Strategy: Decipher Web vs. Catalog Customers
Start with the premise that catalogs and the Internet are interdependent and not adversarial. Remember the brick-and-mortar days when retail channels thought they should receive credit for catalog sales within their trading area? The Web vs. catalog debate is just as silly.
Catalog/multichannel companies today recognize the importance of having an e-commerce presence, and many successful dot-coms now have a catalog or are starting one. The best run companies maximize both selling channels.
This month, let’s explore how to manage those channels together, including mailing strategies for catalog/Web customers, internal allocations to both channels, the importance of matchbacks and profit contribution by channel. Understanding these differences is key to the success of your business.
Catalogers tend to allocate a disproportionate share of sales to the Web. Intuitively, catalogers want to mail less and use the Internet more. Since they’re not always clear on what’s really driving the business, they favor the Web out of a desire to ultimately circulate fewer catalogs.
Organic and paid search can certainly be credited to the Web. So can affiliate programs like LinkShare or Commission Junction. But what about e-mail campaigns? Should sales generated by e-mail campaigns to your catalog customers — catalog mailings generate most companies’ e-mail lists — be credited to the Web? Catalogs are mailed to these customers. And so are e-mail campaigns, which frequently offer a stronger incentive to order online.
That Web initiative is great, but over-allocating these results to the Web will lead to the wrong conclusion. If you reduce catalog circulation, you also reduce the number of e-mail addresses you can add to the file.
Today, 40 percent to 50 percent of all orders come through the Web — not necessarily from the Web. For customers ordering online, the Web provides another, more convenient way for them to obtain merchandise. Approximately 15 percent to 20 percent of that business comes directly from the Internet, via paid and organic search engines and affiliate programs. The catalog is still responsible for 80 percent to 85 percent of all sales.