E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
Penney killed off its remaining catalogs, a harbinger of more obituaries to come.
The other day J.C. Penney officially killed off its remaining catalogs, a harbinger, I think, of other funerals to follow.
Just 10 months after axing its twice-yearly Big Book, J.C. Penney Co. is now getting out of the catalog business altogether.
In 2011, J.C. Penney will cease publishing about 25 other specialty catalogs, says a spokeswoman. Instead, J.C. Penney, No. 16 in the Internet Retailer Top 500 Guide, will publish more direct marketing pieces such as its 43-page “Little Red Book” and “Matter of Style” publications that showcase current merchandise such as men’s and women’s fashions available in the chain’s 1,107 department stores in the U.S. and Puerto Rico and online at JCP.com.
“We will no longer be publishing our specialty catalogs which were being used as ‘look books’ by our customers to see what was new in the stores or online,” the spokeswoman says. “We have always served our customers by how they want to shop and now and in the future that’s online and in stores.”
The fact that J.C. Penney built a $1.5 billion e-commerce operation using its catalog and direct market business speaks volume about how valuable catalogs were to J.C. Penney in the past.
But going forward, J.C. Penney, which didn’t say how much money it would save annually by ceasing to publish catalogs, will use its print publications as targeted direct marketing pieces to reach specific groups of customers, the spokeswoman says. “We will use print materials to drive web and store traffic,” she says.
As the web continues to escalate even more as the retailing industry’s growth engine, I predict other retailers will kill off their print catalog—or at least scale back on the size and frequency of their publications.
Today, most shoppers don’t pick up the phone to place a catalog order or clip out the order form, fill it out and mail it along with a check to the retailer. If they browse a catalog at all, they mark the page and then jump on their computers—or smartphones—to place their orders.
These days a lot of direct marketers should think of how to use their catalogs to drive sales to the web rather than as a channel unto itself. J.C. Penney, which earlier this summer announced plans to rebuild its e-commerce platform and achieve $1 billion in new web sales over the next four to five years, will now use the web to drive e-commerce revenue among younger buyers aged 25 to 34. “We knew we had to transition out of the catalog business to much more of a digital format,” CEO Myron Ullman told attendees last week at the Goldman Sachs Retail Conference in New York. “As we transition out of the catalog business it's not that we are getting out of print. We are transitioning from the catalog as essentially a static vehicle to really what we call 'find more,' which is print material that takes the consumer to the Internet or to the store.”
I think what Ullman says is the way of the future for how smart retailers should use their print resources. Are catalogs dead? Not necessarily if marketers rethink how they plan and print catalogs in order to support e-commerce.
If, in the age of mobile commerce and social media, your organization is still all-consumed with printing and mailing catalogs, your book probably isn’t dead. But it’s likely to be on life support very soon.