U.S. Retail Growth Depends on Catalogs, Internet, Globalization

It is no secret that many traditional U.S. retailers are feeling the pinch. These retailers have enjoyed sustained growth which has often been assisted by catalog sales growth way beyond that of their traditional retail business.

Predictions for the next five years are that catalog sales growth will be double that for retail sales. In addition, catalog sales increases should be greatly enhanced by company Web sites.

While it is true some Internet sales may come at the expense of catalog shoppers – a far greater percent of new Internet sales comes from traditional retail sales – the Web also makes existing catalog sales more efficient in many areas.

Consider, for example, the areas of data capture. Huge cost savings can be realized from traditional catalog buyers entering their own orders online. Or, in the area of customer service, buyers can go to the Web site to immediately track shipping, giving them better service and freeing up customer service staff who would normally field such inquiries.

Or, in the area of promotions, if the e-mail address of a catalog buyer is captured, early announcements of future catalogs or special offers can be sent more efficiently via e-mail than a traditional letter to increase sales response.

One shouldn’t overlook that a Web site will attract not only customers from retail and catalog areas, but also non-customers who would not be found using either of the aforementioned two channels.

It follows that if a company has a Web site, it is, indeed, accessible to potential international customers, and therefore the company would be shortsighted if it did not cater to the demand. It also follows that if a retailer gears up to accept international orders from its Web site, it should explore the possibilities of accepting overseas catalog orders, if it does not already.

Initiatives proposed by the Department of Commerce – which allow U.S. catalogers to test foreign markets for as little as $1,000 by allowing them to exhibit at major foreign trade fairs, provided at least 50 percent of the goods and services offered in the catalogs are American made – are an excellent opportunity for U.S. catalogers to dip their toes in the water with minimal expense.

Often, U.S. catalogs are successful in their ability to outshine local competition in foreign markets and subsequently lure customers away from local stores. U.S. catalogs can also attract customers from national catalogs by offering greater selection and lower prices, even after adding expensive international shipping, by taking advantage of greater U.S. economies of scale.

With harmonized international postage systems, worldwide toll-free numbers, the increased penetration of international credit cards and a plethora of U.S. companies now providing international direct marketing services, cross-border catalog direct marketing has never been easier.

Recent surveys reveal that the vast majority of U.S. retailers with catalogs that are active overseas plan on moving more marketing money to international campaigns in the future – proving that international catalog marketing works for them.

To get started overseas, other than using the aforementioned Commerce Department initiative, the least risky way is to test some of the many multinational English-speaking catalog buyer or magazine subscriber lists on the market.

Not only are the people on these lists English-speaking – we know this because they have responded to English-language offers or subscribe to English-language publications- but they also tend to have paid for something in a currency other than the local one, usually in U.S. dollars or U.K. pounds. They do this by using an international credit card and often send their response outside their own country to be fulfilled.

What the profile of these multinational buyers/subscribers means, is that U.S. retailers and catalogers can comfortably mail their U.S. mail piece overseas, without the need for expensive translations and reprints (a separate order sheet for international shipping can be included if desired).

And since you can test many countries at once – all countries go toward the same minimum- it is a very inexpensive way of testing which countries have the best demand for your product.

It is important to test as many countries as possible when going overseas, as often the best responses do not come from the major industrialized nations, such as Germany or Japan, but instead come from less-developed or smaller countries such as Jamaica or Indonesia.

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