September 10, 2007

Transition

Those of us who have been in the catalog industry since 1995 know that we are going through a period of significant transition. We may not always acknowledge this fact. But it is happening.

To use broad generalizations, Baby Boomers fueled rampant catalog sales growth in the 1980s and 1990s. Gen-X brought us e-commerce and e-mail marketing. Millennials are fueling social networking, and in many cases are ignoring "traditional advertising".

If you are a cataloger with a target customer this is sixty years old, you might be insulated from this period of transition, only impacted by increasing paper and postage costs.

If you are cataloger with a target customer that is forty or forty-five years old, you are going through a significant transition. A generation of print-responsive customers are being replaced by a generation of e-commerce customers. In the next ten years, your print-responsive customers will be a minority of your business.

Even more fascinating is the fact that in ten years, your e-commerce and e-mail business will be going through a "transition", thanks to dramatically different shopping behavior exhibited by Millennials. We simply can't envision how this generation will shop when they are forty years old. It is highly unlikely they will embrace catalogs or e-commerce as we know it today. They will probably create their own version of internet shopping.

Regardless, direct-to-consumer shopping will be very different from what we know today as "e-commerce". We'll be reading articles from today's e-commerce and e-mail experts about how "E-commerce isn't dead, it's still highly relevant ... Amazon is spending $400 million on an online marketing campaign featuring Gwen Stefani".

I lived through catalog transition during my time at Nordstrom. I watched a $400,000,000 telephone-based business collapse. I watched an e-commerce business grow from zero to a half-billion dollars. I actively participated in the tough decisions that result in marketing dollars being reallocated to e-commerce and "multichannel". I mourned as the catalog talent pool, my friends, were replaced by e-commerce, "multichannel" and "consumer intelligence" skill sets. My team artfully and willingly transitioned their skills to remain relevant in a post-catalog world.

And I rejoiced in my own renaissance!! I was able to re-brand myself as a subject matter expert in forecasting how customer behavior changes over time, across products, brands and channels. As it turned out, this transition was tremendously positive for me. My experiences going through the "transition" are so very important to the work I do for clients today.

If you are experiencing the transition of a career that was built on paper, this Vanity Fair article (forwarded by loyal reader Jennifer Thornton) should resonate with you: "Is This the End of News?".

The author artfully describes the transition he is experiencing in the news business, using common-sense language and everyday situations to describe how the internet, and differences in generational habits, are putting pressure on his career.

I felt the best part of the article was the way the author recognized all of the changes in his field, and is taking a chance on influencing the way news is presented to folks in the future. He may be right, he may be wrong. At least the author is positively using the transition of the news industry to try something different.

Time for your thoughts. Do you agree with the premise that cataloging is going through a significant transition? If you agree, how are you rolling with the punches?

4 comments:

  1. Tom Lindmeier2:19 PM

    I do not think anyone can disagree with your assertion. I too was in the catalog direct mail business since the eighties and was fortunate enough to transition into ecommerce in 2003. The writing was on the wall and I jumped at the opportunity. Fortunately, science and discipline of direct mail transitions nicely to ecommerce. This is part of the reason why many of the most successful ecommerce businesses are direct mail catalogers.

    I think that if the overall percentage of pure ecommerce for catalogers is not at least 50%, they are behind the curve and the business is most likely in decline. If that number does not reach 70 to 80% in the next few years these businesses will fail

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  2. Interestingly, some catalogers with heavy use of compiled lists and an older customer file have been able to keep things moving along.

    When the target audience is younger or middle-aged, the scenarios you describe play out rather quickly.

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  3. Are there any catalog-driven companies that are thriving? Are any companies doing a fantastic job of using print to drive ecommerce, web visits, and retail store purchases? Does everyone assume catalog = call center?

    If we put a concerted effort into a new catalog that pushed ecom, internet visits, branding, and retail (with the option of calling) perhaps the catalog would be more successful.

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  4. There are many catalog companies that are thriving, companies that do a good job of using paper to drive e-commerce sales.

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