A discussion draft of the Online Sales Tax Simplification Act of 2016 is expected to be introduced in Congress soon.
Some catalogers struggle with print, while others race ahead online.
Times have been tough for many of the Top 500 catalog and call center companies.
In 2010, the collective web sales of all catalog/call center companies ranked in Internet Retailer’s new Top 500 Guide increased year over year 10.8% to $20.43 billion from $18.44 billion—the slowest growth rate among the four types of online merchants: catalogers, consumer goods manufacturers, retail chains and web-only merchants.
For some catalogers, making the transition to more online retailing, and cutting the heavy costs of print operations, is literally a matter of life or death. In late 2010 and early 2011, some of the biggest names in traditional direct marketing and cataloging were filing and then reorganizing under Chapter 11 bankruptcy protection. In February, nearly a year after filing for Chapter 11 protection, Oriental Trading Co. (No. 64) emerged from bankruptcy. Other Top 500 catalog companies also filing for bankruptcy and reorganizing include Orchard Brands Corp. (No. 79) and Harry and David Holdings Inc. (No. 103).
“A lot of traditional catalogers are struggling with growing the web side of their business and making a bigger transformation into e-commerce because they still need to support the print side of their operation,” says Ronald Ramseyer, managing partner, Ramseyer & Associates, a Doxbury, MA, retail consulting firm. “For some traditional catalogers generating more business online isn’t just a necessity, it’s all about survival.”
The Top 500 catalogers growing the fastest and making the most rapid transformation from traditional direct marketing to online retailing are reaching out to new types of customers and doing more segmented marketing. PC Connection Inc. (No. 37), for instance, is streamlining its business model and rethinking parts of its e-commerce strategy to keep pace with a rapidly changing information technology market.
To support its new consumer web site and other business-to-business web sites, PC Connection is spending more than $6 million on search engine marketing and other forms of digital promotion, the company says. The reorganization—and the ongoing transformation into a more diverse web retailing operation—helped PC Connection grow e-commerce sales 29.3% to $605.9 million in 2010 from $468.6 million in 2009. “We’re building a multiple brand strategy that leads with solutions selling,” chief financial officer Jack Ferguson recently told Wall Street analysts.
More information about the 2011 edition of The Top 500 Guide is available by clicking here.