April 30, 2008

Can A Catalog Brand Survive As An E-Commerce Pure-Play?

The April survey question was "Can A Catalog Brand Survive As An E-Commerce Pure-Play, One That Does Not Mail Catalogs?" Here's how you responded to the survey question:

Can a catalog brand survive as an e-commerce
pureplay, one that does not mail catalogs?


Yes, Customers Will Just Shop Online 44%
Yes, But Sales Will Plummet 35%
No, The Cataloger Will Soon Be Out Of Business 21%

The reasonably even distribution of answers is congruent with the data I see across various Multichannel Forensics projects. Some companies would be out of business within a few months. Some companies would see a dramatic decrease in sales. And some companies would thrive.

Yes, Customers Will Just Shop Online:
  • Brand has a retail channel that is dominant.
  • Online channel is more than fifty percent of direct-to-consumer sales.
  • Online channel has a broader merchandise assortment than the catalog has.
  • Customer never enters catalog key-code when ordering online.
  • Brand is not "over-mailing" customers.
  • Brand is in "Retention Mode".
  • Catalog is in "Transfer Mode".
  • Customer is largely urban or suburban, age 18-45.
  • E-Mail and Paid Search performance improves in mail/holdout tests.
Yes, But Sales Will Plummet:
  • Brand does not have a retail channel, or has a small retail channel.
  • Online channel is less than fifty percent of direct-to-consumer sales.
  • Online channel has the same merchandise assortment as the catalog.
  • Customer sometimes enters catalog key-code when shopping online.
  • Brand is in "Hybrid Mode".
  • Catalog is in "Equilibrium Mode".
  • Customer is largely suburban, age 35-55.
No, The Cataloger Will Soon Be Out Of Business:
  • Brand does not have a retail channel.
  • Online channel is less than thirty percent of direct-to-consumer sales.
  • Customer always enters catalog key-code when shopping online.
  • Brand is in "Acquisition Mode".
  • Catalog is in "Isolation Mode".
  • Customer is largely rural, age 50-80.
In my experience, these general guidelines hold up pretty well. We could get away from a catalog marketing program at Nordstrom because our customers largely fell into the first classification --- middle-aged, urban/suburban customers offered a better merchandise assortment online and in stores. But if you are a cataloger of fine cheeses with an older/rural customer base, you'd be out of business without your catalog.

3 comments:

  1. This the right way to proceed with the customers in order to get the customer survey very good. We have to inform them that this is a customer survey and we don’t need any personal information just we need feedback.

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  2. Andrew Robertson4:56 AM

    Interesting data and guidelines. Your survey assumed that a brand had a catalog and was considering eliminating it. What would be the consequences? My question is for a start-up trying to decide whether to develop a catalog business. What are the characteristics of businesses that really need a catalog to thrive (vs. an online store) and why?

    BTW, tremendously useful and throught-provoking site. I found it this morning and have been poking around.

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  3. A catalog is really nothing more than an expensive targeted ad, delivered via the mailbox.

    So the question for an online startup is to determine if the target audience is receptive to that form of advertising? If so, have at it. But if the online startup enjoys customers in their 20s who are social networking fans, a catalog is not going to offer the best strategy.

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