During the past several years, I have had the privilege of speaking before direct marketing organizations in the United States and abroad.
Initially, the subject matter was an overview of information contained in the 1999 State of the Catalog Industry Report, produced by the Direct Marketing Association in conjunction with W.A. Dean & Associates. This has led organizations to ask about the future of cataloging, especially at the dawn of the online age.
E-commerce will have the greatest impact on catalogers and, for most of them, it will be positive. However, it is obvious that while trying to survive in the new world of remote shopping, a company can no longer run its business as it did. Therefore, to help these companies, seven keys to survival in the online age were developed: merchandise, innovation, customer relationship management, branding, globalization, alliances and multi-channeling.
No one in cataloging or remote shopping today is unaware of the Internet and e-commerce. However, the Internet is more than just another channel of communication or big event in shopping. The Internet is one of the major watersheds of humankind.
A watershed event is when human history is impacted by a development that affects everything that follows. While it can be argued what constitutes a watershed event, there have been three major ones so far: the advent of agriculture, the invention of movable type and now the Internet.
What makes these three the most significant? The agricultural age dates from around 6000 B.C., starting in the Middle East and spreading from there. Agriculture allowed the feeding of many by few and, hence, the growth of villages, towns and eventually cities. It is inconceivable that a mathematician such as Euclid or the designers and engineers who built the pyramids could have done their work if they had to spend the majority of their days gathering and hunting for food. This was the beginning of human intellect.
The second watershed began in the 15th century with the first usage by Europeans of movable type, invented by the Chinese in the 11th century. Movable type coupled with the Reformation created an atmosphere that culminated in the democratization of information
The third watershed began in 1962 with the development of the Advanced Research Project Agency Network. Created by the U.S. Department of Defense after sputnik, it linked incompatible computers at research centers and universities. In the 1970s and 80s, this evolved into the Internet. For the first time in human history, the world was capable of being a global village.
You may question this as a watershed, but here’s an example. Today, English is on its way to being the only language in the world that everyone needs to know. To use the Internet, you must have command of English. No other event in the past 200 years began to achieve this change.
Whether this is good is not the issue. However, it is difficult to realize when something is at a watershed point. It is doubtful that anyone saw that in either 6000 B.C. or the 15th century. Thus, it is not surprising that most here today will miss this one.
While the ultimate impact of the Internet is unknown, there is no question that it will change the way people and businesses purchase products. The good news for catalogers is that most aspects of selling on the Internet are the same as for all remote shopping, and catalogers have most of them in place. The bad news is that competition for finite dollars is greater than ever.
There are seven keys to success in remote shopping. While some are familiar to every cataloger, some are not. The next several columns will review each point and will discuss what a cataloger must do to be successful in this new epoch. The seven survival keys are:
• Merchandising, which always will be No. 1.
• Innovation, which most catalogers fail at on the Web.
• Customer relationship management, which is more than just giving good service.
• Brand, and why most catalogers still have much to learn about using it.
• Globalization of remote shopping to every corner of the world.
• Alliances, both old and new, are more necessary than ever.
• Multichannel environment does not allow anyone to survive in a sole channel.
The first key will be discussed in next month’s column.