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The primary reason for failure in catalog marketing is the lack of a coherent merchandising strategy. Marketers new to catalog marketing should also remember that merchandising a catalog is not the same as merchandising a store or an Internet retail(e-Commerce) site.
50 to 70% of the catalogs success depends on the product!
Catalog Merchandising Involves
- Developing the merchandising concept and mix
- Having in place the supporting merchandising organization
- Planning pagination and navigation of merchandise throughout the catalog
- Selecting the appropriate merchandise categories
- Establishing product pricing
- Planning space utilization
- Determining product revenue and profitability contribution
Attributes of a Successful Catalog Merchandising Concept
- Unique and special - The merchandise collection gives the impression that the particular product assortment cannot be found anywhere else.
- Targeted - The audience can be broad (teens) or specific (Corvette owners), but the concept must target a definable audience large enough to support growth.
- Authoritative - Customers believe you are an expert and that you have sought out the best products that will support the merchandise concept and suit their needs.
- Expandable - The concept must have the ability to expand into several categories, offering customers additional reasons to buy. A concept that is too narrow will limit buying potential and ultimately hurt retention.
Communicating Your Catalog Merchandising Concept
Communicate and reinforce your unique selling concept at every customer touch point. This includes not only your catalog but also your Website, the order telephone call, even the box in which the product arrives.
The covers — front and back — need to consistently present your merchandise concept through the use of product images and taglines. Products that appear on your covers must indicate your unique selling proposition; ideally they would be items with price points and within categories that are already proven winners. A tagline is crucial, especially if you are a new or "unknown" catalog; it should clearly state your unique selling proposition and be presented alongside your logo.
Use key hot spots within your catalog (and on your Website) to again tell your story. Reinforce your story in the opening letter, the guarantee, the product copy and even the headlines. If your concept focuses on quality, tell how you achieve quality. If it's a price-competitive story, give readers price comparisons. On your Website, you could reiterate your concept on key landing pages with a succinct tagline, a short description or a product image that exemplifies your concept. Place descriptive copy within a constant sidebar so that visitors will always have access to your story.
Use catalog spreads to create stories that reinforce your merchandise concept. Spreads created with a story convey your concept as well as build intrigue, pulling readers in and, thus, getting them involved. Stories pull products together. Some examples that catalogs use to create stories on spreads include:
- Price-point stories such as a sale or a good-better-best cost comparison
- A "how to" story in which you offer everything readers need to decorate a room or install a car stereo
- A creative presentation in which everything on the page shares the same design elements (Christmas trees, for instance, or red-and-green plaid).
Use relevant "sidebars" or editorial copy that proves that you are an authority. For example, Una Alla Volta ("One of a Kind" in Italian) (http://www.unoallavolta.com/) does not sell just jewelry, collectibles, and other gifts. The cataloger / multi-channel merchant sells a unique story of handcrafted gifts and art pieces from around the world with the use of editorial sidebars positioned on almost every page. It follows the same practice on the Web, by including a "Product Story" box that is scrollable. By telling customers where and how the products were made, the sidebars enable customers to appreciate the depth of the cataloger's knowledge as well as to "experience" the merchandise.
Reinforce your concept in less-than-obvious locations. Customers are accustomed to looking for messages in certain spots — the front cover, page 2, the back cover — but reiterating the message in other, less noticeable places, such as on the order form or in the table of contents, can be effective too. Or consider running that message in the catalog footer next to the phone number or the Web address. Catalogers also have an opportunity to reinforce their merchandise concept in the shipment box. Voler (http://www.voler.com), a manufacturer and catalog that sells American manufactured and custom bicycling apparel, includes product care and manufacturing information in their shipping packages.
At the product level, use every graphic tool available to sell a concept, not just a single product. For instance, when Williams-Sonoma (http://www.willams-sonoma.com) sells a food processor that its competitors might also sell, the marketer romances it with a recipe to complement its special positioning.
Catalog Merchandising Strategies
- Maintain or improve product quality
- Work on reducing cost of goods while accomplishing #1
- Continue and strengthen new product efforts
- Listen to your customer. Research who your customers are and what their needs are
- Let your product analysis drive your merchandise mix
Catalog Merchandising Challenges
The primary reason for failure in catalog is the lack of a coherent merchandising strategy.
The challenge catalog marketers face is to develop a merchandising strategy whose goal is not merely to find more profitable product for a program, but, rather to maximize the profit per program and support a marketing strategy aimed at developing and expanding an ongoing business
To determine the size of the program the marketer must calculate the optimum number of pages of merchandise or product offers in their program that will generate the largest profit and sales.
Catalog Merchandise Leadership
A successful catalog needs to strive to obtain leadership and dominance in the marketplace and lead in one of the following categories.
- Merchandising leadership can be obtained by
- Offering the best products
- Offering the best values
- Offering the lowest prices on acceptable quality merchandise
- Offering exclusive or hard-to-find products
- Offering the best selection of products
Catalog Lead Product Strategy
Every cataloger needs a lead with product strategy. It is not possible to lead in all categories, so the catalog marketer should develop a "lead-product strategy". The catalog marketer should try to become dominant in one category of merchandise that will attract customers who will buy not only this merchandise, but other products. This concept is effective only if the primary product category is desired by a broad segment of the buyer. The lead product cannot carry the business but it should be the focus of the business. The catalog marketer must not focus so much on this product category that it fails to develop other product groups.
Catalog Merchandise Selection Factors
The following factors should be considered in selecting and developing products for a catalog:
- Exclusivity and image
- Product gross margins
- Timeliness of merchandise
- Potential market size
- Print media translation
- Potential legal problems
- Product safety
- Supplier dependability
- Reorder potential - backup merchandise availability
- Price points
- Product features and product information
- Promotion orientation
- Refurbishing costs
- Returns factor
- Vendor restocking charges for returned merchandise
- Vendor co-op advertising support
- Packaging attractiveness
- Easy to understand
- Operating / assembly instructions
- Operating / assembly difficulties
- Economical to ship
- Stock keeping headaches
- Availability – delivery lead times
- Complimentary nature of merchandise
- Comparison with competitive products
- Potential for add-ons sales
- Prior history or testing
- Cross-salability – encourages sales of other products
- Mix fact – too much of one classification
Catalog Merchandise Pricing
You don’t have to be the cheapest, but your pricing has to offer value in the customer’s mind. Bundling products in sets or packages can obfuscate individual item pricing which may be highly competitive and/or price sensitive. Lower ticket products will require higher markups than higher priced products because of the lower margin dollars (not % but $’s).