September 04, 2016

Surgically Cutting Catalog Circulation - Williams Sonoma

  • "... has led the company to surgically cut our catalog circulation to rebalance and optimize our investments into digital channels."
Been saying this for a decade ... not fun for some to hear ... so if it comes from Williams Sonoma, maybe the impact will be greater.

There are a ton of catalogers who cater to aging Baby Boomers ... these folks will all go down the "surgically cut" path. It's a certainty, it cannot be avoided anymore, at least if a typical cataloger wants to be profitable.

In time, the old-school merge/purge process will go away as well ... and I know almost nobody in the catalog industry wants to hear that, because catalogers love old-school merge/purge processes.

Here's what is coming for traditional catalogers ... your vendors are likely to disagree with this, and that's fine. We all have different opinions.
  • Merge/Purge processes disappear, replaced by hotline triggers that are integrated with vendor "hot lists". What does this mean? Think of it this way. If you are a New England based cataloger, your might work with a company like Datamann or another agency - there are several. A company like this will maintain a "hot list" of de-duped names fed from all co-ops and other "big data" providers. The "hot list" includes model scores from each co-op, updated hourly (and other data). So when a customer purchases from Williams Sonoma, that transaction is fed to the co-ops, the co-ops rescore the customer based on potential to buy from your brand, the new score is fed to Datamann or any other comparable agency, and your hotline process scours the "hot list" and sends a catalog to that customer on-demand. You'll pay $0.09 per name for the "hot list", with revenue shared by your favorite agency and the co-ops, and your performance will be better because the name is "hyper hot" ... the customer just purchased from Williams Sonoma, right? For those of you who believe in NaviStone ... that's the exact direction their future competition will take to compete with their product.
  • Customer visits your website and is not mobile/social oriented, you'll trigger them a catalog. If so - you won't send a catalog, why would you ever send a catalog to somebody who is a generation or two removed from the art of cataloging?
  • Lapsed customers will fall into digital triggers - catalogs will simply become way too expensive for these folks over time - there will be small 32 page catalogs to send to lapsed customers on a quarterly basis, or triggered when the lapsed customer buys complimentary product from other brands.
  • Catalogs will generally carry winning items in the future ... real estate is too expensive for new items. New items will be advertised digitally (think email in the short-term), and the home page / key landing pages will be the domain of new merchandise.
  • "Hot lists" will dynamically suppress customers who have no interest in catalog marketing (and this list will increasingly swamp the size of the list of customers who have interest in catalog marketing). When a customer buys from a Williams Sonoma store, that transaction will have a negative impact in the co-op models, and you'll save $$$ by not mailing that name.  But this process will be managed by an intermediary ... an agency like Belardi Ostroy or NaviStone or the competitors who are coming ... they will merge data from other sources and create the appropriate suppressions that are frequently missed by the co-ops. And they'll charge you accordingly. A Merkle or Clario have the talent to already be twenty miles down this path!
  • Eventually, leading catalogers optimize themselves out of many of the traditional aspects of cataloging ... monthly catalogs & remails and all that stuff that employees love to assemble but customers increasingly ignore. The catalog evolves - to serve the needs of the "hot list" or to reactivate lapsed buyers as efficiently as possible. E-commerce does the rest.
That's about 5% of my thoughts on the topic - I could go on for days on this topic and field plenty of disagreements in the process ... why not send me a message (kevinh@minethatdata.com) and tell me your thoughts?