Nothing But Catalogs Proves a Winning Formula for Publisher
Shop at Home Catalogs is basically a catalog of catalogs, listing hundreds of books for hard-core direct shoppers. Recipients pay from no charge to $5 to order listed catalogs, and the catalogers also pay Belcaro Group for leads and orders generated.
The average order amount and number of catalogs requested per order are up for the spring and early spring 2002 Shop at Home books. The average order amount is $18 to $19, and the average number of catalogs ordered is five to seven.
"All of our business is done on a per-action basis," said Marc Braunstein, president of Belcaro Group, Greenwood Village, CO. "In the case of the catalog request, the cataloger only pays us for inquiries that we provide. Our contract means we keep the consumer's catalog charge as part of our fee and we charge the cataloger 75 cents per inquiry provided. The cataloger is getting qualified names for unlimited use."
Express delivery normally carries a $2.95 charge per packet, but the current books have a free express delivery offer on the upper right corner of the covers for orders of $27 or more.
"[The offer] has helped increase the average units per order," he said.
The circulation for the spring and early spring books totaled close to 5 million, down 10 percent from last year at this time due to a "conservative" mailing strategy in response to the weak economy. The change was achieved through a reduction in prospecting. The circulation included 60 percent house file with the rest going to prospects. Last year's split was 50-50.
"We test many lists and we're using many of the same lists that catalogers use, including proven mail-order buyers, cooperative databases and outside lists," Braunstein said, adding that the number of lists used for the current books was between 40 and 50.
The page count has remained constant at 48 and there are six mailing cycles per year.
The company processed 10 million catalog requests last year, up from 6 million two years ago. Braunstein attributes much of the growth to ShopAtHome.com, which allows consumers to order catalogs online.
A program started last August allows consumers to earn rebates for online purchases made from more than 500 participating catalogers through ShopAtHomeSelect.com. The spring and early spring books, for example, offer recipients 25 percent to 30 percent back on purchases made from participating catalogers through ShopAtHomeSelect.com.
"The catalogers are willing to pay us a commission to drive customers to their sites," Braunstein said. "They pay on a cost-per-order basis and the rate card pricing paid to ShopAtHomeSelect.com is 20 percent of the merchandise order. We share a piece of that 20 percent with the consumer. We send the consumers a check on a quarterly basis."
Consumers visiting ShopAtHomeSelect.com can click through to sharperimage.com, for example, spend $100, and they will get 7 percent cash back from Belcaro Group. At Omaha Steaks, the cash back amount is 9 percent.
"The cataloger doesn't have to pay for taking orders," he said. "They are taking orders online and that is huge. [Catalogers] will tell you it costs $4 to $6 to take orders on the phone, depending on who you talk to. The cataloger can also open up a new marketing channel in which they e-mail their new customers, thus lessening their dependence on the postal service."