Why catalogs still have a hold on holiday marketing
Many retailers have turned into fourth-quarter catalogers to cash in on the season's sentimentality, while shoppers are crossing "irrelevant email marketing" off their lists this year.
A fire's blazing in the background, but it doesn't look quite as magical as the one in the catalog, which also features a few festive blankets, some cozy sweaters and two people looking like they've never been happier than with the cups of cocoa they're gingerly sipping. And suddenly, you realize you need that sweater and your sister would love one of those blankets.
At least that's how holiday catalogs are meant to work. That cookie cutter reaction might not come out of every customer a retailer mails to, but catalogs are still a highly successful channel, according to Greg Portell, a lead partner in the global consumer and retail practice of A.T. Kearney. Though there are a lot of steps for retailers looking to capitalize on the trend for the holidays, he told Retail Dive in an interview.
"It's the type of paper, it's the photography, it's the layout, it's the words I'm gonna put over here, the visuals, the size — all of those elements," Portell said of the creative process in catalog production. "The harder part is the brand positioning and, even more importantly, the consumer profiling. Because if you're starting from scratch, the first question is: Where do you get your list? Who am I going to mail it to? And that's a hard question to answer really well because I can mail it to everybody — that's always great — but it's also expensive."
"Williams Sonoma and Pottery Barn, which were once I think the most aggressive catalog companies are today among the most aggressive internet marketers. So I think you have to look at catalog and internet almost as interchangeable."
President at SiteWorks
On average, Portell says the costs come out to around 50% on postage, 25% on print and 25% on paper. In the past, many retailers produced year-round catalogs, including the famous J. Peterman Co. — which was well-known for having watercolor illustrations instead of photos — but that's slowed in recent years and retailers aren't sending out as many catalogs as they once used to, Nick Egelanian, president at SiteWorks, told Retail Dive in an interview.
"It wouldn't have been uncommon to get a Williams Sonoma catalog every couple of weeks, same with Pottery Barn and they were big catalogs," Egelanian said, noting that even for catalog-heavy companies the pace is slowing. "On the other hand, Williams Sonoma and Pottery Barn, which were once I think the most aggressive catalog companies are today among the most aggressive internet marketers. So I think you have to look at catalog and internet almost as interchangeable."
Whatever the fate of catalogs year-round, they remain a staple of the holiday season — and of many family's traditions — partly because there's a certain nostalgia to them, but also because, in many ways, it's a better marketing tool than email is.
Digital marketing has numbed shoppers
Thanks to email marketing, shoppers get inundated daily with emails from brands they like, brands they love and brands they shopped at once for their mother-in-law and never intend to purchase from again. It's not that shoppers don't enjoy getting relevant emails from their favorite brands or retailers — and some have had great success with the channel — but many marketing emails go ignored, according to a study by Yes Marketing, which found that over half (55%) of shoppers ignore them because of inbox overload, half because they're irrelevant and others because they either don't have interesting content, or don't include discounts or free shipping.
Point being: shoppers are getting a lot of messages from retailers online and that only grows over the holidays. As a result, catalogs are in some ways more personal than digital marketing methods now — and that personal touch could help retailers cut through some of the deal-based noise over the holidays. It's a problem catalogs used to have, but the pendulum has swung back in the other direction over time, Egelanian said.
"What you're trying to get when you have catalog marketing is a reason to pull consumers into your product selection — and glossy paper tends to be able to do that in a way that an email that's one of 100 doesn't really do."
Lead Partner in the Global Consumer and Retail Practice of A.T. Kearney
"It's funny because the argument and the experience is very similar to what people used to say about catalogs. People would just throw them out," Egelanian said. "Well, now you get all these emails and you filter them out — you don't have time to read them. Even though they're targeted to you directly, you become programmed to ignore them. So a catalog in your mailbox actually is a more personal touch than an email today."
Catalogs also have a completely different aim than email marketing, which lends itself to the holidays in particular. Much of holiday marketing, especially around big sales days like Black Friday, centers around pricing, but that isn't always the best way to reach customers, especially when everyone is sending out emails with discounts, coupons and sales announcements.
Amazon also looms its head at the holidays as an easy way to shop. With a relatively endless aisle feel, it's harder for retailers to compete with Amazon online, but sending out a holiday catalog can draw attention to products. Retailers have an advantage during the holidays in that shoppers want to find things to buy — and that's the type of marketing that catalogs are aimed at.
"What you're trying to get when you have catalog marketing is a reason to pull consumers into your product selection — and glossy paper tends to be able to do that in a way that an email that's one of 100 doesn't really do," Portell said.
'Tis the season for inspirational marketing
Gift-giving — from a lot of consumers during the same general time period — is one of the best presents a marketer could receive. Rarely is marketing so relevant to a consumer's life than when they really need to find a gift for someone — and that same inspiration-driven logic is behind Williams-Sonoma's holiday catalogs, according to CMO Felix Carbullido.
"The biggest shift in our catalog strategy has been creating them with the goal of providing our customers a sourcebook of ideas rather than a pure selling vehicle," Carbullido told Retail Dive in an email. "Visiting us online and in-store are great channels to get detailed information to inform a purchase decision; but the catalogs are a great medium for giving our customers' inspiration and ideas."
While marketing during the season may shift to a less transactional approach, the potential for monetary gain remains high. A study released by the National Retail Federation and Prosper Insights & Analytics noted that consumer spending would be up 4.1% this year, with holiday shoppers dishing out an average of $1,007 for the season.
