*Catalogers Find Web Options, Industry's Course a Mixed Bag

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CHICAGO -- Direct mail merchandisers from all ranks had their basic suspicions about doing business on the Web confirmed at the 16th Annual Catalog Conference & Exhibition, which ended yesterday: There's far more to it than just "being there."


Few catalogers disputed that having an Internet presence is important. And some conceded that having the ability to offer e-commerce would be especially critical in their fourth quarter -- perhaps even making or breaking some big catalog companies by the end of the holiday season. But the goal for many was to find ways to develop solid partnerships beyond the Web.


Bad weather and canceled flights to Chicago forced many to miss the opening reception as well as Tuesday's sessions, while representatives in the exhibit hall said foot traffic was slow throughout the conference.


Attendees said they just wanted to establish links to their Web sites, but most also were looking to enhance their core capabilities and strengths or create alliances with other companies that could help them sustain more long-term growth. In dispute was what constituted a core capability for a cataloger as well as an Internet vendor. And plenty expressed concern over how many Web-oriented consultants and service companies really understood the catalog industry. Some defended staying focused on sales and distribution channels that are still driving the overall breadth of the industry. Others expressed cynicism at giving technology the cold shoulder in the midst of a brisk economy complemented by general prospects for increased sales.


H. Robert Wientzen, president/CEO of the Direct Marketing Association , captured a more sobering attitude early on, setting a clear tone for the four-day event when he told attendees at the opening session, "We are 32 weeks shy of the 21st century -- and from my vantage point it's a mixed bag."


If the direct marketing industry were a pie, Wientzen said he would characterize it as "bigger, juicier, more tantalizing than ever before. However, there are a lot more folks trying to get a piece, so the slices are getting skimpier. And, frankly, some people won't get much -- if any -- because they're just not going to get to the table fast enough."


A stroll through the exhibit floor filled with sparkling Internet companies looking for new clients made clear there were more than a few business models being touted as the next wave to jump onto in an industry that continues to change at breakneck speed. And getting a slice of the pie was clearly evident among some catalogers as they rushed between sessions exchanging business cards. There also was talk of strategic partnerships and mergers among some smaller companies concerned about their long-term ability to survive.


However, some companies appeared more confident in letting others blaze the trail.


"We are excited about expanding our Web presence and we will be fully credit card-enabled this summer," said Marta Benson, spokeswoman for Restoration Hardware, Corte Madera, CA, "but we are all still hungry for more information. The Web is an exciting channel, but we're finding that our customers want to shop through a variety of channels. We are actually opening 30 stores this year in addition to expanding our Web presence."


Benson said that there is too much complexity involved in conducting business through a channel like the Web and that one has to become knowledgeable in any area before moving ahead.


"In due time, our management focus will become even more centered on the Web," she said. "We are currently taking about a thousand catalog requests a week from our site, which we are very pleased with. It's incremental for us -- we are going to move slowly but steadily as we improve upon what we are doing."


Frank DiGiovine, marketing manager at the Smithsonian Catalogue, Washington,


agreed. "Right now, we are here to collect data."


The Smithsonian Catalogue, which is in its 25th anniversary, mails 18 million books each year.


"The big focus at this conference has clearly been on e-commerce," DiGiovine said, "but our overall impression is that e-commerce is only an avenue -- an important one -- but only an avenue. For us, it's going to be a hand-in-hand situation. Our main focus is on our physical catalog, which has sales now running in the high $30 millions. We need to grow that number by 5 percent to 10 percent a year. The Web will be part of that, but only a part."


Harvey Morris, a spokesman at Web Promote, Chicago, said the workshops were providing level-headed analysis about integration, research and growth.


"People come here to get information," he said. "For me, the education tracks delivered pretty much what I hoped they would."


John L. Laratta, international business consultant for the U.S. Postal Service in the Chicago district, noted that catalogers still have to do basic things like get products delivered on time.


"Our catalog customers are talking about our delivery confirmation service, which lets customers know that a package has been delivered," he said, referring to the USPS' new barcoded stickering system that is putting hand-held scanners into postal carriers' hands nationwide.


No doubt, many smaller catalogers were focused on finding services like this in addition to exploring more complicated e-commerce-oriented ones. But watching out for how to protect their primary business seemed the order of the day.


It was clear, however, that many Internet-oriented companies have begun running out of the big guys to sell their services to and are staking out catalogers that aren't yet e-commerce enabled.


Shopnow.com, Seattle, which touts itself as an online yellow pages of catalogs and other e-commerce merchants, has seen its site visits jump from 225,000 a month from its October launch to 1.5 million last month. Meanwhile, e-commerce and catalog request site CatalogCity, Mountain View, CA, has seen participation from e-commerce-enabled catalogs leap from 10 a year ago to 650 today.


"Last year, we were trying to convince catalogers about the distribution power of the Web," said CatalogCity spokeswoman Misty Guerra. "This year, they know what they want. That's a huge difference.''


To be sure, many catalogers that lack brand recognition are leading the flight to online malls of directory sites. MallOfCatalogers.com, Boulder, CO, is positioning itself as a solution for those that lack an online version by posting a client's best-selling items on its site. Company president Joanne Baer said so many sites now offer multiple links to catalog sites that it needed a service to differentiate itself from the pack.


"We don't want to lose people to links, but that is what catalog clients want,'' Baer said.


<I>Staff writer Mark McLaughlin contributed to this report.<I>
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