Groupon says its focus is on the bottom line, rather than top-line growth.
Once thought odd bedfellows, the Internet and catalogs are learning how to complement each other.
Shopping on the Internet emerged into mainstream use at the tail end of the paperless society buzz. According to that vision, consumers would store and retrieve vital information and bank, shop and get their entertainment entirely electronically. But the reality is that bookstores are jammed, people still read newspapers, and when it comes to retail, paper catalogs haven’t gone away. They’ve simply found an additional audience by expanding online.
J. Jill, Pier 1 Imports, L.L. Bean and Cooking.com are just a few retailers making print catalogs available online. Many other retailers have taken steps to tighten links between catalog and web site by letting customers order items via catalog number on the web site. But these merchants take the strategy farther in replicating their print catalogs page by page online, taking advantage of shoppers’ built-in familiarity with the catalog format, while leveraging technology to improve its presentation in the web environment.
Two of the catalogs to launch on the web most recently, Bombay Company and Bombay Kids, are on BombayCompany.com, the online arm of Fort Worth, Texas-based home accent retailer The Bombay Co. Inc. Operating vice president of e-commerce Matt Corey believes customers’ quick response to the web catalogs suggests the effort has tapped into pent-up demand and that many of Bombay’s catalog customers are ready to shop that format online. After less than five months, the catalog is already the preferred shopping tool of about 10% of Bombay’s online traffic. “That shocked me,” Corey says. “We don’t promote it heavily on the site. There’s just a link on the left side of the home page.”
Because the feature is integrated into the back end of the web site, Corey doesn’t view use of the online catalog as siphoning sales from other areas of the site. “When they pull up the pages of the catalog and click on a product, it takes them to the e-commerce part of the site,” Corey says. “That’s the whole point. It’s just a different way to shop. They can even print it out and take it into a store.”
More Bombay customers do just that, Corey says. And so Bombay is looking beyond the sales it generates online to judge the web-based catalog’s value. Being web-based, the catalog can reach new customers more selectively and more cost-effectively than mass mailing. “It’s not just about online revenue, it’s about how many new customers we acquire,” says Corey. According to Seattle-based DS Retail Technologies Inc., Bombay’s online catalog producer and integrator, the average number of pages viewed by catalog users is 10 to 12.
Bombay isn’t disclosing what it paid to get its catalogs online, but Corey believes the company already has broken even on its investment. “This is a tool used by 10% of our visitors, and it is nowhere near that in terms of cost,” he says.
But while distributing some catalogs online clearly saves the cost of printing and mailing those catalogs, Bombay is in the process of putting metrics in place to track sales generated by the online catalog to arrive at a precise ROI. DS Retail Technologies charges a fixed rate based on how many pages it converts to the web. The rate per page drops as the number of pages rises, up to a defined threshold.
Retailers’ costs also will vary based on how well their catalog content is organized and prepared for the conversion. That state of readiness varies from retailer to retailer. In 80% of cases, new customers don’t have print content in a central database from which it could be easily extracted for the web, says John Stewart, president of technology and operations at DS Retail Technologies. More often, it resides on whatever individual computer it was created on, to allow for easy updates. And that content never makes it into a centralized database.
“Catalogers, for example, will rewrite the description of a pillow, or a grocer will rewrite the description of oranges, most often not pulling from a central database,” Stewart says, “so that information exists only in the print piece.” In many cases, DS Retail Technologies has to extract information from the printed material. It can pull high resolution images from their prepress format, link them with the text, and then build an image and product database. If a retailer can provide the catalog content in a form that can be readily used, some of the process is cut out and cost efficiencies gained, he says.
Catalogers who don’t have content organized in this way prior to launching their catalog online find the database they build to get organized becomes a continuing asset as they use it to populate their online store, he adds.
Bombay’s online catalogs replicate the exact layout of the print catalogs, with some enhancements and adjustments that take advantage of the opportunities in the web environment as well as compensate for its limitations. One advantage of showing catalog pages-entire room settings featuring several products, for example-is that they afford a cross merchandising opportunity that individual or thumbnail product images can’t match. While web site product pages offer some ability to view coordinated products or products in greater context, most catalog pages are already designed to perform that function. “People love looking through catalogs because they get ideas,” Corey says. “It’s not just about one product. You can see the whole bedroom suite in the catalog-the textiles, the nightstand, the pictures on the wall.”
By the same token, putting all those products in one photo and keeping it to a size that can display on a computer screen limits a shopper’s ability to get a closer look at the image or a description of a product. DS Retail Technologies solves the problem with a rollover feature that pops up a sharply-defined thumbnail image, text description and pricing information on any item that the user’s cursor moves over. A second click takes the shopper to the shopping cart for further product detail and shipping information.