Because discretionary consumption is so high during the holidays, catalogs start popping out of the woodwork to capture consumer attention — and dollars, according to Egelanian.
"When you get to Christmas, this strange thing happens. You're buying a lot of stuff that you don't need, so it's a discretionary purchase, but you're also under pressure to buy it because Christmas gifts become partially commoditized ... You've got ten gifts to buy and you've gotta buy 'em," Egelanian said.
Catalogs might be aimed at inspiration, but the hope is that the visual inspiration leads to a purchase, whether it be through the catalog, online or through a visit to the store. In that way, catalogs aren't too different from the showroom format that retailers like Bonobos rely on, according to Ken Morris, a principal at Boston Retail Partners. It's a trend he calls "catalog rooming" — where a customer uses a retailer's holiday catalog to discover products and then heads into the store to see it in person and try it on, either finishing the purchase there or coming home to buy it online.
"Some of them, they're in the red for nine months of the year and then the final three months of the year they go into the black and start to make a profit and hopefully that covers the loss."
Principal at Boston Retail Partners
It's also a way to bring customers who might not have shopped in a while back into the fold, as retailers generally send out their holiday catalogs to a broader array of shoppers than they do the rest of the year. As long as they're making $0.20 on every dollar they spend on a customer, the catalog will keep coming, Morris says — and the holidays provide more potential than the rest of the year for a big profit.
"Some of them, they're in the red for nine months of the year and then the final three months of the year they go into the black and start to make a profit and hopefully that covers the loss," Morris said, noting that depending on how sophisticated the retailer is, catalogs might also be tailored, placing a customer in one of a certain number of categories with different material in each. "It's to the demographic that I fit into because they know what I buy — they know what's in my closet, they know what's in your closet."
There's no place like catalogs for the holidays
Retailers do face hurdles when it comes to catalog creation, though. Finding a group of consumers to target, listing all the online inventory and shipping it off to a set number of shoppers isn't quite the whole process. Catalogs also serve as a brand-building tool. They cement the brand's purpose in the recipient's mind and, in some cases, in others' too.
"There's two different ways to approach the catalog," Egelanian said, calling out RH's catalog as one of the two. "They're trying to make it into a cocktail table book. So not just that it's a catalog, but it's done in a way that's designed to have you feature it in your house in a prominent place where not only you, but other people see it … Other retailers and other catalogers will only send an edited selection of what's on the website and the idea of the catalog is basically to be an advertisement, but a more personal touch advertisement."
Either way, the aim of the catalog (whether it's focused on re-positioning the brand or price-based selling), the products and even the quality of the photos, paper and the story it tells can change how shoppers view the retailer. Repeat customers, especially, are likely to notice if the quality of the catalog goes down — and Portell warns that building up brand perception is a much longer process.
"Think about the Neiman's catalog — that reinforces that 'we're a high-end retailer and we're very, very expensive and we do cool stuff.' They're not trying to actually sell you too much off of that catalog.
Lead Partner in the Global Consumer and Retail Practice of A.T. Kearney
It's not just the quality of the catalog that can change the way a customer views a given retailer, though. Carbullido notes that, while catalogs are a year-long strategy at Williams-Sonoma, they become "critical" during fall and winter, and the product categories they push change as well.
"Beginning with Halloween, we focus on highlighting decorating, entertaining, and cooking for the holidays season — including everything from sharing recipes and food recommendations for hosting Thanksgiving in the Williams Sonoma catalog, to ideas on how to decorate a beautiful Christmas tree, fireplace mantle, and centerpieces for the dining table in the Pottery Barn catalog," Carbullido said.
Shifts in the catalog marketing strategy aren't unusual — and they often differ from the approach to year-round marketing — but some retailers also use the holidays as an excuse to overstep their traditional market and start selling other products just because they fit with the story of their catalog. Portell warns against retailers straying too far from their core merchandising strategy; even if the catalog isn't aimed toward selling, it should reflect something the brand is trying to say about itself.
"Think about the Neiman's catalog — that reinforces that 'we're a high-end retailer and we're very, very expensive and we do cool stuff,'" Portell said. "They're not trying to actually sell you too much off of that catalog. The person that's going to buy the $50,000 dog house is not shopping on a catalog for it. But it creates buzz and it supports the brand. Similarly, some of the fringe catalog companies or the catalog-only companies are able to make sure that they're putting the right foot forward. If you're perceived as an inexpensive, cheap brand, having good photography and spending a little extra money on your paper isn't the worst way to do that."
For a catalog retailer, the year is full of opportunities to influence brand perception, but for the many retailers that send out one or two catalogs a year there's not a lot of room for error. But if there's any right time for a retailer to test out cataloging, a season when shoppers' minds are filled with pine trees, pie and presents is it.
To put it plainly: the holidays are sentimental, and customers are in prime condition to be swayed by the carefully crafted, nostalgic stories retailers are throwing at them. They want the sweater that woman is wearing by that fireplace and they want it wrapped in a box with a bow on top.
"You're playing on the heartstrings so to speak," Morris said of how holiday catalogs aim to influence shoppers. "They smell the fire — it brings them back to their childhood. When we were little we used to take the catalog and go through the toy list, picking out the things you wanted and leave the hints around for your parents, and I'm sure kids still do that today."
Correction: In a previous version of this article, Yes Marketing was misidentified due to a change in branding.
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