January 4, 2006, 12:00 AM

Replacing Paper

E-catalogs attract new online shoppers—or are redundant in a web world. Retailers debate their merits.

With 22 e-catalogs deployed across its eight brands in the U.S., direct marketer Redcats USA is looking to spread e-catalog functionality into its international operations. Meanwhile, lifestyle merchant Williams-Sonoma Inc. dismantled the virtual catalogs it had earlier launched for brands Williams-Sonoma and Pottery Barn Teens and in the future, expects to take down the e-catalog now up online for new brand Williams-Sonoma Home.

Redcats and Williams-Sonoma Inc. derive not-dissimilar revenues from their online channel-$401 million for Williams-Sonoma and $477 million for Redcats in 2004. Each is satisfied with the e-catalog technology vendor, and each is equally satisfied it’s made the right decision regarding e-catalogs. But those decisions are directly opposite of each other, with Redcats moving to extend e-catalog functionality and Williams-Sonoma cutting it back.

Same technology; different outcomes. And Redcats and Williams-Sonoma aren’t alone in being on either side of the question.

Prioritizing

A recent Forrester Research report notes that adoption of e-catalogs is now widespread among online retailers. According to Forrester analyst Sucharita Mulpuru, among the “most notable developments in cross-channel integration are the number of retailers that use online versions of print catalogs, made mainstream by rich-media vendors.” In an earlier report, Forrester noted that 73% of online consumers polled reported flipping through e-catalogs at retailer web sites.

Road Runner Sports, Aerosoles, Sam’s Club and Lillian Vernon are just some of the retailers that launched or reported good results from virtual versions of their print catalogs in the past year. But it wasn’t a solution for everyone: DisneyDirect.com this year cancelled an interactive catalog it had put up in 2004.

So what accounts for the fact that what makes sense for one retailer doesn’t work for another? The answer has to do with factors such as each marketer’s strategy, audience, history and which features they find most useful under the various options available, and it’s a compelling illustration of the reality that when it comes to e-catalogs, as with many other online shopping technologies, one size does not fit all.

Two ends of the spectrum

At one end of the spectrum, Lands’ End is a customer of Scene 7’s e-catalog solution as well as other rich media functionality, but Bill Bass, until April the vice president of Sears Customer Direct, which oversees the Lands’ End online and catalog business, isn’t a fan of e-catalogs. “Print catalogs were developed when people didn’t have access to the Internet,” says Bass, no longer associated with Lands’ End, Sears, or their parent, Sears Holding Corp. and currently chairman of holding company Black Wolf Group. “Just porting print to the Internet doesn’t take advantage of what the Internet is able to do.”

At the other end, Alex Bentacur, senior vice president of online technology at Redcats, which uses e-catalog technology from Scene7 Inc., once held a similar opinion; now, he’s a believer. “I was doubtful of e-catalogs because they didn’t provide the dynamic aspect a web page does,” he says. “However, I was encouraged to test it. Lo and behold, we found we have many customers who like to do their shopping that way, so we provide it to them. From a cost perspective, it’s not inconsequential, but the dollars generated from it are viable.”

The heritage of print catalogs goes deep at Redcats, which published and mailed more than 500 million catalogs across brands including Chadwick’s and Lerner in 2004. Catalogs are how some customers know the company and the brand, and Redcats has significant investment in its catalog operation.

At the same time, sales from its collection of e-commerce sites are rising, up about 10% from 2003 to 2004. Bentacur needs no further convincing that e-catalogs are a way to pursue the opportunity of the one channel by leveraging assets of the other. While the plan is to further expand the reach of e-catalog functionality across the operation, Bentacur believes that he will ultimately do that most cost effectively by bringing that particular operation in-house and he’s working with Scene7 on a plan that will do just that.

Moving inside

“We are unusual in that we have a big e-commerce department and plenty of people who know how to manipulate these images,” Bentacur says of the company’s trove of digital product photography. Bentacur wanted a solution that could continue to staff the e-catalog operation in the short term, then provide ASP service along with a tool set that would enable in-house staff to incorporate features such as dynamic merchandising into the online catalogs, and then eventually, supply licensed software that would allow all aspects of the e-catalog to be operated in-house.

“Scene7 is in all three parts of that business,” he says. “With a company like ours, I have to be sensitive to when we are paying a lot of money to someone on the outside when there is something we could be doing internally.”

Vendors and retailers who’ve implemented online versions of print catalogs and linked them to transaction-ready product pages make the point that because they typically use images already produced for a print catalog, e-catalogs don’t require the same investment that a fully-interactive web site does. As such, they’re a lower-cost way to establish an online presence for marketers who don’t yet have a developed site, and in fact, a number of retailers have pursued that strategy to enter e-commerce.

One is Williams-Sonoma Inc., which put up a simplified e-catalog-essentially, an online catalog quick-shop offering-to accompany the launch of Pottery Barn Kids; and a non-transactional e-catalog to get Pottery Barn Teens online. At the same time-about two years ago-it put online a more developed e-catalog for its oldest brand, home and entertaining-focused Williams-Sonoma.

An intermediate solution

The Pottery Barn Kids and Teens e-catalogs on one hand and the Williams-Sonoma e-catalog on the other represented two different strategies being tried out by the company, says Paul Miller, vice president of e-commerce for Williams-Sonoma Inc. “With the Pottery Barn sites, we knew that we wanted to have a web presence but didn’t have a site ready to go yet,” he says. “We wanted an intermediate solution that could allow our customers to interact with us on the web, knowing that down the line, there was going to be a fuller, richer experience.”

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