The 16th annual DMA State of the Catalog Industry study documents a drop in online sales as a percent of total sales by catalogers and Internet retailers; the first such decline in a decade -- which comes as the industry reports essentially flat performance between 2006 and 2007.
This 2% decline in sales attributed to online customers drove the provocative DM News Headline " Where Did Internet Sales Go?" and naturally prompts an immediate debate -- is it real or is it a false decline based on how they counted?
Weighing in the side of bad counting is everyone's favorite metric wonk Kevin Hillstrom who says catalog guys under mail online buyers which explains the missing sales. DMA researcher Anna Chernis thinks that the study, the one she ran, might understate online sales brought in by search or social networking, both of which get decent spending from the catalog crowd. Others cite the need for viral tools, blogger outreach and still others think we've maxed out on online buyers.
I think the decline is probably real and certainly the result of doing the same old stuff over and over again and expecting something different to happen.
If you get as many catalogs and as many online e-mails as I do, you realize that things are tame and templated. Promotions are predictable and pedantic. All the old retail tricks from the weekly rotos have been recycled into digital formats with huge cost savings. There's nothing new, there's nothing different and there's no urgent reason to buy other than price or immediate need.
But worse, catalogers and online retailers have not realized the genuine power of the digital media because they haven't invested in the tools to move the needle. Very few make offers based on triggers like price, merchandise or frequency. Hardly any seasonal or lifecycle communications reference my size or the category of merchandise I've previously purchased.
Even fewer make offers or communicate on the basis of purchase history data. You'd think after I bought socks 10 times, someone would score me as a sock buyer and make me a special offer! And surprisingly few contact me based on an anniversary of a sign up date, my birthday or based on a product cycle. Surely somebody knows how long those cotton boxers ought to last after repeated washings! And these are just the basic plain vanilla marketing concepts. They are not the creative, inventive, viral, blog-friendly, video or social ideas that all kinds of players are peddling.
So rather than gnash their teeth or argue about methodology, if online retailers expect to grow their business, especially in the current climate, they have to dig into the data, truly engage their customers and do something different. Its the most cost-efficient and customer-centric thing to do.
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