Article

The changing role of catalogs in multichannel

The ROI from catalog marketing is low relative to other online and offline media, according to a new report.

March 10, 2010

The ROI from catalog marketing is low relative to other online and offline media, including e-mail, Internet search and direct-response newspaper ads. The reason is that catalogs are expensive to produce. But consumers revere them and they hold an important position in the multichannel mix.

Catalog retailers’ devotion to print media means they have fewer resources to spend on their Websites, and as a result, they are losing e-commerce market share to Web-only retailers. “To compete, catalog retailers need to optimize their catalog business and shift more resources to their Web channel,” said Grau, eMarketer retail analyst and author of “The Role of Catalogs in the Multichannel Model.”

Still, print catalogs have advantages over other marketing tools in creating product awareness, acquiring customers and building brand loyalty. That’s why consumers are increasingly shopping the catalog and buying online, although few consumers still prefer to shop the catalog and order by phone.

“It’s because they either feel uncomfortable buying online or need hand-holding to complete a major purchase,” Grau said.

Retail industry experts who predicted the demise of catalogs at the hands of e-commerce in the Internet’s early days are wrong. The rise of online shopping has forced retailers to re-examine the purpose of their catalog business and its role in a multichannel strategy.

So where do catalogs fit in the multichannel marketing model? No simple formula exists for determining the catalog’s right place. Traditional catalogers are correcting a channel imbalance by focusing more on their faster-growing e-commerce channel. Meanwhile, some Web-only and store-based retailers are adding or expanding a catalog business as a way to broaden their customer base and deepen their relationship with existing customers.

For example, JCPenney is terminating its “big books” and instead producing specialized catalogs for customers who want them. Taking the opposite stance, Zappos.com launched a holiday catalog as a way to win back lapsed customers and attract new ones.