Marketers from Anthropolgie, Design Toscano and Universal Screen Arts shared their catalog survival strategies in a session here on Wednesday.
Anthropologie will circulate 18 million catalogs this year, a five million increase over 2003. The company had direct revenues of $40 million in 2003, and hopes to hit $52 million in 2004.
The marketer of apparel, accessories and home products has a house file of 440,000 and targets women age 26 to 45. It has 52 retail stores, and plans to open 14 more this year, but does not advertise. Instead, the Philadelphia-based company spends its entire ad budget on catalog design and circulation.
Between 45% and 50% of the company’s direct business is done online, and 80% of online purchases are driven by print catalogs. The average order is $80 to $200.
2002 was not a good year for Anthropolgie, said Amy Steel, senior manager of marketing. Dollars generated per book were around $2.50 in the spring, but slipped to under $2 by the holidays. By the following spring, dollars per book were at the between $2 and $3 level again, and over $3 by the holidays. Spring 2004 looks to be just under $3.
Anthropolgie turned things around by getting to know the most important person in the marketing equation, the customer. The company conducted fit sessions for clothing, getting opinions on quality and style of apparel, and had best customers in the home department spend $300 and then show how the products fit into their domestic décor.
Product design layouts were cleaned up, and the product mix was moved from an ethnic flair to a more modern look. Petite clothing was also added to the direct business in the spring.
Setting barometers has been a key strategy for her company, said Heidi Radigan, director of marketing for the What on Earth and Art & Artifact catalogs, owned by Universal Screen Arts. The Hudson, OH-based company also recently acquired the Signals and Wireless catalogs.
Universal sets merchandising barometers by category and subcategory, looking at the dollars generated versus their depiction in the book, and items revenue contribution and demand versus the square inches they take up in the catalog.
Purchasing barometers include the unit fill rate percentage, the shipment to order ration and the annualized inventory turnover rate. Marketing barometers are pretty much what one would expect – response rate, average order, and performance of the 12-month buyer file and percentage of advertising costs versus net sales.
What On Earth, which sells gifts, home accessories and casual apparel, has a 12-month buyer file of 350,000 and an average order of $48, Radigan said. Art & Artifact, which markets home decorative accessories and gifts, has a 12 month file of 95,000 and an average order of $100.
Reducing backorders was vital to Design Toscano’s survival strategy, said Erik Martinez, director of marketing. Because the company sources product from a vast number of remote sources – furniture from Indonesia that took six weeks to carve and six weeks to ship being one example – back orders were averaging 28% of monthly shipped sales in 2002. By 2003, that number had been cut to 9%, thanks to a diversification of the products and vendors featured in the lawn statue catalog.
Straight percentage discounts have worked better for the catalog than free shipping offers, much because of the large and oversized nature of many of its pieces, he noted.
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