Merchandising credited with catalog survival

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Quarterly catalog TouchStone has thrived in the competitive home décor category where others have failed or been acquired thanks, in part, to its unwavering focus on merchandising.

There was a time when shopping for home décor was limited to a handful of catalogs. However, an explosion of entrants over the past two decades has included catalogs from such well-known brands as Pottery Barn, Ballard Designs, Plough & Hearth, Home Depot and Pier 1.

"I like to think that there's room for us all," said Sarah Luce, CEO/founder of TouchStone, Atlanta.

Ms. Luce was a commercial interior designer before she founded TouchStone in 1989. While it does concern her that some smaller home décor titles have gone out of business, TouchStone remains focused on trying to build on its unique strengths.

One of those strengths is the company's commitment to merchandising, including offering a mix of French country-inspired home accents and tabletop items.

"Here is a company that doesn't have the market intelligence that bigger players do and is holding its own and not losing market share with this one title and it's doing it because Ms. Luce and the merchandising team have their ear to what the customer is buying," said Monica C. Smith, president/CEO of Marketsmith, Morristown, NJ, a marketing and circulation consultancy that works with TouchStone.

The catalog has seen the average order size increase by $30 over the past 18 months following the introduction of "relational selling."

"We're trying to develop a decorating concept so that the customer can envision a major solution within one shot," Ms. Smith said.

Instead of buying just one item at a time, customers are buying several items from the same photograph because it presents a cohesive theme.

Still, there have been some missteps along the way. When Ms. Luce was starting out and intent on launching a niche business, her initial idea was to have a catalog of U.S.-made, historic reproductions.

"I soon found this was not going to work," she said, adding that the parameters were too limiting.

Still, the catalog continued to have a traditional feel in its early years. By the mid-90s, it became apparent that TouchStone's customers were reaching a stage in life when they were no longer interested in acquiring new items for their homes.

This is when Ms. Luce and the merchandising team made a decision that helped keep the book in the game. Instead of continuing to target the same customers, TouchStone would go after their daughters.

The change wasn't a drastic one but more of an evolution as new looks and styles were added to attract different age groups.

"It takes about two to three years to go through that evolution and feel like the house list is supporting you and you're still prospecting effectively," Ms. Luce said.

However, on the heels of that challenge came another: the proliferation of home décor catalogs.

There are about 98 companies participating in the home décor catalog category today, Ms. Smith said. All that competition is making even some of the big names squirm.

Williams-Sonoma recently said that same-store sales for its Pottery Barn brand declined 5.3 percent for the fourth quarter ended Jan. 28, and that revitalizing the brand is its highest priority this year. Home Depot has also been faced with challenges, folding two catalogs - 10 Crescent Lane and Paces Trading Company - in the fall, a year after launching them.

"When TouchStone started to feel sales being challenged, it adapted by not doing what everybody else was doing but by going out and searching for product where it was first to market," Ms. Smith said.

TouchStone works closely with vendors, looking for opportunities to develop a product from scratch or take existing items and change them slightly to better meet the needs of the TouchStone customer.

"The product development part is a lot of fun," Ms. Luce said, adding that it has grown to be an increasingly important strategy since TouchStone first dabbled in it nine years ago.

Another element that differentiates the TouchStone catalog is its product shots, said merchandise manager Terri Ruda, who joined TouchStone in 2000 after spending several years with a larger home décor cataloger.

"We try to romance every shot," Ms. Ruda said. "Having a merchant there really helps our shots stand out against our competition."

Ms. Ruda is at every photo shoot. This is different from her experience with bigger companies, where the merchandise team would give directions for the photographs but not attend the actual shoot.

Still another difference is how much more analytical a smaller cataloger can be, Ms. Ruda said. If an item produces what seems to be good sales but not enough to pay for its space in the catalog, it will be dropped.

"When you're with a bigger company, you're running so fast that you never get down to square-inch analyses," she said. "[At TouchStone] we live and breathe square-inch analyses."

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