E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
Tablets breathe new life into retail catalogs, but the evolution of catalogs is not over.
It's not a coincidence that Apple Inc.'s iPad tablet computer is similar in size to a catalog. A major thrust behind the design was media, consumers using the tablet to read books and magazines and browse web sites. It didn't take long for a number of retailers engaged in mobile commerce and a handful of mobile technology start-ups to realize that iPads and catalogs could be wed, and that the union had the potential to boost engagement with a brand and ultimately sales.
Outdoor apparel and accessories retailer Filson Co., for instance, has experienced consistent growth in mobile traffic. One in 10 shoppers on Filson.com is on a mobile device, and the majority of those shoppers are using an iPad. It concluded this small but growing group needed something special. So in March 2011, less than a year after the iPad launched, Filson joined Catalog Spree, a company that offers an iPad app that aggregates tablet-optimized versions of catalogs. The app has been downloaded more than 200,000 times, Catalog Spree reports.
Filson is a small retailer and its goal with Catalog Spree was to get its brand in the hands of more consumers and drive greater engagement with the brand. Today Filson says it is satisfied with the number of people viewing its iPad catalog and that the click-through rate from a product on a catalog page to the product page on the e-commerce site, which appears within the catalog app, is high. Filson won't divulge exact figures but it does say that metrics such as page views and click-through are higher in the iPad app than on the e-commerce site.
"It is not a revenue-based decision right now, it's a decision based on where the customer is," says Harry Egler, vice president of direct sales. "We're happy with the revenue coming in. We're looking at eyeballs on the brand, being where the customer is, which is obvious from the ever-growing source of traffic. Those are the deciding factors as to why we're doing it."
Tablet catalogs are nascent, to say the least. But they're causing a stir. There's a natural fit between tablets and media like magazines and catalogs. And a consumer can not only view more information—such as deep product descriptions and videos—on a catalog app compared with a print catalog, she can complete a transaction within the tablet version.
Since the birth of the iPad in April 2010, a number of catalog aggregator apps have popped up, including Catalog Spree, Catalogue by TheFind, Coffee Table and Google Catalogs. And some retailers have created tablet catalogs of their own. Redcats USA, for example, has iPad catalog apps for 11 of its brands.
The question is, how big will tablet catalogs become? Marketers mailed 12.74 billion catalogs in 2010, according to the Direct Marketing Association. That's down from 19.44 million in 2006 (see chart). And catalogs only account for 1.4% of retail sales compared to 22% for the web, according to a recent online survey by the Wharton business school and research firm Verde Group.
Tablet catalogs will not replace many paper catalogs for the time being, experts say. But the cost of a tablet catalog for catalogers is minimal as they have all the creative elements in place already for the print catalog, and the connection between an app and an e-commerce site is straightforward. As a result, the aggregators are picking up some retailers.
But will consumers flock to tablet-based catalogs or prefer the good old-fashioned print versions? And could tablet catalogs be merely a stopgap measure as the catalog format itself dies out?
"With tablets there is a significant opportunity to reward your best customers, target content to them and reduce production costs," says Sucharita Mulpuru, vice president and principal analyst at Forrester Research Inc. "When will the benefit of that really be realized? The number of people downloading these apps today is relatively small. It's a five-year play—it requires a lot of people to shift their behaviors. You can't drop your print catalogs by half and launch an iPad catalog and expect that will serve you well."
Catalogs made their first step away from print some years ago when retailers began posting electronic versions of their catalogs on their e-commerce sites. Consumers who liked the catalog format as well as shopping online could use a mouse to click their way through pages. A click or two would lead to the e-commerce product details page where a consumer could buy the product.
But these types of catalogs never caught fire. Many are still on retailers' sites, especially those of fashion retailers, but they haven't contributed much to e-commerce, experts say.
"There are challenges with online catalogs because they offer a fundamentally bad experience," Mulpuru says.
This is where the tablet could change the story line.
Filson posts digital catalogs occasionally on its e-commerce site, but Egler says the tablet catalog easily trumps the online catalog.
"Online is not like the iPad experience," he says. "If you are looking at a digital version online it doesn't necessarily seem like a catalog browsing and shopping experience. It looks like you are on the site to begin with, the only difference is it's paginated. It feels different to me as a consumer when I am on an iPad; I don't feel the same way browsing on a desktop computer. One big difference is I can enjoy a catalog on an iPad wherever I may be."
That's why Egler saw opportunity in the iPad catalog offered by Catalog Spree. Filson provides Catalog Spree with the high-resolution PDF files of each page of a catalog that it already has lying in wait because they were created for the print catalog counterpart. Filson also gives the catalog aggregator access to its product data feed to provide additional product information and prices. The aggregator synchronizes the data feed with the images on the PDF pages. Catalog Spree then generates the catalog and places it within its app. Consumers can see the catalog by browsing through catalogs by retailer or category or by searching for the name.