the screen occasionally (think Anthropologie’s catalog). So, the use of catalogs isn’t really a yes or no decision. Retailers need to ask themselves how can they best reach their audiences in ways that drive attention, represent their brand, engage, sell and build loyalty through value, promise and service. The case is still true that recent buyers are your most likely next buyers and that your loyal customers are more valuable and less costly to keep than to acquire new customers.
The entire customer relationship may look like a funnel to marketers, but it’s more of a bullseye in the lens of actual consumers. With the center being them, of course. The concentric circles around the center will vary by brand, where some may rely more on print, others on digital and, still others, on brick-and-mortar. This cycle may change by audience segment and over time. Some brands, like Soft Surroundings, have built their business on catalogs and that still represents most of the company’s total revenue compared to sales driven from its brick-and-mortar stores. The same would be true of legacy catalog brands. While fashion retailers and other categories may see the complete inversion of this business model, so will the investment allocations. Then there are brands like Warby Parker, which is a true omnichannel marketer. It started as a direct mail brand offering five in-home delivered eyeglass frames to shoppers. Warby’s only store was a showroom in its corporate office, and its website evolved as technology allowed for 3D and augmented reality virtual try-ons. Brick-and-mortar expansion followed as did direct mail (full circle).
So why doesn’t everyone hop on the catalog bandwagon? Cost is still an issue as are the limitations with dynamic pricing and promotional elasticity. Stores and websites can take immediate markdowns while catalogs have fixed printed retail values associated with items. However, layering in direct mail and catalogs into the marketing mix may be something every brand can benefit from. Consumers are poised to engage with physical extensions of brands. This may explain why unboxing is so endearing to consumers (when shoppers get their packages delivered to their homes, this is the experience/excitement of opening the boxes — actually born from the iPhone unboxing experience). Like anything else in business, however, knowing when and how to use various levers to reach, engage and convert consumers takes more than a large budget; it takes discipline, metrics, attribution methodology and technology/systems to execute the promise of brand experience across all touchpoints. Other than that, the rest is easy.
Laura Barrett is a retail advisor at Columbus Consulting, a boutique retail consulting company.
View Original Article
