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Retailers of All Stripes Flock to Catalogs

Expect to see numerous catalog launches in the next six months as various industry sectors discover the power of reaching their customers through multiple channels, according to several catalog watchdogs.

“Companies are realizing that direct marketing has to be a part of their core competencies,” said Lois Boyle, president of direct marketing agency J. Schmid & Assoc. She predicted a shortage of experienced catalog talent in the coming months as the newcomers to the DM field look to catch up fast by hiring catalog veterans.

One obvious example of this trend is retailers, which have been developing their own catalogs at a furious pace lately. Home Depot, Target, Wal-Mart and Pier 1 all launched titles in the past 12 to 18 months. These companies are also in the market to acquire catalog firms, which was made clear last month when Home Depot acquired Home Decorators Collection.

“I was shocked to read that,” Ms. Boyle said, because Home Decorators had been an independent company for so long.

It’s not just big-box retailers that are smitten with catalogs.

“Higher-end retailers are really going full throttle using catalogs because they see them as more than a sales tool but also as a driver for store and Internet sales,” said James Treis, executive vice president of sales and marketing at catalog printer Arandell.

Gump’s, for example, relaunched its catalog this month and raised its circulation rates both last year and this year. The goal is to have the catalog better reflect the upscale Gump’s retail emporium in San Francisco while increasing catalog and Internet sales.

More manufacturers are discovering direct marketing as well, Ms. Boyle said. Hasbro, for example, started a direct-to-consumer catalog in March. The mailing list was compiled completely in-house as the names were gathered on Hasbro’s Web site as well as on its 80 other pure-play sites for various brands when consumers registered and signed up to receive information from the company.

“I’m seeing some companies getting into cataloging that never realized that they had a list,” Mr. Treis said. The automotive and marine industries, for example, have huge databases built from warranties that have been sitting in a drawer for years. “Now they’re realizing there is a huge opportunity to prospect a current or past customer with a catalog.”

Party plan businesses are another segment increasingly enticed by catalogs, Ms. Boyle said. Kelly’s Kids, for example, sells high-end children’s clothing in people’s homes and started a catalog in November.

As for experienced catalogers, they are taking multiple strikes at the same customer more often.

“Catalogers are honing in on who their true customer is and the needs and wants of that true customer,” Mr. Treis said, thanks to more sophisticated analytics. As a result, circulation rates for individual catalogs are down but companies are prospecting more and diversifying with new titles that meet previously untapped needs and wants of the same customer, he continued.

Examples include Restoration Hardware’s recent launch of Restoration Hardware Outdoor, featuring outdoor furniture, and Redcats USA’s introduction last year of Intimate Promise, a catalog featuring lingerie and casual sleepwear for plus-size women, the company’s core customer.

“People are realizing they might have another merchandising opportunity and are building another catalog around that,” Ms. Boyle said, in order to leverage their list of names. She cited Franklin Covey’s launch of Insightful Designs by Franklin Covey, which offers a more fashionable take on the brand’s usually functional planning tools.

The other trend that Ms. Boyle sees is that catalogers are adding mailings instead of pages.

“We’re realizing more and more that the role of the catalog is to keep the brand top of mind, so the more taps on the shoulder we can make efficiently, the better,” she said.

However, another trend could threaten the catalog market’s health: a lack of originality in merchandise.

“If you look at all of the catalogs coming in lately, especially furnishings and hard goods, there’s a huge proliferation of people trying to sell the same products,” said Bill LaPierre, Millard Group Inc.’s vice president of catalog brokerage. He cited recent issues of Orvis Home, Ballard Designs Outdoor Living, Home Depot’s 10 Crescent Lane, Sporty’s Preferred Living, Lands’ End, Brookstone Hard to Find Tools and Home Decorators Collection, which all feature wooden outdoor furniture on their covers.

“Most catalogers are doing a good job of trying to have unique merchandise for the holidays, but the rest of the year there’s a lack of originality,” Mr. LaPierre said.

Such sameness means consumers start to lose brand loyalty, which is why they increasingly shop for individual products using a search engine instead of going directly to a brand’s Web site, he continued.

“Then the consumer becomes price conscious and might actually buy the product that they originally spotted in your catalog on eBay,” he said.

Mr. LaPierre also predicted catalogers will reduce circulation rates in August and September this year as they emphasize December mailings. Of course, last year’s poor results at the end of the summer were a consequence of the devastating hurricane season and skyrocketing gas prices, but many companies will forget that, he said.

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