For Retailers, Catalogs Continue Their Comeback

The following was previously published in an earlier edition of Retail Insider.

As digital marketing costs keep rising and the ability to micro-target audiences improves, catalogs are intensifying their comeback.

Retailers like Nordstrom, Neiman Marcus and Ikea are finding that many people still love making a print connection and that paper catalogs, combined with a digital element, such as a QR code, create a solid return on ad investments. And even digital companies, including Wayfair and Amazon, are using more print products.

While the rising cost of digital ads has been fueling the trend, new privacy considerations are making the changes more urgent, says Jonathan Z. Zhang, a business professor at Colorado State University who has researched paper catalogs. “With less user data, digital ads aren’t just more expensive, they’re less targeted.”

And catalogs work. In one of Zhang’s studies, which included 8,600 U.S.-based customers, people who received catalogs in addition to emails purchased 24% more products than the email group alone, indicating a lift of 870% ROI.

They’re especially effective for purchases that make people feel happy. His results show catalogs offering hedonic products – think cashmere throws, luxury watches or colorful macarons, as opposed to a hammer from Home Depot – have an ROI that’s 120% higher. Luxe is also better, with higher-priced products achieving an ROI of 50% higher.

More companies are switching to print. In a recent study from RRD, which markets and packages print solutions, 68% of respondents said large-scale changes to social/digital platforms over the past six months have influenced their digital marketing strategy. Of this group, 71% have reallocated the budget from digital to direct mail, brochures, signage and other print channels as a result.

Nordstrom, for example, is increasing its use of catalogs after a period of dialing them back. Year after year, no matter how many things we did,” said Deniz Anders, the retailer’s chief marketing officer, in a recent Nordy Pod, the retailer's podcast, “the number one thing customers asked for is the catalog. So we’ve prioritized that.”

And in Neiman Marcus' new fall campaign, it’s offering three versions of its catalog, including a coffee-table-worthy hardcover for its best shoppers and a luxe soft-cover edition for the next loyalty tier.

“The main thing marketers are focused on is being where their customers are,” says Stefanie Cortes, RRD’s director of strategic analysis and business development of direct marketing. “Direct mail provides more of a customer-focused approach now than a promotional approach.”

And while digital channels can be effective, “they are all on a screen,” she tells Retail Insider. “Print is the one thing that sets them apart. While marketers have to find the omnichannel combination that gives them the right balance, print remains this unique and interesting vehicle to connect with consumers.”

Tactics like QR codes make print more trackable.

Besides an increase in direct mail from legacy catalogers, “we’re also seeing D2C and digitally native brands, like Amazon and Zappos, use catalogs more,” she says, adding that some companies are also using solo self-mailers to target higher-value customers.

Many marketers did away with catalogs in the early 2000s. Digital was the way of the future, and consumers fretted over the environmental damage of wasted paper.

“Catalogs were a dinosaur,” Zhang tells Retail Insider, “but we began seeing a resurgence by 2015 or so. “Digital was like an arms race, so marketers began saying, 'Wait. Paper catalogs are undervalued. Let’s reconsider.’”

And while catalogs aren’t effective for every retailer, data aggregators can provide transaction data with physical addresses. “If you send a catalog to someone you know who spends thousands on home furnishings, the response rate will be much higher than some random social media ads,” says Zhang.

His current research includes working with the USPS and focuses more deeply on design's role in catalog effectiveness.

The goal is to find ways to help companies boost catalog effectiveness and minimize waste. “With this level of targeting, there’s no need for companies to return to the old days of printing millions of catalogs, which ultimately wind up in the trash. They can print 200,000 and send it to the people most likely to engage.”

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