Cataloger’s biggest opportunity online is cost savings, Jupiter says
Catalogers are out in front in their success on the web – a function of their existing infrastructure as direct merchants that means lower start-up costs and a shorter path to profitability for online operations. But rather than capturing a large amount of incremental sales, the real payoff for catalogers online is in cost saving opportunities the web presents, according to new research from Jupiter Media Metrix.
That means using the web to reduce catalog mailings and trim order-taking costs. But both goals must be approached carefully, says Jupiter analyst Ken Cassar, who notes that printed catalogs are still the catalyst of catalogers’ online business.
“To date, despite efforts on the part of many, no U.S. cataloger has successfully reduced mailings to Internet shoppers without suffering a loss in sales,” Cassar says. Instead, catalogers should identify their marginally profitable customers, based on purchase history, and reduce mailings to them only.
Web sites also create value for retailers by offering self-service tools that reduce web shoppers’ calls to customer service centers, as well as tools that “demystify” complex product decisions online, says Cassar. For example, consumer electronics retailer Crutchfield.com offers a “What fits my car” tool that shows shoppers only the audio components that will fit each shopper’s particular car.
A recent Jupiter survey shows that of the top five consumer activities at cataloger’s web site, three relate directly to the use of catalogs. 71% of consumers who have visited a cataloger’s web site have done one of the following: bought a product they had seen in a catalog, researched a product they’d seen in a catalog, or requested a catalog. Yet the popularity of catalogs doesn’t reduce catalogers` need for a web site: Jupiter’s survey found that 45% of respondents bought online vs. paper or mail because they simply prefer to use the web.
“It’s increasingly clear that the web is nearly as important to catalogs as catalogs are to the web,” Cassar says.
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