10 Principles of Catalog Shopping for Retailers
As more retailers turn to the Web, direct mail and catalogs to offer customers alternatives to burning gas traveling to malls, many are taking a crash course in direct marketing, seeking ways to make the direct channel work for them.
Last month, we laid out the first five of 10 key principles retailers should follow to make the most of catalogs and the Web to augment their retail/multichannel programs. Here are principles six to 10.
6. Use effective segmentation to select names for catalog contact. While very sophisticated segmentation and scoring models have proven successful at larger companies, it’s best to first exploit the power of recency/frequency/monetary (RFM). Variations of this method are the simplest and often best ways to extract names from the consolidated customer database.
In the simpler days of yore, companies could use plain RFM segmentation to get most of the available sales from their housefiles. Today, however, consider a C-RFM-P segmentation structure with the following specifications:
C: channel of origin — generally store, catalog and Internet, but also can be others, such as TV or magazine advertising;
R: recency by discreet time bands, such as calendar season, but not with proximity to current date;
F: frequency of your total orders — 1x, 2x, 3x-plus;
M: monetary transaction value average; and
b>P: product dominant interest or trade style, such as tabletop vs. décor or sailboat vs. powerboat.
7. Examine your product selection, and use the catalog to your best advantage. Typically, you carry the fewest SKUs in your stores, more in the catalog and, of course, you offer everything you have available on the Web site. Until recently, consumers have favored companies with authoritative “big book” catalogs. But this appears to be changing.
Consumers are becoming more comfortable using internal search on Web sites — so much that they often favor companies’ sites over the large printed compendiums that used to be so effective in establishing market authority.