The older and more formidable brother of direct mail, catalogs, have a longstanding history of encouraging sales and bolstering top-line growth. A physical “homepage,” if you will, catalog marketing has always connected prospects/current customers with the different offerings available to them—playing off the charm of tangible, traditional media as well as the depth of a visually compelling long-form content.
But it hasn’t always been easy for catalogs to be incorporated in the marketing mix. Throughout the years of rising postage, and against the macro landscape/battle between print and digital in general, catalogs have faced some of the same headwinds affecting DM.
Fast forward 8 years later, however, catalogs are rebounding—so much in fact, the USPS is rumored to have a rate relief for catalogers to be implemented as early as 2017. With the massive improvements in technology, a recovering economy and the USPS’s big push to incentivize the use of direct mail in general, it may be the appropriate time for incorporating catalogs into your direct marketing mix.
As if the macro issues weren’t enough to discourage catalog marketing, the USPS has steadily increased catalog mailing rates over the last decade. This situation came to a head when the Flats Sequencing System (FSS) was initiated. The FSS “employed expensive new machines intended to make flats processing more efficient. Instead, it did the opposite,” (DMN). However, there is word that USPS intends to eliminate the FSS price cells in 2017; which could prove very helpful for many brands engaged in catalog marketing.
If all goes as planned, the Postal Service “will raise the piece per pound threshold for using FSS, allowing catalogers to add more pages to their books or use higher-weight paper. It will also remove FSS pricing that was put into play in 2015 and return to 2014 pricing strategy for the category,” (DMN). While the original goal of the FSS was to increase the volume of mail, it showed that the rate and processing costs made catalogers move away from FSS options and actually decreased the volume of mail.
While the final decision of these changes are decided upon by the Board of Governors and professional research consultants, USPS has neither confirmed nor denied this plan to lower fees just yet. In an ideal world, the lower pricing will encourage companies to take full advantage of leveraging catalogs in direct mail marketing. Fingers crossed that the prices do lower so that companies can fully optimize all the advantages of sending catalogs.
In a world where just about every store, brand, or product has a website, one might think that catalogs for such things are becoming obsolete. However, studies show that catalog mailings have actually grown considerably (Harvard Business Review).
The reasons catalogs still work in a predominantly digital world is because people appreciate the novelty of holding something in their hands that doesn’t have a screen attached to it. It’s almost nostalgic for some people (like holding a regular book and not an ebook).
“Catalogs provide a tactile and visual experience that can’t be equaled by digital media. Catalogs don’t really sell products, they jumpstart the idea process that leads to purchasing decisions. It’s storytelling at its finest.”
Cultivate Communications
Therefore, catalogs not only increase brand awareness, but compel different sensory elements from unsuspecting consumers. Think about it, when you’re at a doctor’s office or in someone’s house—what’s sprawled out on the coffee table in front of you? Magazines and catalogs. If your catalog is visually appealing and full of good content—it gets put out on display. Regardless of whether or not someone is going through every single page in your catalog, they now have familiarity with your brand, and may choose to go look up the website.
Catalogs have proven to be driving forces in both acquisition and retention. According to Xerox, more than half of consumers (57%) prefer printed catalogs over digital or electronic catalogs. Additionally, there is a 4.3% response rate to catalogs over the 3.7% to direct mail, 0.2% to email, and 0.02% to display advertising. On average, people read catalogs for 30 minutes, that means that in those 30 minutes, your brand and the message of your brand is consistently being displayed. People then begin to understand what your company stands for, what the advantages of investing in your brand are, and how both aspects fit into their lifestyle.
Generally speaking, printed content also registers differently in consumer’s brains. Studies have shown that printed content leaves a longer impression on a consumer than digital content does. The most recent study was performed by Canadian neuromarketing firm, TrueImpact, and sponsored by Canada Post. According to the report: Physical material is more “real” to the brain. It has a meaning, and a place. It is better connected to memory because it engages with its spatial memory networks.
Another study conducted by Temple University “used fMRI brain scans to compare digital and paper.” The results of this study showed that the paper form of advertising activated the ventral striatum, which is an indicator of desire and valuation.
At this point, we know catalogs' effectiveness lies within their tactile nature and ability to engage and inform… But what do the numbers say?
Marketplace points that, “every dollar that someone spends for the production of a catalog, they expect to generate at least $4 of additional sales revenues.”
In fact, catalog marketing has a tendency to become ingrained heavily into a marketing mix; there have been instances of companies actually losing money after reducing catalog pieces within campaigns.
Case in point, the company Lands’ End had a hellish marketing experience when they reduced the number of catalogs they sent to customers, amounting to a $100 million drop in sales. Seeking clarity, Lands’ End “added a pop-up survey to its website and found that 75 percent of customers who were making purchases had first reviewed the catalog as the main acquisition and arguably the most important “touch” with the brand”.
A DMA study in 2015 showed that 59% of multichannel marketers increased their catalog circulation from the year before. Data also shows that mostly every industry is increasing the volume of catalogs they mail out yearly since 2014. According to Paul Miller, vice president of the American Catalog Mailers Association, this is because “catalogs offer something to retailers that the Internet can’t: customer loyalty. There have been studies that have shown that if somebody purchases an item online, they’re much less likely to be a loyal customer than if they purchase something as a result of seeing it in a catalog.”
Within the last few months, many retail companies have announced that they would be bringing back their catalogs. In an economy that runs on multi-channel shopping and purchasing, customers who utilize more than one channel are the most valuable. “Nordstrom reports that customers who have a multi-channel relationship with the brand spend four times as much as those who do not. Bonobos shares similar results, with Craig Elbert, vice president of marketing, reporting that 20% of the website’s first-time customers are placing their orders after having received a catalog and are spending one and a half times as much as new shoppers who didn’t receive a catalog first,”.
As catalogs slowly, but surely regain their footing in the marketing mix, marketers everywhere are asking the big question: what’s next for these physical pieces of long-form content?
Savvy marketers (and especially those of the direct variety) have witnessed a resurgence of traditional media over the last decade or so. Within that time, technology (in particular data analytics) have been leveraged within print equipment, ending the era of “spray and pray” direct mail and instead, shifting gears to fully customized, one-to-one messages—from copy to components.
And as 4-C variable data printing becomes the industry standard, new format applications are being tested and refined.
Taking cues from direct mail’s insertion processes (based on value of segments), the primary benefit behind custom catalogs lies in the ability to swap out page count on the fly and fully depend on the data driving the decision, i.e. a high value target might not need a full 16-page catalog, instead they might be better served with 8 pages.
In addition, the implementation of segments based on both perceived and actual preferences can ensure that every catalog sent will be speaking in the most relevant way for the consumer and the most cost-effective way for the marketer; effectively bridging the gap between consumer and company.