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Web sales will account for 36% of total revenue this year, up from 31%, for companies that mainly sell through catalogs, an annual survey by the Direct Marketing Association finds.
Retailers that sell mainly through catalogs expect their sales to shift increasingly to the web, according to the annual “State of the Catalog Industry” report from the Direct Marketing Association.
Web sales will account for 36% of total revenue this year, up from 31% in 2007, predict the 106 responding retailers, most of which view catalogs as their main sales channel. Those retailers expect catalogs to account for 46% of revenue this year, down from 51% in 2007. The retailers expect 14% of their revenue from stores this year vs. 15% last year, and 4% from other channels vs. 3% in 2007.
In a seemingly contradictory finding, however, the retailers said 36% of direct sales occurred online in 2007, down from 40% in the 2006 survey and 39% in 2005. The report did not offer an explanation for that decline after years of steady growth in the web’s share of the catalogers’ direct sales. The respondents said 26% of the online sales were incremental, or sales they do not believe they would have made without an online presence.
The retailers in the survey were more pessimistic than in recent years. Only 59% expect sales to increase in 2008 vs. 68% last year; 19% expect their sales to decrease, vs. 16% last year. Faced with rising postal rates and shipping costs, 57% expect to raise prices this year, up from 30% last year.