Two e-catalogs, two strategies, two futures
By Mary Wagner
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.”
The Williams-Sonoma online catalog launched as a test of e-catalogs’ utility as another online shopping channel beyond what was already a robust web site. Miller says the company knew its customers liked to search, browse by category and were engaged by theme pages on the web site. Given the sizeable percentage of its online shoppers that also receive print catalogs, the brand speculated those customers might also like the catalog option when shopping online.
Today, all three e-catalogs are down, all three brands support active web sites, and as the result of its experience, Williams-Sonoma Inc. defines the value of e-catalogs for its own operation as an interim step toward fully interactive e-commerce. In fact, the e-catalog currently up at WShome.com, the web site of its latest brand, Williams-Sonoma Home, is filling just that role as the company prepares a fully-interactive web site it hopes to launch this year.
In settling on an e-catalog strategy and looking at the performance of the developed e-catalog on Williams-Sonoma.com, the company analyzed how shoppers used the catalog. “One of the things we looked at was, how far did people get in the catalog? Routinely we found that they were dropping off before they got deep into it,” says Miller. “Then you start thinking about building all kinds of tools into the e-catalog so people can search and cross reference and index. But you realize that if you are doing a good job with that on the web site, you don’t need to do those things in the e-catalog. It’s redundant.”
Targeted e-catalogs
Miller’s conclusion is that for Williams-Sonoma Inc., e-catalogs are a needed bridge between launching new brands and new sites, and having a fully developed site ready to go. The online interactivity requirements are particularly critical for the lifestyle retailer, which depends on environmental photography for compelling merchandising. So it integrates interactively with lifestyle and room setting photography on its Pottery Barn site, for example, using rich media technology developed by Scene7.
“I’d rather see effort spent on increasing the productivity of the search component of the site, or adding something to the site from an environmental or room standpoint than to try to take the print catalog, a great model offline, and make it do more online than it was ever meant to do,” adds Miller.
At Shop.NHL.com, the strategy is not a question of e-catalog versus fully-functional shopping site: the online store of the National Hockey League made a fixture of both. What the retailer is wrestling with is exactly what kind of e-catalog is most profitable, and how targeted it should be.
Conversion rates up
NHL Interactive, which operates 30 team stores on GSI Commerce’s platform, has been using hosted e-catalog service from RichFX Inc. since 2003 and director of strategic development Andrew Edelson says the e-catalogs work with the estimated 1.5 million print catalogs mailed every year. As is the case with Redcats, the e-catalogs are an online shopping option along with a fully interactive web site. “It’s a great reference point for our fans who receive a catalog in the mail,” he says. “People see the online catalog, and they remember seeing something in the print catalog that they wanted. The mailed piece is really helpful in driving business online. It gets into people’s homes, and, particularly around the holidays, reminds them to go to our site or our call center and order.”
Though he doesn’t disclose numbers, Edelson says sessions, visitors, and conversion rates on Shop.NHL.com increase after it posts an online catalog, which it does three times a year. This fall, however, it leveraged RichFX technology to try something different: custom catalogs. Rather than simply posting and e-commerce-enabling its fall print catalog on the site, it created 30 team-specific catalogs and one general catalog that was e-mailed to customers segmented by team preference indicated by the customer at the time of e-mail registration. “So if you were a Washington Capitals fan, for example, you received an e-mail saying, click here to see the Washington Capitals official online catalog,” says Edelson.
The team-specific catalogs were also promoted on each team’s site, as well as in each individual team’s online store. The online team catalogs were e-mailed and promoted at the beginning of hockey season in October, when traffic is high across NHL.com as well as at individual team sites, and they remained on the team sites until early November when they went down to make way for a holiday catalog that mirrored the holiday print catalog.
“Everything synched together,” adds Edelson. “If you were a Rangers fan and you got a notification about the Rangers catalog, it drove traffic to Rangers products in the Rangers store. We saw our conversion rates go up for that time period.” Edelson won’t say by how much, but depending on the outcome of an analysis of the cost effectiveness and the profitability of the team-specific online catalogs versus the general e-catalog, the team catalogs could be repeated in the future.
The C/B ratio
Given variables including low initial investment, the merchandising requirements attached to different product categories, the ongoing development of rich media alternatives both within and outside of e-catalog technology and the shopping habits of different audience segments, e-catalogs are being viewed as a key interim step at some merchants and embraced as a core part of the operation at others. As with any other web site investment, it’s a cost-benefit question.
“E-catalogs are not expensive to produce,” notes Miller. “They provide functionality and a certain role, but as you scale your business and look at what you are trying to achieve, they have to be in keeping with what that business is meant to do.”
mary@verticalwebmedia.com
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