Ending The Catalog: A Checklist

I've been associated with catalog shutdowns for two decades ... either shutting the darn thing down or reducing circulation to only the most productive customers. Not a popular person around catalog agencies, paper reps or printers ... but it's a necessary job.

If you're saying to yourself right now ... "geez, idiot, you're talking a lot about Orvis in the past week", you're right. There are a lot of things I know that I can't talk about, and if one of the most conservative brands in the history of commerce does something stunning, you should pay attention.

Let's introduce a "checklist" for determining whether you can get away from paper as well. Share the list with your boutique catalog agency, if they push back, well, it tells you something, doesn't it?

Still Generating Mail/Phone Orders:  If you still generate 10% or more of your orders via mailed-in checks (yes, Gen-Z, that still happens, splash some water on your face and pick yourself up off the ground) or via phoned-in orders at your call center, you cannot get away from catalog marketing without pain.

Annual Repurchase/Rebuy Rate > 40%:  If your annual rebuy rate (12-month buyers) is north of 40%, it is much easier to get away from catalog marketing. If it is above 55%, pull the rip cord, it's over.

Mail/Holdout Test Results:  If you chose to not execute mail/holdout tests, you cannot get away from catalog marketing. You simply don't have the knowledge necessary to know what to do. If you've executed mail/holdout tests and more than 70% of sales are organic (i.e. still happen) when catalogs are not mailed, you may prepare your catalog exit plan.

New Customers:  Any brand generating 35% or more new customers through catalog marketing needs to create a two-year transition plan before beginning an exit from catalogs. Most of you have figured out how to move on from catalog customer acquisition. If you're still having fancy dinners with your co-op partners in Colorado, it's time to begin your two-year transition plan.

YouTube:  Here's a simple guideline ... you should have as many YouTube followers as you have circulation depth for your primary November catalog. If you have fewer YouTube followers than November catalog recipients, you are doing something wrong. You are a media company, not a catalog brand. You want some inspiration? Look at some of the videos created by King Arthur Baking Company (click here). Or on Instagram, where they are also popular (nearly a million followers). You can do this! You are a media company who monetizes content by selling merchandise instead of selling advertising space.

Personalization:  If you are not sending personalized merchandise assortments to each individual email marketing recipient, you are not ready to transition away from catalogs. You simply do not understand the preferences of your customers ... you are a mass marketer, and that's why you still mail a one-to-many catalog to so many customers. There 20% to 50% gains to be had personalizing the merchandise assortment to your customer base. Brands without catalogs (i.e. almost all brands) have to hustle to be successful.

Community:  If you don't have at least 1-3 "experts" who speak passionately about what you sell and are publicly recognized by your customer base ... 1-3 experts you can build a community around, you are at least two years away from being able to even think about not sending catalogs anymore. The very fact that most of you will say "well, we're two years away" after reading this and then do absolutely nothing about it makes me sad.

Digital Ad-To-Sales Ratio:  The inverse of ROAS, ad-to-sales ratios for digital marketing that are < 10% suggest "opportunity". When you take the catalog away, you'll be able to increase digital marketing efforts as the catalog won't cannibalize digital efforts via misguided matchback analytics. If your ad-to-sales ratio for digital efforts is already over 20%, well, how do you think you'll make up the sales you lose when the catalog disappears?

Email Marketing Share of Annual Sales:  Your email marketing program (which I do not lump in with digital efforts) should already make up 25% of your annual sales. If email marketing comprises at least 25% of annual sales, you may move forward and begin winding down catalog operations. If email marketing is < 10% of annual sales, you may never be able to get away from catalog marketing, because you haven't built out all of the necessary marketing skills required to speak to customers outside of print.

Demographic Overlay:  If at least a quarter of your customers are age 65-79, you will mail catalogs for years to come ... and then hit an abrupt and highly predictable cliff. If you don't have many 65-79 year old customers, you may move forward and begin winding down catalog operations. Catalog marketing is distinctly targeted at Baby Boomers.

Profitable Stores:  Any market where you have 10% pre-tax profit on sales attributed to stores is a market where you no longer need to mail catalogs. Why are you mailing catalogs AND paying for expensive brick 'n mortar? Over. End Game.

Equal Monthly Sales:  If you generate half the sales in May that you generate in November, you are less dependent on marketing and consequently you can get away with mailing fewer catalogs. Brands with reasonably equal monthly sales tend to generate more "organic" sales than do brands that are highly/seasonally dependent.

November / December Ratio:  If you generate more sales in the two weeks prior to Black Friday / Cyber Monday than you generate in the two weeks after, you cannot as easily get away from catalog marketing. Older customers have institutional memory of not receiving a package in 1994 and they order early as a consequence. Younger customer expect to order from you on December 14 and receive merchandise on December 16 ... this is the audience that doesn't need a catalog.

Vendor Office:  If your paper team or your printer leases a satellite office a quarter mile from your campus, you are not going to easily get away from catalog marketing. This is a clear sign that your "trusted partners" control your brand. It gets even harder if you let these folks have a cubicle in your office campus ... and it gets harder still if that cubicle becomes a walled office with a door. Worse, if these folks are "collaborating" with you on your circulation plan, you're doomed.

Merchandise Reporting:  If you don't have reporting that shows you what sells best via print and what sells best via digital efforts, you are two years away from even thinking about ending catalog marketing ... you simply do not have the intelligence to make a proper decision.

Merchandise Preference:  If what you sell performs just as well digitally as it does in print, you are much closer to the end than are brands where the merchandise assortment is fundamentally different between print and digital. When the best-selling item ranking list is very similar, you can trust a customer to buy from digital channels. When the ranking is different and you take away a channel, don't expect the customer to go with you.

• Hint:  It has been my experience that catalog brands are not good ... not good ... at understanding the merchandise/channel dynamic. This lack of knowledge harms catalog brands, costing them profit.

I'll stop here for now. If you don't know the answers to these questions, you'll need to start working with me right away so we can figure out what your future looks like (kevinh@minethatdata.com).