Remember the “good old days,” when figuring out a catalog’s ROI simply meant looking at the sales resulting from the actual paper catalogs you mailed? In 2009, papa’s got a brand new bag of metrics to contend with — and they’re definitely not as clear cut.
“We get into these debates about whether the Internet is just a transfer of sales from the catalog and a channel of convenience and so forth,” says Curt Barry, president, F. Curtis Barry & Co. “But today, about half of [traditional] catalogers’ sales come from the Internet, and that forces you to look at things differently.”
The key for catalogers is to look at what percentage of net sales they’re spending for the various kinds of media, says Barry. For many catalogers, the actual print catalog factors in at about a third of the spend, with 25% to 30% of net sales going into the creation, printing and mailing of the catalog. And by comparison, electronic media account for 10% to 15% of the net sales spend.
“Electronic media may be cheaper, but people need to consider whether it is generating sales,” he says. “Are these individual electronic promotions [really] producing sales? And what are the attendant costs?” And of course, the problem still exists of deciding to which channel to attribute each sale in the matchback process. In some instances, Barry says, he sees people working with a bias to attributing sales to print to help justify the expense of the print media.
“I also see a number of people who have given up on that, who look at the two channels together and say, ‘We know we can’t eliminate catalog, but it has to be smaller in terms of pages [based on the sales it creates],’” Barry says. “And the catalog’s function is different now, so you have to track media costs differently.”
It’s not an easy task. For Internet retailers who also operate paper catalogs, the allocation of costs back to various online media like affiliates, banner ads and search isn’t as systematic as the old school catalog metrics. “I’m not sure we’re getting the right kind
of decisions from it.”
— BETH NEGUS VIVEIROS
Network
