November 01, 2006

Home Depot Shelves Two Catalog Titles

Two multichannel media sources (here and here) reported today that Home Depot planned to dump two catalog titles. Multichannel pundits would shudder at exiting a catalog strategy.

Here's one thing I learned during my days at Eddie Bauer --- days when Eddie Bauer printed a hundred million dollars of EBIT per year. It is darn hard to drive store business with a catalog. Possible, but darn hard.

Take your marketing hat off, and put your customer hat on. How many times have you walked into a store in the past year, with a catalog in-hand, ready to purchase merchandise in the store?

Catalog marketing used to be so much fun. Multichannel catalog marketing isn't fun. It is hard work, work that frequently goes unrecognized, taking second-fiddle to sexy search strategies and double-digit online growth rates.

Problems with catalog marketing in the multichannel age:
  • Twelve years ago, catalog experts presented merchandise in a way that made you want to open your handbag, pull out your credit card, call a 1-800 number, talk to a live voice, and purchase merchandise. The catalog expert spoke to the same target audience each time, with the same voice.
  • Today, the target audience for the retail, online and catalog channels are frequently different. The purchase motivations from each channel are different. Your catalog audience is frequently older than your target customer. Your online audience is younger, and may be motivated by the hunt of shopping, using shopping comparison sites. Your retail audience shops for the experience. Creating a catalog that speaks to those three audiences, simultaneously, and drives adequate volume to each channel, is hard, scientific work.
  • Getting a customer to change behavior, without a price reduction, promotion or gimmick, is hard work. Take retail, for instance. Take off your marketing hat, and put on your customer hat. A catalog arrives in the mail. You thumb through it, and see merchandise you like. Because the company is 'multichannel', you decide you want to view the merchandise in the store before purchasing it.
    • You have to make a special trip, maybe twenty minutes one way, to buy that item. That's an hour of free time you will never get back, to purchase merchandise.
    • You may have great intentions to buy the item, and plan a trip on the weekend to do so. Then the weekend comes, and your child sprains an ankle playing soccer. Your sixty minute round-trip visit to the store is consumed by a trip to the doctor. The multichannel retailer motivates you to purchase, but life gets in the way, preventing the purchase.
    • You actually drive to the store, and are dissuaded from your purchase by a competitor who offers 20% off for a comparable item. The multichannel catalog just drove sales to the competition.
    • You actually get to the store you intended to purchase from, but find your item is sold out, or are turned off by a disenchanted sales associate, thwarting your purchase.
    • Worse, you actually get into the store, find your item is sold out, and the sales associate tells you to go home and buy the item online, or even offers to buy it online for you while you wait, convincing you that you just wasted an hour of your life. The marketer feels they just provided a great multichannel experience. The customer feels burned that she wasted an hour of her time.
Catalog marketing designed to drive you to a store is fraught with peril. Too many things happen that are outside the marketer's control. Those things lower the productivity of the catalog, thereby minimizing the sales potential that catalog used to easily harvest from just the 1-800 number. Further, the diverse audiences interested in catalog, online and retail cannot all be served by the same creative execution, without compromising sales from at least one channel.

Multichannel cataloging can be done, and can be done well. But it takes really gifted, experienced people, with the right mix of direct and retail experience, selling ability, and maybe even branding strategy.

Maybe Home Depot learned this over the course of the past year. Or maybe their strategy just wasn't profitable. Or maybe there were political reasons for their decision. Regardless of the reason, the catalog titles are gone, and we're left to speculate why.

What do you think of this discussion about catalog marketing? Care to share your point of view?

2 comments:

  1. Anonymous5:53 PM

    A couple thoughts...

    1.) While it may be difficult to drive retail sales with a catalogue, its more difficult to measure! Unless data capture at point of sale is a priority for your retailers, understanding the relationship b/w retail and the catalogue is very difficult. With strong capture, intelligent analysis is possible, and understanding this dynamic becomes possible - this first piece of the puzzle.

    2.) The catalogue that worked 12 years ago likely won't drive retail sales. A smart MC marketer will tailor their catalogue to support all channels, theirin lies the challenge. Do you segment based on expressed channel preference and develop a catalogue for each type of buyer, or do you try to accomplish everything with one catalogue? Sounds like a testable proposition given resources.

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  2. Ray, thanks for the comments. I appreciate that you took the time to share your thoughts with our audience.

    It sure would be neat to run a few simulations. In the first simulation, you execute one brand, to a target audience. In the second simulation you execute multiple brands to different targets. You let the simulations play out for five years, and see how each business evolves.

    Hmmmmm.

    ReplyDelete

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