Special Order
By: Eric Reyes
Catalogs have made the transition to the online universe and thanks to innovative affiliate programs, the multichannel strategy is working.
News of the death of the catalog is greatly exaggerated. It's no secret that the catalog retail universe is a big one. Brands that started as paper catalogs sent in the mail go back more than 100 years to the Sears & Roebuck catalog sent to families in rural parts of the country. In its pages people could order everything from bars of soap to do-it-yourself homes delivered right to the doorstep.
Catalogs in general have gone through a sea change of sorts and nowadays the best-known ones sell mostly apparel, kitchen and bath goods, electronics and other home and gift items. Many of the brand names are nearly ubiquitous: L.L.Bean, Eddie Bauer, Chadwick's, Patagonia, Harry & David, Spiegel, The Sharper Image, Brookstone, Crate & Barrel, Hammacher Schlemmer, Pottery Barn, Williams-Sonoma, Land's End, Lillian Vernon and Victoria's Secret.
Some of these brands are, of course, multichannel marketers now – be it Web sales, catalog, physical store or telemarketing. The printed catalog may be how the brand is recognized, but it's the various channels that keep sales humming.
In fact, multichannel marketers are very big participants in the $2 trillion U.S. retail market, according to the Direct Marketing Association (DMA). About 40 percent of retailers sell through three or more channels, 42 percent through two. That's almost a quarter of all retail sales generated through direct marketing efforts and that direct mail (such as paper catalogs) accounts for half of that revenue, according to the DMA.
SMOOTH TRANSITION
When e-commerce came along many predicted that the pick-up-the-phone-and-order-from-a-paper-catalog model would die out. It hasn't and is in fact thriving, especially as affiliates for these catalog businesses do extremely well.
Like the overall affiliate cosmos, the top 20 percent of affiliates for catalog retailers bring in the heaviest sales. Contrary to their fears, catalogers, as they are known, have transferred the catalog model to the Web rather well.
Online catalog and call center revenues reached $9.87 billion last year, and online sales through retail chains brought in $27.75 billion in 2005, according to Internet Retailer. Eighty-two percent of multichannel retailers who have a catalog component run profitable Web operations, according to Internet Retailer/WebSurveyor. This is actually ahead of the virtual-only merchants – only 75 percent of them are profitable.
Contrary to what might be suspected, the Web presence does not take away from the overall catalog brand. All catalogers believe in e-commerce, says Chris Henger, vice president of affiliate marketing at Performics. He says the days of catalogs asking if they should invest in the Web are over. "There may not yet be best practices in what channels get the credit for sales, but they are learning. Sending a catalog is a tremendous vehicle and so what better time to be omnipresent with an interactive message," says Henger.
Performics manages affiliate marketing programs for more than 300 advertisers, including more than 100 catalogers. Catalogers are kind of its specialty, he says. Some of its top catalog clients include Blair, Cabela's, Eddie Bauer, Brylane, Chadwick's, Patagonia, L.L.Bean, Harry & David, Spiegel, Newport News, Sears, and Sportsman's Guide.
According to Henger, the message from consumers is loud and clear: The customer needs to touch the brand the way it wants to – whether that is on the Web, over the phone or walking into a store. The good news is that those channels all help each other.
"Customers are seeing growing sales on the Web – 30 to 60 percent of sales," Henger says. "They have all come to the conclusion that [mailing] catalogs is not going to go away. It builds brand equity and there is a balance to the push and pull."
Others agree.
"Going online in general has benefited us greatly," Chris Park, affiliate and partnerships manager at Blair, the men's and women's apparel seller, says. "We may drop catalogs all the time and [customers] may look at a catalog a few times but they go to the website many times."
TEAMWORK
He says there's really no choice anymore: The print catalog and online have to work together. Many customers look through the catalog and then come online when it's time to buy, Park says. Blair can then promote a $0.99 shipping offer once customers come to the website.
Some catalogers take the time to look at the affiliates themselves and measure their value in a more granular way instead of just heaping together all affiliates into one category.
"Before we were just looking at the sale and now we are looking at the affiliates themselves and putting them in different buckets," Park says.
Knowing so much of their sales are now attached to the Web and by extension, affiliates, some catalogers believe they need to go the extra yard for their earners. Brad Sockloff, vice president of e-commerce at Lillian Vernon, says he works personally with top affiliates every day.
"We do special promotions with the top 20 percent and we do monthly meetings with them," he says. The top earners get to know when Lillian Vernon has overstocks prior to the holiday season. "Why sit on it for another year?" Sockloff says. The company also produces a newsletter exclusively for affiliates.
Lillian Vernon additionally has a link to find out about their affiliate program prominently displayed on their home page, as does Brookstone, The Sharper Image, Eddie Bauer, Hammacher Schlemmer, and Chadwick's of Boston. None of that personalization is too surprising from Lillian Vernon, who markets gifts, housewares, gardening, seasonal and children's products among other gift-related items – most of which can be personalized with a name or monogram.
As far as helping affiliates, you might not get any better than at Sierra Trading Post. They were named Innovative Merchant of the Year by LinkShare in 2005. The tools on the company's site to help affiliates are plenty, more so than most of the other cataloger affiliate Web areas. Sierra has available on its site an extensive guide for affiliates, website templates in three different styles, a product data feed and tools for easier product showcasing on your site. In beta are two new tools: Synonymizer, for maintaining your search engine rankings even with a data feed; and Linkwrapper, an automated linking tool.
Justin Johnson, affiliate manager at Sierra Trading Post, says if he makes the affiliate's job easier they will make more money. "Help them fill the hole," he says. "Data feed sites give visitors a good idea what they are looking for and we automate some of that for those that don't know. Continued on Page 2...
Tags:
online catalog, catalogs, affiliate programs, multichannel,
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