Navigate 2007 catalog challenges
Catalogers are at a unique inflection point. Over the past hundred years, catalogers adapted to a number of changes, frequently coming out stronger than before. But in 2007, a series of forces are occurring at the same time providing catalogers with a unique set of challenges.
First, postal reform put the industry in a place of significant discomfort. Catalogers have always been good at adapting to increases in the expense structure of the industry. This change in the expense structure has the potential to fundamentally change cataloging. The natural instinct may be to reduce circulation, mailing fewer catalogs to prospects. By doing so, we manage our expense budget. For some businesses, this strategy will result in a 30 percent reduction in long-term catalog sales, as catalog businesses are starving for new customers.
Second, the marketing digital divide is fundamentally changing how businesses and customers interact with each other. Some folks call this Web 2.0. I believe it goes beyond this generic term for catalogers. Numerous businesses are using online direct marketing to grow rapidly. Cataloging is not part of their marketing arsenal. Businesses such as Zappos, Blue Nile, Endless and Piperlime are leveraging online marketing techniques coupled with free shipping to drive customers to their Web sites. Ten years ago, it would have been unthinkable for a direct-to-consumer business to drive a half-billion dollars in annual sales without putting paper in the mail. Today, Zappos achieves sales increases using techniques that barely existed a decade ago.
And this is where the industry must have a strategic response. The longer catalogers focus on adjusting to increases in postage, the better online marketers become at honing their craft, at wooing customers. If catalogers reduce prospecting to minimize expense, clients will have no choice but to search online for products and services. If we reduce prospecting efforts, we give the customer the opportunity to find what they are looking for, coupled with free shipping and no sales tax.
2007 needs to be the year of experimentation. Catalogers need to further explore online marketing as a viable marketing channel. Think ahead to a day when postage becomes more prohibitive. Begin jumping across the marketing digital divide, fully practicing online marketing as a complementary form of direct marketing. Blogging, podcasting, RSS feeds, personalized and segmented e-mail campaigns, paid search, natural search, affiliates, portals, you name it; it is time to start experimenting with these advertising channels now. Catalogers have always been great storytellers. Online marketing is still largely void of the ability to tell stories. Catalogers have a rare opportunity to merge traditional paper-based storytelling with the latest online marketing techniques.