Last month, JCPenney announced that it was shutting down its catalog operations in order to reduce "investment in areas of the business that no longer contribute meaningfully to its financial performance."
The printed catalog is iconic in the history of retail, dating back to 1848 with the first Hammacher Schlemmer book, and later in 1888 the very successful Sears catalog, which at one point topped 500 pages.
But the ways consumers use catalogs have changed drastically, thanks in no small part to the Internet.
Catalogs open the sale, not necessarily close it
In 1996, Leslie Linevsky launched the website Catalogs.com, which generates consumer leads for mail-order catalog retailers. Today the site has contracts with more than 650 merchants, and last year it delivered them more than 2 million qualified leads — an 8 percent increase over the previous year. The site receives about 1 million unique visitors every month.
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Linevsky, who has been in a unique position to view the changing consumer sentiment toward catalogs, said her clients started seeing a significant change in consumer behavior about three years ago.
"What I hear from them all the time is, their 800 numbers are almost not being used at all," she said. "The order forms have totally gone away. Faxed orders have totally gone away. People take the catalog, they flip through it, they turn the pages down. Then they go online and type in the exact item number. That's very different from what used to happen three years ago."
As a result, she said, print catalogs now instigate the sale, but almost never close it.
She also said that retailers are having success by being more specific in their marketing. Gone forever, she says, is the one-inch-thick omnibus catalog, replaced by multiple, smaller books.
"Sears is a perfect example of doing it right," she said. "They now print a book for home décor, they print a book just for maternity, they print a book just for tools. They're segmenting, they've got a very good website, they're doing very good social media tie-in with their print — it's a whole campaign."
Catalogs as branding tools
In the specific case of JCPenney, the catalog division was designed to sell products and generate hard revenue numbers. It clearly wasn't doing that, and retail consultant and "Retail Doc" Bob Phibbs said the company was right to bring down the axe.
But while that program didn't "contribute meaningfully to financial performance," that's not the barometer used by many retailers. Headsets.com, for instance, used its catalog channel as the primary branding vehicle for the launch of its new OfficeRunner headset line last year, according to CEO Mike Faith.
"Sure, catalogs are less relevant, they cost more, and the Internet takes away some of their needs," he said. "We've reduced our own circulation over the years. But they still boost sales, and they offer credibility. Although people don't always buy from them, the fact that they receive one offers a branding opportunity that is additional to any non-mail advertising."
Lewis Paine, senior vice president of research firm GfK Retail, said the old JCPenney catalog model — a separate sales channel with its own management and operations — is not likely to be profitable anymore. Alternately, retailers are successfully using catalogs as "a way to showcase their products to consumers that can relate better to them via that media," he said.
In the long run, that may not provide enough value to the retailer to save the venerable mail-order catalog from the changing of the times. Doug Stephens, president of Retail Prophet Consulting, said catalogs are a "token of the inability of some leaders to let go of the past," noting that most Millennials go through their entire life never using a catalog — literally, the target audience is dying off year by year.
"Yellow pages, newspapers, dictionaries, business directories, text books and anything else that kills forests for no reason will most definitely be eradicated," he said. "It's just a matter of time. They just don't make sense economically, socially or even functionally anymore."
And where would that leave Catalogs.com? The company already seems to be looking down that road: It recently unveiled a new service for its retail clients that takes their product inventory and turns them into flippable e-catalogs for viewing on the iPad.
(Photo by jooleeah_stahkey.)