For years now, critics have been saying the print catalog is dying. Going away. A relic that's being replaced by the internet. It was almost like the word "catalog" was dirty. Something out of date or old fashioned, or so it seemed.
It's a new year and the Lett Direct team has put together "50 Best Tips for 2015" that will help you increase your profits. While not in any particular order, these suggestions are being made to help you improve your print catalog and digital marketing programs. Some of our suggestions might be obvious while other tips might stimulate your thinking. Regardless, we hope our tips and suggestions for 2015 will benefit your business.
I began my catalog career over 40 years ago. I've learned several lessons over the years about the dos and don'ts of catalog marketing. I'd like to pass along some of what I've learned and the principles we follow today as we advise our customers. I've seen companies with the best of intentions make decisions opposite of what they should have done. Often these decisions have been an attempt to save money (or at least they thought). In many cases, adding rather than reducing is the better choice.
There's a favorable relationship between the incremental costs of adding pages vs. the actual return. Pages generate a high return on investment. For example, increasing page count from 52 pages to 60 pages yields a 15.4 percent increase in the number of square inches of selling space. Yet, typically the cost is only 7.4 percent more for the eight extra pages (again, this is approximate depending on the quantity printed).
Catalog executives always seem to have a great deal of interest in their average order size. They become concerned when they see it decrease. What's more, catalogers often spend time trying to artificially increase the average order size without really understanding the implications of doing so. That's why I want to provide a good understanding of what's behind the average order size and other measurements that might be more important to your analysis.
Print catalog circulation is starting to increase for a number of reasons. First, mailing a catalog drives business to the internet. We know that up to 80 percent of all orders placed online were the result of mailing a catalog. Second, the lifetime value (LTV) of a catalog buyer is higher than other channels. For example, if a consumer goes to a search engine for a particular item, they might buy it at the right price, but it doesn't mean they'll buy again. However, if the order originates via a catalog, the consumer is more inclined to make repeat purchases.
Approximately 60 percent of consumer catalog sales and 55 percent of total orders generated annually are received during the holiday season (October through December), according to data we compiled at Lett Direct, Inc. This three-month period represents all or most of the profit for catalogers during the year. Therefore, it's critical to make certain your business is hitting on all cylinders during the busy holiday season.
Catalog response rates have been flat or trending down the past few years … or so it seems. The web is certainly a factor, but there are several other reasons why this is the case. When response rates start trending down, what action should you take? How should you alter your print circulation to compensate for lower response rates? Often, the actions management take are the opposite of what should be done.
While the best marketing strategy for 2014 is to leverage all channels, here are a few print catalog recommendations for the new year:
According to the CFI Group's Retail Satisfaction Barometer for this year's second quarter, 77 percent of consumers said shipping costs factor into their willingness to shop online. This certainly reinforces the importance of "free" or "flat" shipping offers during the busy holiday season. Shipping offers are a big deal to consumers shopping for holiday gifts. The decision-making process is greatly influenced by such offers. They can mean the difference between getting or not getting an order. Consumers actually look for sites that offer free shipping. The bottom line is consumers don't like to pay shipping and handling fees.
There's more to obtaining print bids than price. Printer lead times should be part of the mix. For example, when mail tapes and creative files are due to the printer should be considered. The shorter the deadline when mail files are due to the printer the better. This enables catalogers to include more recent buyers in the mailing.
With the help of The Dingley Press, we conducted a study to determine how many catalogs it prints that still include some type of order form. We found that almost half of our fairly large sample size have no inside ink-jet or order form insert, but they do have an order form printed on-page in the catalog. Another 18.5 percent use a bind-in order form. In summary, 71.5 percent of the catalogs we surveyed use an order form; only 28.5 percent have eliminated the order form entirely.
The printed catalog is the main driver of traffic to the web. However, with all of the other touchpoints available to consumers today, how do we really know the impact of catalog mailings on web sales? And why do we give so much credit to the print catalog? There are a few reasons why:
When deciding on a printer, most retailers focus on print manufacturing, paper and distribution (i.e., co-mail, freight and postage) costs. However, there's more to obtaining print bids than price. Printer lead times (i.e., the schedule) are also an important consideration. For example, the dates mail tapes and creative files are due to a printer shouldn't be assumed or taken for granted because they vary greatly. While this may not be a direct cost, long lead times from your printer can affect your sales and bottom line.
Stephen Lett gives a guide to factors you might not consider when looking for your next printer.