Catalogs, Catalogs, Everywhere

Net shopping isn't rendering them obsolete. It's just changing their role

by Louise Lee

For Smith & Hawken, the future lies in cyberspace. Sales of flower pots and gardening gadgets on the company's Web site are blossoming, accounting for 20% of total sales of $170 million in 2005. Meanwhile, catalog sales are wilting, declining to 15% of total sales last year, from 19% the year before.

So why not just ditch the paper catalog?

Not a chance, says Felix Carbullido, senior vice-president for marketing at the Novato (Calif.) outdoor-accessories seller. Rather than becoming obsolete in the online age, he says, the old-fashioned catalog is the most effective way to make an emotional appeal to the consumer. And ultimately, he argues, the catalog is the best method to convince customers to go online. "It's not just about commerce from the catalog," says Carbullido, who helped redesign Smith & Hawken's catalog earlier this year.

Thanks to e-commerce, as well as rising printing and mailing costs, catalogs were supposed to be dead by now. But a quick visit to the mailbox will confirm that predictions of their death have been vastly exaggerated. Catalogs are, in fact, more popular than ever—and thriving because of the limitations of shopping by pointing and clicking. Unlike the bulky books of yore, such as the venerable Sears catalog, which at times ran to 1,000 pages, the new breed of catalog is a glossy, magazine-like statement meant to convey to consumers the look and feel of a brand. That's a task the typical home PC just isn't up to, no matter how good the resolution of the monitor. The prototypical new catalogs don't attempt to list everything in the product line. Rather, they simply show a carefully selected and dramatically photographed selection. "We're promoting an entire lifestyle in the garden or patio, not just items," says Carbullido.

Sure, consumers may complain about the stacks of catalogs stuffing their mailboxes. But they're using them anyway, and their actions are speaking louder than their words to retailers. That's why the rate at which companies are sending out catalogs is on the rise. In 2005 the number mailed grew by 5.5%, to 19.2 billion, compared with a 5.3% growth rate the prior year and 3.8% in 2003, according to the trade group Direct Marketing Assn.

Cataloging the Numbers

A big mass-mailer like Victoria's Secret ships 400 million of them annually, or 1.33 for every American citizen. What can Victoria's Secret possibly get out of those 400 million catalogs? Plenty. Last year its catalog and online orders accounted for nearly 28% of its overall revenues of $4.4 billion. Those sales grew by 10%, more than double the 4% increase from its stores. Catalogs have become so important to the retailer that it even lists the cost of mailing, paper, and printing as a "risk factor" in its financial statements because an increase in those expenses could hurt earnings. That's not the only potential trouble: The lingerie company has drawn fire in recent years from forest conservation groups.

Even companies that started life on the Web appreciate the allure of a well-designed catalog. Zappos.com, the online shoe giant, in the last few weeks started including its Zappos Life catalog with orders. At tiny candy company JohnandKiras.com, co-owner John Doyle started a catalog in October after operating for more than four years only on the Web. The e-commerce site itself is an efficient way to place an order, but "it's not a good way to attract attention, especially with new customers," says Doyle. Marketing through electronic mail, while cheap, often gets caught in spam filters, he says.

Now that catalogs have a new mission as brand-building devices, companies are making fundamental changes in their design. Because catalogs are meant to give consumers ideas instead of listing every item in the product line, marketers can make them smaller. Clothier Talbots (TLB) has in recent years used small, square catalogs to promote holiday gifts and men's clothing.