European Firms to Steal U.S. Catalogers' Market Share

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Is this headline a rash statement? Paranoid thinking? Maybe, maybe not. Everywhere you read, there's talk about the great potential for U.S. mail-order companies to enter Europe. You hear about how Europeans love American products and the growing number of companies seeing success. After all, it's a huge market, soon to be improved for direct marketing with a single united currency.


That's all true and good. In fact, the majority of U.S. mail-order companies don't realize the opportunities there are in Europe, and for some reason they're putting off learning until a later date. This will prove disastrous. What really seems to be missing in all this is the opposite fact: While we're looking at the European market, we're blinded that Europeans see the United States as a mighty fine market opportunity. So good in fact that European companies are buying data on the U.S. mail-order market like I've never seen before.


In the last 12 months, the NMOA's International consulting services are at an all-time high; the clients: European direct marketers. Orders for "The Guide to Mail Order Sales" covering the United States is also booming. Orders from Europe that come into NMOA for this data is more than three times the amount of those from U.S. companies requesting European mail-order data. It's clear that European mail-order companies are gathering marketing intelligence on the U.S. market for one reason ... to plan their attack.


And it makes perfect sense. Look at it from their point of view. Our market is also huge. We have great delivery services. We have one single currency. We basically speak the same language. Our economy is good. We also have money to spend, and we have easily accessible mailing lists segmented down to a gnat's eyebrow. In fact, Europeans will have an easier time coming here than we will have going there. Another advantage is that many of them already have a catalog written in English. Granted it's UK English, but the needed modifications will be minimal.


When will this invasion begin? It's happening now. In the next 12 months, operations will be set up in the United States by at least five European mail-order companies, and more will be coming in the near future. Another point to consider is that there is big money in Europe, and they have a good supply of venture capitalists looking for things to invest in. Unlike U.S. venture capitalists, Europeans aren't afraid of taking chances on mail-order start-ups or expansions.


What should we do? The starting point is fairly simple: education and action. Learn all you can about the mail-order marketplace in Europe and who the key catalogs are. Study their catalogs and see what's selling and how it's sold. Order information from service providers across Europe. Look into testing your products with a combi-catalog strategy like the one being put together by Fortress Europe. Look into possible partnerships with European mail-order companies.


When it comes down to it, will you be one to act now and put yourself in the way of opportunity or one to react later -- when it may be too late? By 2002, the Euro will be in full use all over Europe. Centralized bilingual call centers are already set up; European distribution of mail and parcel delivery is already good and will continue to improve.


European catalogs will become bigger and more powerful, and they will enter the U.S. market ... your market. Consider yourself warned.


John Schulte is chairman of the National Mail Order Association, Minneapolis. His e-mail address is schulte@nmoa.org.
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