E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
When the Internet burst onto the merchandising stage in the mid-1990s, some e-commerce enthusiasts predicted it would deliver a deathblow to the printed catalog. It didn’t happen.
When the Internet burst onto the merchandising stage in the mid-1990s, some e-commerce enthusiasts predicted it would deliver a deathblow to the printed catalog. It didn’t happen. For the same reason that printed magazines still circulate in the mails, catalogs continue to ride beside them on the USPS truck.
There are a lot of reasons for that, but the fundamental explanation lies in the fact that people still like to read the printed word and gaze at the printed image. It’s a wholly different experience from reading an e-mail or surfing the web or watching television. It’s a more leisurely and relaxing way to shop. You browse a catalog and discover what you didn’t expect to buy; you search the web on a mission to find exactly what you want. Catalog shopping is also more easily combined with other activities. It can be read on the train commute to work, or on the flight on a business trip, or over breakfast, or around a nap on the couch, or-as at this time of year-in the hammock. We tend to retain more of what we read in print and, whether true or not, many people find the printed word more credible and meaningful that the spoken, broadcast or transmitted word.
In short, the printed catalog has earned its rightful place in merchandising, just as the magazine has in communication, and neither will vanish any time soon. That does not mean the catalog business is not dramatically impacted by the web. Indeed, more than any other established form of merchandising, it has been forever changed by the Internet, as this month’s cover story explains. Traditional catalogers now get 25% to 50% of their orders from the web. As a result, they now have to meet the more immediate demands of the web shopper. Their call center staffs must be as good online as they are on the line. And merchandise offered by catalogers no longer needs to be tied to the seasons when different catalogs are mailed, since the web is the catalog for all seasons.
But the impact of the web on the catalog business is really only just beginning. As catalogers move inevitably to a period when most of their sales come from the web, they become web merchants more than catalogers. Their printed catalog becomes a marketing brochure and not the foundation of their business. Other forms of marketing-far more suited to web retailing than mailing bulky catalogs-gain in importance to them, including e-mail, affiliate and search engine marketing. The catalog remains a tool to build the brand and to market hot-selling merchandise that drives traffic to the web site, but it is no longer the cataloger’s sole marketing vehicle. Nor is the catalog the place where they display all the products they merchandise; the web is far more effective in cataloging merchandise.
Some catalogers will make this transition to “webaloging” better than others, of course. Those who embrace the web and all it has to offer will do exceedingly well. Catalogers invented and perfected the principles of direct merchandising, and the Internet is in essence a direct merchandising medium-one that is made to order for the cataloger’s marketing skills. But those who remain too attached to print not only miss a potentially bright future online; they put the future of their business at email@example.com