At this time of year, it’s traditional for commentators to summarize what has happened over the past year and attempt to predict the future. This year, since it is or isn’t the end of one millennium and the beginning of another, depending on your point of view, this has been expanded to reviewing the past 100 years.
Without further adieu, here is my list of what are the major impacts – positive and negative – to hit cataloging since Jan. 1, 1900.
During the first half of this century, retailing was dominated by the growth of department stores and centralized shopping. In the business-to-business field, this period saw the growth of the sales force to be the leader of the company. Cataloging actually grew dramatically during this period, but it was primarily consumer cataloging and, like the retail scene, the giants such as Montgomery Wards, Sears, Spiegels, National Bella-Hess and Aldens dominated.
There were a few specialty catalogs, most notably L.L. Bean, but even that company was very small by the end of World War II, with annual sales of less than $5 million – vs. the giants with sales exceeding several hundred million each. The lack of small firms was caused by the great difficulties in finding customers without large advertising budgets.
With the return of veterans from the war, retailing was hit by the development of suburbs and the growth of the shopping mall. However, some of the veterans did not want to go to work for a large corporation in a large city. Rather they wanted the quality of life offered by living in more bucolic areas.
Unfortunately, most of these rural places did not offer many livelihood opportunities, so some veterans started catalogs such as Carrol Reed (Carrol Reed Catalog), Bill Levy (Yield House) and Karl Lipsky (Jennifer House, which is the forerunner of J. Jill). However, because of their inability to build and maintain databases inexpensively, these companies didn’t really begin to grow until after 1970. However, giants like Sears, which could capitalize on its inhouse credit system, did grow, reaching sales of close to $2 billion by the end of the 1960s.
At the same time, the industries saw the development of brand marketing – whether for a cereal or an office machine – lead to the ascendancy of marketing over sales as the guiding force within the company. However, because of rising costs and breadth of offerings, companies began to use their catalogs as sales channels as well as an advertising tool.
This period saw the explosion of cataloging as a way to shop. In the consumer segment, this was fueled by the convergence of several things around 1970. However, the ’60s saw the development of a number of critical elements: The 800 phone system was started, although hardly used for several years, and the IBM 38, a computer whose price was within reach for many small companies, was developed. Also, there was the implementation of the bank credit card, which allowed small companies to offer credit; the rise of UPS as the carrier of small packages to residents; and the rush of women into the workplace, which created a demand for convenience in shopping.
Cataloging even started to get the attention of the media and saw the growth of specialty companies like Lands’ End, Fingerhut and Harry and David, while the giants like Wards, Aldens and Bella-Hess either hung on by their fingertips or disappeared.
At the same time, business cataloging really began to emerge as a primary method of selling, especially for orders under $1,000. The escalating cost of a sales call forced many companies to service no one but their largest accounts in person. Therefore, they began to use their catalogs as a selling channel as well as an advertisement. They adopted many of the techniques of consumer catalogers such as mailing smaller versions of their catalog featuring key items and categories – rather than the full line – in between the publication of their main books. Thus, they sent out sale catalogs to move inventory and increase sales.
This era might be seen by some as the glory years of cataloging when almost every company grew and the industry became a favorite topic in the media most of the time. Moreover, because of time pressures and the convenience of catalogs, this channel became the favorite shopping venue for many people, especially among higher-income groups.
In 1998, the U.S. Postal Service enacted its largest increase ever for Third-Class mail, almost 45 percent. Coupling this with the economy, inflation and an over population of catalogs, the consumer segment had its first major shock. Over the next 12 years, we saw additional increases in the cost of producing and distributing catalogs that raised the cost per book in the mail by almost 60 percent from pre-1988. However, there were some saviors such as the advent of cooperative databases, improvements in printing technologies that almost eliminated the chance of a poor print job and overnight delivery of packages.
During this same period, business cataloging took off, and its sales are projected to soar within a short time. This shift had several influences: The pushing by many companies of purchasing decisions out to the end-user, resulting in smaller orders and the development of order transmissions that sped up the process allowed for just-in-time inventories. Initially, we were offered the fax and later the Internet.
The 20th Century
It was these events that shaped the process of cataloging into what we have today. Undoubtedly, there will be some that think that other events should have been included, but these are the major factors over the past 100 years.
Thus, as we roll over into the next millennium, we see consumer cataloging as either on the verge of another explosion in growth, due to the Internet, or extinction, depending upon your point of view. As for business catalogers, they should have no reason to feel other than that their opportunities are nearly unlimited. For both segments of cataloging, it will depend upon whether or not the individual company can develop a strategy that will allow it to take advantage of the potential and power of the Net.
Next month, I’ll go out on the predictive limb and give my opinion of what we’ll see in cataloging over the next 10 years.
Bill Dean is president of W.A. Dean & Associates, San Francisco, which publishes The Dean Report monthly. His e-mail address is [email protected]