After three years as an Internet-only retailer, home accessories and gifts marketer Uncommon Goods has received a big payback from a catalog business launched in the 2001 holiday season.
“Catalog orders accounted for half of our holiday business, and the holiday season [overall] was up 85 percent over the previous year,” said David Bolotsky, founder/CEO of the New York company. “Before we did the catalog, we had an advertising partnership with Yahoo and we used a lot of search engines to market ourselves. We found that online advertising, and specifically e-mail marketing, was not as effective as we hoped. We thought the catalog would help in reactivating lapsed customers and attracting new customers more cost-effectively.”
Though Bolotsky would not discuss reactivation numbers, sales amounts or other specific figures, he said the catalog is generating more than enough business to pay its way.
“We looked at the cost of everything and said it was worth it to do a catalog,” he said. “Now the catalog is our biggest revenue generator.”
A second catalog that mailed last month has generated 70 percent of its orders online, up from 55 percent for the holiday catalog.
“I didn't expect the number to grow as proportionately as it has,” Bolotsky said. “We've significantly reduced our operation expenses this catalog vs. the holiday catalog as a percentage of sales. It's principally been a reduction in the call center work force.”
Uncommon Goods' target demographic is college-educated females in their late 20s to early 40s with above-average incomes, which Bolotsky thinks contributes to the high percentage of catalog orders placed online.
“We are mailing to a customer base that tends to be more Internet-savvy than the general public,” he said. “We're mailing to our existing customers, many of whom first learned about us online. And when we rent lists, we'll look to select Internet buyers as a subset of purchasers.”
The catalog measures 8 3/8 by 5 3/8 inches.
“Initially, we used that size during the holidays to hold down costs,” Bolotsky said. “It seemed to work, so we stayed with it.”
For the summer catalog, Uncommon Goods increased circulation 30 percent to just under 1 million and doubled the page count to 64. Still, the cost per book rose just 20 percent, in part because of the use of recycled paper, though Bolotsky was not pleased with the results.
“The look did not seem to be as sharp or crisp as a result of using recycled paper,” he said. “We didn't use it for the holiday book, and we're looking for alternate sources of recycled paper for the next catalog.”
The average price per item is slightly lower for the summer catalog, a move that has contributed to a higher average of units per order and higher average order size.
“We've tried to put a more affordable product in the book with the average price [for items] down to $40 in the summer from between $45 and $50 in the holiday catalog,” Bolotsky said. “As a result, we've increased the average units per order to around 2.3 to 2.4 compared to two for the holiday catalog. A $65 average order is what we've realized so far. The average transaction [for the holiday book] was more like $60.”
Uncommon Goods will do one more catalog this year during the holidays.
“Our plan was initially to do three catalogs this year, but then we decided to scale it back to two because we would rather do two well instead of three rushed,” he said. “Next year I would hope to do three books.”