SOMETIMES IT SEEMS AS IF TODAY'S MAIN CATALOG GROWTH strategy is, “We'll just give them a lot more stuff to buy and watch the sales pour in.” Would that it were so.
We can hardly be blamed for thinking consumers want more and more choices. According to a recent article in The Philadelphia Inquirer, Crest offers 85 different toothpastes, Coca-Cola has 15 different colas (poor Pepsi has only 12), Dish Network provides 326 channels and A. C. Nielsen reports 10,581 different varieties of cookies.
It seems unnatural, after reviewing a catalog's merchandise analysis, not to offer additional versions of products that have been stellar sellers. After all, picking a new top seller that isn't based on sales history has a higher risk of failure, so what not just keep offering more of the same?
Because, in our heart of hearts, we all know that to make too many comparable, barely differentiated goods available not only causes split sales, but also can bring about such indecision that a consumer won't buy anything…or worse, opt for a competitor's simpler selection.
The American Psychological Association quotes Barry Schwartz, a Swarthmore College psychologist and author of “The Paradox of Choice: Why More is Less” (Ecco, 2004): “The presumption is, self-determination is a good thing and choice is essential to self-determination. But there's a point where all of this choice starts to be not only unproductive, but counterproductive — a source of pain, regret, worry about missed opportunities and unrealistically high expectations.”
OK, too much depth of product is a bad thing. So, most catalogers turn next to adding breadth via more product categories. A successful example might be Lands' End, once known only as a boat accessories catalog that somewhere along the line decided to add clothing.
Because Lands' End is so well known today, its evolution from the “Lands' End Yachtsman's Equipment Guide” seems effortless and can imply that category extension is the only way to go. But Lands' End didn't jump from brass fittings to dress shirts overnight.
Think metamorphosis…purposeful evolution, not instant makeover. Companies that are at the stage where growth requires additional product categories most likely have a loyal following already. The key to pulling off category addition is adapting your overall positioning to the new product classes without losing the customers who know and love you just as you are. Ease your new categories into the mix as carefully as you would integrate a new kitten into a household ruled by a 100-pound rottweiler.
If you don't have a positioning statement that minutely details what your company stands for and the strengths that support that image, you're headed for big trouble because new product categories can easily distort existing impressions.
Also watch out for the “phone book” syndrome. “Searching” for products is what folks do on the Internet; leisurely perusing an entertaining, concise selection of wisely chosen products is what folks want in a print catalog. You don't see Williams-Sonoma offering sheets, sofas or goodies for kids and teens in its chef-oriented catalog, right? But one of Williams-Sonoma's ever-increasing autonomous, home-related catalog titles (Williams-Sonoma Home, PB Teen, Pottery Barn Kids) does. No brand mix-up there, as each title has its own clear, consumer-aware positioning.
Another reason for merchandise extension is price. As consumers become more value driven, some higher ticket catalogs respond by cutting prices…and margin. Others stick with their prices and just live with the reduced response.
But there's another approach: Create a new, lower end brand that can appeal to a broader market, increasing the possibility of higher overall sales.
Separate, low-ticket products from a high-line manufacturer are not a new concept. Just two parallel names: Anne Klein/Anne Klein II, Levi's/Levi Strauss Signature. Some ride under the same name but have a lower cost of goods and quality (for instance, Toro offers a complete line of outdoor maintenance products at independent dealers but just one low-priced model at Wal-Mart). There's no longer any shame in associating a normally high-ticket name with a low-end image. Just think of the successes of Michael Graves at Target and Martha Stewart and Levi's at Kmart.
In our industry, some might use Frontgate's Grandin Road and Williams-Sonoma's West Elm as two more examples of high style at lower prices backed by companies known for their upmarket positioning.
Beyond using existing sales data as a guide, how do you determine what categories to add? Who was original enough to come up with the first personal computer, Apple's first mouse and the Palm V PDA? And how did anyone know enough to develop products that became hot sellers before there was anything else like them?
Ideo, the industrial design company behind all the aforementioned trendsetters, “begins every project by focusing on the consumer experience,” according to a recent edition of the Financial Times.
Ideo doesn't just interview consumers; it goes so far as to photograph them using products in their homes. The idea is to learn what consumers both like and dislike about a particular item.
Using the data collected from consumers, Ideo then brainstorms with hundreds of people from all walks of life, thus generating a well-rounded set of views about what's really needed, not just talked about. Based on the ideas that survive, expert teams then further develop the concepts that continually get customer input.
Sounds like more work than most of us have time or budget for, right? But then again, how many mistakes are we willing to pay for?
Get the odds to work for you. Allow for sufficient funds, expertise and a well-planned time frame to develop product category additions that will both sell and enhance your catalog's positioning.
KATIE MULDOON (kmuldoon@muldoonandbaer.com) is president of DM/catalog consulting firm Muldoon & Baer Inc., Tequesta, FL.
