Copernicus is Back

For those of you who may not be history buffs, Copernicus was the guy who broke ranks with conventional thinking and proposed that the sun, not the earth, was the center of the universe. That doesn't sound like a huge revolution today, but back in the late 15th century, it was a monumental shift in thinking. It up-ended everyone's frame of reference.

In our world of on-line retailing, I am pretty sure we are about to undergo a shift as major as this - a shift in thinking, strategy and execution that will, literally, change the frame of reference most catalog marketers have today.

Online centricity

Here's the short of it. If you are part of a company that relies on catalogs as the lynch pin of your customer acquisition and revenue generation, you are in for a huge surprise over the next 5 or so years. To survive, you will have to shift from your current view that catalogs are central to your revenue generation to a view that looks at on-line retail as the center of customer acquisition and revenue generation. Catalogs will become, primarily, a means of driving customers to our on-line and bricks &mortar retail channels.

What's driving this frame-of-reference shift?

Production costs are up

First, the rising cost of producing a catalog. Any cataloger will tell you that the top challenge today is the rising cost of postage and paper, combined with the uncertain future of the Postal System. The challenge of generating an acceptable ROI on a catalog is becoming more and more difficult. In fact, the challenge of putting together long term expansion plans is harder now than it has ever been because of this uncertainty. Ask any cataloger and they will be happy to tell you that being held hostage to the US Postal Service is not a pleasant experience and worse yet, alternative delivery methods are few and far between.

Response rates are down

Second, the continuing decline in catalog response rates continues to be a huge battle for the catalog companies. This decline persists despite new methods of modeling and name selection that are being implemented, and points to the fact that traditional catalog-browsing - looking at a relatively small set of products that someone has picked for you to see - is growing less appealing to those customers who participate in "disassociated shopping" (in which the buyer is not physically present at the point of purchase).

How long can a business deal with 5% response rates combined with an uncertain cost structure? Not long when 95% of your catalog recipients see your offering as not relevant. Add to this the huge number of catalogs that are being mailed and you begin to see that raising those response rates by hoping to stake a share of the shopper's mind is getting more and more difficult.

How we consume information is changing

The third reason for this pending shift is a change in the information gathering and processing methods of the upcoming generation. The current generation of 20-40 year olds is not one that takes kindly to a medium that requires passive absorption of information (the method that a catalog uses). In other words, young people don't "sit down and read a good book (catalog) for any length of time". They prefer to operate in a world where "instant information" is at the other end of a cable modem, iPod or a cell phone and on-line product research and comparison is a key step in the buying decision. They get their news on-line, they watch television and they research on-line. Many shoppers see sitting and reading a catalog as something that is not part of their usually activity.

Online experiences can incorporate persuasion

Finally, technology and personalization offers a far-better shopping experience than paper. Do shoppers really want a "one-size fits all" shopping experience that a catalog offers? Not unless they are "Mr. and Ms. Average" - not in the world of search and e-commerce and comparison shopping and 360-degree views. For anyone under 45, preference driven on-line information gathering and evaluation is the accepted way to shop. Search for what you think you need, erase any doubts by evaluating information and make a decision. All of this is done on-line.

These are only a few of many reasons that point to a key fact. Just as the Main Street shopping experience gave way to a Mall based "shopping event", so too will the catalog experience give way to the on-line "shopping experience".

The future for catalog marketing

The danger of ignoring these trends is especially high for catalog companies that currently get 60 - 80% of their business from their catalog mailings. If this idea of a shifting centrality doesn't figure prominently in your five year strategic plan, you better get thinking. The universe is going to shift around you and one morning, you will wake up to a very different world.

So, despite the "pandemic" view that I offer, there is hope for the next age of shopping - provided that you start to consider the following ideas.

If catalogs are going to become a driver to on-line marketing, what do they have to look like? Most likely, your next-wave catalog will be smaller, more "lightweight", and be less "copy heavy". It would contain top selling or trend-setting items and categories that will very quickly capture your reader's attention in a way that will drive them to become aware of your Unique Selling Proposition and reinforce your brand.

Categories will be a prominent feature, as well as lifestyle experiences, that involve your product. Prices will still be part of the presentation and every bit of copy will contain references to on-line shopping ("a better experience is just a click away"). What you will be doing in this next-wave catalog is getting the buying center of your shopper's mind working, considering and drooling.

Creative will focus less on the product features, functions and benefits, and will concentrate more on supporting the presentation of categories and lifestyles.

Your on-line and brick-and-mortar stores will need to be tightly integrated to your catalog. No disconnects allowed. There will have to be a seamless transition from the lifestyle and category and product experiences you use to tempt your buyer in the catalog to the next stage of the selling process.

If you decide that this idea of a shifting catalog universe has merit, you also know that these types of changes don't happen overnight. At this point, however, anticipating this shift should be a key part of every catalog company's five-year strategic plan. It is well worth your time to brainstorm what your next-wave catalog would be like, and how an e-commerce centric world would change how your call-center is staffed and how you react to the frenzied ramp-up hiring of temporary call center employees during holiday periods.

The possibilities, as they say, are endless, and Copernicus is still right even after all these years!

Fredric Gluck is Principal Partner at MarketThink, an agency specializing in on-line and E-commerce Marketing Solutions.

Volume 130: 5/15/06

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