E-commerce: Winning the War
Congratulations, catalogers! We’ve won the battle against the “pure play” e-tailers. We all said they couldn’t last, and now they are dropping quicker than power lines in a Wisconsin ice storm.
At the same time, catalogers have brought to the Internet channel all of the great assets we knew we had. Merchandising, graphics and copy capability, systems and fulfillment. The results are in, and the catalog business is migrating successfully to the Internet more quickly than any other type of business.
With all the great new Internet business for catalogers shown in the chart below, shouldn’t we be experiencing the best of times? You’ve all read the headlines: “Coldwater/Hanover/J. Jill, etc. report Internet sales increase,” “Most catalogers’ Web sites profitable...” “Jupiter research reports holiday e-commerce sales at $10.8 billion...”
Unfortunately, just as the dot-coms have found there is no New Economy or New Math for measuring profits and worth, catalogers have found there’s no “new profitability” in producing an Internet sale.
The chart accompanying this article shows how rapidly seven catalogers are bringing the Internet into their sales mix, and what the effect has been. The companies included in the chart meet four criteria:
1. They’re public.
2. They report catalog and Internet sales quarter by quarter.
3. They’re principally oriented to merchandise sales to consumers.
4. They derive a very significant portion of their sales from the direct channel.
We’ve had to eliminate a few companies from the chart, because they simply do not break out Internet sales. For example, Blair Corp. feels its new Internet initiatives are too small to break out, and Lands’ End reports Internet sales annually only.
It’s a small sample of companies, and the last reported quarter as of press time does not include the all-important holiday selling season. But the numbers are real—not hype from market research firms with a vested interest in growing Internet sales, nor press releases from investment analysts or trade associations. Based on these data and conversations with other catalogers, I have drawn a number of conclusions about the Internet phenomenon.