Paper catalogs are making a comeback. They are popular -- especially among millennials, who respond well to their vivid product presentations, according to an article in the Harvard Business Review.
The researchers partnered with a luxury watch and jewelry seller with no physical store. The firm’s annual revenue totals $60 million, with profit of $12 million.
Email is an important part of the company’s mix.
“When a customer’s first order ships, the company obtains permissions for future marketing contacts, then uses weekly email marketing campaigns to promote repeat purchases,” writes the author, Jonathan Z. Zhang, a member of the marketing faculty at Colorado State University.
For this experiment, the unnamed firm launched a bimonthly catalog featuring professional photography and high-quality printing.
Of the customers studied -- some 30% of the U.S. base -- 55% received a weekly email and 40% received both the bi-monthly catalog and the weekly email. Another 5% were sent neither.
The results? The “Email + catalog” group experienced a 15% lift in sales and a 27% lift in inquiries, compared to the “Email-only” group, Zhang reports.
When tested against the Control group, the “Email + catalog” group generated a 49% lift in sales and 125% lift in inquiries, versus a 28% increase in sales and 77% in inquiries for the Email-only group.
What’s more, 90% of the catalog recipients browsed the book and kept them it an average of seven days, the staff found in a survey. In contrast, the email campaign pulled an open rate of 26%.
“A quick ROI calculation indicates that a 15% increase in sales on an average order size of $6,700 due to the catalog campaign, at approximately 30% gross margin, translates to an additional $90 profit (or $180 additional annual profit) per customer,” Zhang writes.
Zhang adds: “The average cost of the mailing with front-end design cost factored in is $5, yielding a direct ROI of 600%, not to mention the additional customer engagement from increased inquiries.”
If the results are extended to the entire U.S. base, iit would lead to incremental annual profit of over $5 million, a 40% increase over the current level.
Zhang argues that “physical stores are expensive. For e-commerce retailers, especially those in hedonic categories who do not have or do not want physical stores, well-designed catalog campaigns allow them to make the product presentation more vivid, tactile, and memorable.”
We have no quibble with that and are thrilled that catalogs, which go back at least to the 19th century, are once again seen as valuable marketing tools. Zhang concedes that well-designed catalogs wouldn’t work for every product category.
But perhaps the emphasis could be changed slightly. The real finding here is that charming analog books and email work better together than they do alone.
We’d like to see more on attribution and how the orders are placed. But this is a great start.