Target and Toys R Us posted overall sales declines during the holidays.
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Another retailer, a hardware chain in Canada, has integrated its 300-page e-catalog with the 57,000 product descriptions on its web sites. This way, when a customer goes to the e-catalog’s tool section, for example, the customer can click and get information on a full range of tools that is broader than what is in the print catalog, explains Mark Baldwin, president of ICM Group Limited. ICM is working with 15 retailers to develop e-catalogs, including this hardware chain. This chain does not allow customers to purchase the items online as the intention of the e-catalog is to drive business to its 1,100 stores.
In another advanced application, IBM e-mails a product catalog to b2c and b2b customers. Because the catalog goes to frequent purchasers, customers are encouraged to download the catalog to their hard drives where they can keep it for easy reference, says Douglas Rezabek, vice president of business development and e-marketing for Huntsville, Ala.-based Mobular Technologies Inc., which developed the system.
What is unique about the IBM catalog is that it is updated daily. Price-sensitive items are updated as prices change. Limited-time specials have dates listed so that the item automatically disappears and is replaced with a new item when the offering expires. Customers who keep the catalog on their hard drives can click to get their catalogs updated as needed.
But not all retailers want all these bells and whistles. Neiman Marcus puts its famous annual Christmas catalog online, but has not decided to put other catalogs online. And it’s not rushing to add a lot of features.
“We’re pleased with the success of our Christmas book online, but tests with other books did not show a huge return,” says Brandon Hoffman, president and CEO of Neiman Marcus Direct. “Our site is so robust to begin with that we don’t think it is necessary to have all our catalogs online.”
However, Hoffman adds that he has seen considerable improvement in e-catalog technology in the last year and that might encourage Neiman Marcus to post more e-catalogs. He notices that the pages of his book turn faster this year and presentation quality has improved as customers can now click on a picture and get a larger version.
Usability not always tops
Most developers of e-catalog technology conduct usability studies to find out what shoppers want from their e-catalogs. However, RichFX’s Creanult says usability is not always as important as what improves sales. “We’re not always looking for what is most useable to the shopper as much as what sells the most product,” he says. “We’ve found that customers will sometimes say they don’t like certain features, but we often find the features customers say they don’t like actually sell the most product.”
Still, the direction of the industry is toward more functionality. Mobular, for example, was formed by NASA scientists in Huntsville who wanted to develop more advanced applications of presenting data found in financial reports, training manuals and catalogs. Many of the firm’s early catalog projects were in the more sophisticated b2b arena, but the firm is now getting interest from retailers who want more than an online replication of their print books. Mobular technology allows retailers to make continuous changes to the text and product listings and allows them to segment the e-catalogs to specific customers.
Retailers can outsource their e-catalogs to Mobular, which develops the technology and hosts the site, or can license the technology for internal use. IBM, for instance, wants greater control of its catalog and so has chosen to purchase the technology to run on its own servers. Either way, the cost of using Mobular services is between $1,500 and $4,500 per month, depending on the size, complexity and number of updates required, Rezabek says.
In most cases, ICM Group provides its services on a fully-outsourced basis. The company does not release specific prices, but Baldwin says the cost per book is based on the number of pages involved, functionality required and the volume of traffic. Again, retailers hand over PDF files and ICM provides the development, hosting and reporting of data. The company has links to the retailers so that catalog purchases are sent directly to the retailer for fulfillment. In a few cases, retailers have asked to maintain the catalogs on their own servers, Baldwin adds.
One of the pioneers in e-catalogs is RichFX, which has worked with more than 200 retailers. The e-catalogs it has developed range in size from circulars of four to eight pages to catalogs with more than 100 pages. A few b2b catalogs have more than 1,000 pages.
RichFX provides its service only on a fully-outsourced basis and will not license its technology. “If we provide the hosting, we can improve our platform at a fast pace without continuously sending clients upgrades that they have to install,” says Crenault.
RichFX clients pay $5,000 to $50,000 per year, depending on the number of catalogs, pages in each catalog and volume of traffic that RichFX has to handle on its server.
While RichFX does not encourage retailers to make continuous changes to its product listings, it does allow for overlays on items so retailers can feature certain items for a limited time and note that products are out of stock. “If customers know an item is out of stock when they are still looking at the catalog, they are likely to keep looking and buy something else. But if they get to the checkout line and find out, they are not likely to buy anything else,” says a RichFX spokesperson. RichFX also allows retailers to rearrange pages from the catalog, check the cover and send limited versions to specific customers based on their shopping preferences.
Scene7 provides three options to its 250 retail customers. The first version is a fully-outsourced product where Scene7 develops the technology and manages the program. In the second version, customers license the technology and are trained by Scene7 to produce their own e-catalogs, but then the retailers upload the catalogs onto Scene7’s server. In the final version, retailers license the technology, produce their own catalogs and host them on their own servers.