VIEWPOINT
PERFECT STORM OF ACTIVITY THAT HAPPENED IN 2021 THAT BEARS MENTION
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Catalogue agencies have been pushing catalogue strategy to retail brands for the past five years, and for good reason (because their catalogue clients are finishing a transition to eCommerce, thereby using less paper). Catalogue agencies and associated vendors/consultants are on a full-scale blitz in 2021 to convince you that cataloguess are making a comeback.
Cataloguers are executing Mail/Holdout tests, and those tests are showing that 25 per cent of sales (if your customer base is 65 years old) to 75 per cent of sales (if your customer base is 35 years old) will happen if you do not mail catalogues. In other words, scientific experimentation shows that most of us seriously overestimate the true effectiveness of catalogues. Tere is a reason that cataloguers took 40 per cent of paper out of the mail between 2005 - 2020.
In the past year, cataloguers saw their 12-month buyer files grow by 10 per cent to 35 per cent due to a COVID-bump in buyers in the past 20 months. Paired with retailers sending more catalogues, there is a surge in demand for paper at a time when mills were closed, causing an actual paper shortage (more demand, less supply). Consequently, my clients have had circulation reduced or even outright canceled, pushing these clients toward increased digital strategy.
Tere are catalogue agencies, consultants, and paper folks who are telling you that this combination of factors means that catalogues are in a period of resurgence. Tey have talented PR folks getting articles published in reputable sources saying that catalogues are back, and that you should embrace the medium. Some are lambasting those who tell you to focus on merchandise instead of how
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you sell the merchandise, demanding that you embrace catalogues. You should embrace catalogues if catalogues sell a ton of merchandise. If your customers love the tactic, have at it!!
You should not embrace catalogues because consultants or paper folks tell you to. You should not embrace catalogues because agencies have smart PR people placing articles in reputable sources.
You should always execute Mail/Holdout tests. Always. If the incremental difference between Mail/Holdout groups yield a profitable outcome, go ahead and mail catalogues, because the outcome is profitable.
Do not fall for the hype ... hype from those who profit if you do what they tell you to do.
Fall for profit! If the mailed segment generates US$20.00 of sales and the holdout segment generates US$16.00 of sales, you got US$4.00 of incremental sales that is likely highly profitable. Vendors want you to focus on the US$20.00 of total sales, suggesting catalogues caused all of it. You should focus on the US$4.00 of sales that is real (and is profitable).US $4.00 is a really, really good outcome. It also means 80 per cent of sales are organic and will happen anyway.
Trust Mail/Holdout results. Do not trust hype.
homeofdirectcommerce.com | Direct Commerce
BY KEVIN HILLSTROM, MINETHATDATA, USA
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