Direct-to-Customer Commerce

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Strategic insights into the direct commerce industry, including ecommerce, direct marketing and related fields

Are electronic catalogs an alternative to paper catalogs?

Well, frankly, I don’t know the answer to that.  But as an avid direct marketing buyer, I know I’d rather get an electronic catalog than the collection of paper catalogs I get.  And it’s not because I’m trying to save the trees.  The trees (in reality) don’t need saving.  There are more trees in North America today than there were in 1776.

Web sites are for buying.

Catalogs are for shopping.

I’ve migrated from paper trade magazines to almost all digital trade magazines.  Why not catalogs as well?

Add functionality that let’s me click on any item in the e-catalog to add it to the order form.  Or, add it to my wish list.  Or add it to my gift list.

Like most Lands End buyers, for a long time, I got a catalog every week.  Now, I get an email every day and a catalog only once per quarter or so.  I don’t think I’ve bought as much from Lands End as I used to.  I like to browse thru catalogs — I find things I had not previously thought of buying.  Sure when I need a new pair of jeans, I go to Lands End and buy them.  But there is more that I might buy, if I ran across them in a catalog.

Do you ever wonder if the staff at the largest direct marketing companies are direct marketing buyers?  I kind of doubt it because I feel like they miss what it’s like to be a customer.  And that’s why we don’t have very many electronic catalogs yet.

Maybe soon.

Filed under: Direct Commerce, Ideas, Opinion, , , , ,

The last step in direct marketing channel integration

I had lunch earlier this week with a old and tenured friend, who runs a personalized mail business.  As with many, if not most or all, direct mail production companies, his business is suffering some.

He asked me to peer into the future and tell me what I thought was going to happen to the industry.  I won’t claim that my insights are better or more predictably accurate than anyone elses, but here they are:

First, I think the efficacy of direct marketing is being publicly proven — again.  For example, as I posted earlier.  The DRTV business is growing in this economic downturn, because of the reduced price of network TV advertising.  General advertising agencies don’t have budgets from their clients to “over pay” for television time, so DRTV is proving how much stuff you can really sell over TV, rather than just advertise it.

Second, while retail sales are flat or down, ecommerce and mail-order sales are flat or increasing (this according to US Dept of Labor statistics).  Retailers continue to commit increasing resources to their ecommerce initiatives.  Chicos FAS even “replaced” their CEO because he had not devoted sufficient resources to their “direct” business, which was growing faster than any other segment.

Third, internet based retail stores are great “buying” channels, but poor “shopping” channels.  Even with ubiquitous broadband access, you cannot flip thru a web site the way you can flip thru a catalog.  Interestingly, the big catalog companies, such as LLBean and Lands End and others, continue to drive business to their web site by mailing catalogs.  And their web sites are continuing to grow as the point of origin for more and more of their total order volume.

Fourth, electronic-mail does not replace paper-mail (at least, not yet).  By all reports I’ve heard, response to email marketing is 10-20% of response to paper-mail marketing.  That means if you get 2% response to a catalog, you’ll get 0.2% response to an email effort — at best.

And even if the email marketing effort is statistically more profitable, the gross sales and net income remains dramatically lower than traditional direct marketing efforts.  So, all of these merchants who are trying to save money by shifting declining resources to electronic marketing will likely find they will have to return to a more balanced budgetary strategy.

The more difficult question is when will this rebalancing occur — almost impossible to predict.

So, here’s the question I think we need to be contemplating more:

How can we integrate the web as a response channel to paper-based direct marketing efforts, in order to document their efficacy?

And in my opinion, this integration should be more than back-matching orders to mailing files, or forcing customers to enter “source codes” from their catalog.

Let’s have a little creativity in response tracking

Filed under: Direct Commerce, Opinion, , , , , , ,

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