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Tracey S. Roth

Dot Com Commerce

BY TRACEY E. SCHELMETIC
Managing Editor, CUSTOMER INTER@CTION Solutions


[January 10, 2001]

The Fuzzy Line Between Catalog Marketing And E-Commerce

I don't get many catalogs at home. I'm careful to whom I give my mailing address, and the catalogs I do get are ones I usually want. My favorite is the catalog from a Chicago-based retailer called Design Toscano that sells all manner of gothic art reproductions, gargoyles, garden statuary and medieval-style decorative art. I've ordered only sporadically from the company, as my relatively small apartment does not lend itself to half-acre gothic armoires and life-size replicas of suits of armor. Still, I do enjoy receiving the catalog four times a year and imagining what I would order if a long-lost and heretofore unknown Austro-Hungarian relative suddenly bequeathed me the family castle in the Carpathian mountains (along with a large sum of cash).

Until the keys to my legacy in Transylvania arrive on my doorstep, I'll browse through catalogs, though I seldom, if ever, use the catalog ordering process anymore. This has prompted me to start thinking (always a dangerous prospect): What's the difference today between catalog marketing (which has been around for over 100 years) and e-commerce (which has been around for less time than some pairs of shoes in my closet)?

I can't think of many differences either. Might it be said that catalogs are now Web sites on paper with links that take just a little more effort to visit? I'd say so. Could you say that e-commerce has been a boon to catalog sales the likes of which the industry would never have imagined 10 years ago? Yes again.

To jump-start my thought process about the topic, I started thinking about the first successful catalog-based mail order company, which my educated guess identifies are Sears. The Sears catalog first appeared in the 1890s and was the brainchild of Richard Sears, who by all accounts was a genius of selling, advertising and merchandising. The introduction of the catalog was timed to suit the expanding U.S.'s need for goods and services in areas that were, at that time, still considered the frontier. People living in small settlements in the American West still couldn't buy everything they needed in a local mercantile; there was a voracious hunger for a system that allowed them to look at products in a catalog and send away for them via mail order. Sales grew so sharply that Sears found it necessary, just a few years after the introduction of the catalog, to completely overhaul its production, order processing, fulfillment, warehousing, shipping and customer service policies. Sound familiar, dot coms?

When Sears finally finished overhauling its processes at the turn of the century, the resultant system was so efficient that, according to a history page on Sears' Web site, Henry Ford visited Sears' Chicago plant to learn about the new assembly line techniques to acquire tips for his own company. Ahaevidence of 100-year-old CRM.

Today, like most other companies, Sears has a Web site. Like many companies, it sells goods and services directly off that Web site. The company still has a print catalog (actually, many print catalogs) and conducts a great deal of its business in the traditional way, with customers browsing through the print catalog and calling a contact center agent to place the order. A portion of the company's business, however, now consists of individuals browsing the catalog and then logging on to make purchases, and there is yet another segment of shoppers that skips the print catalog altogether and just logs onto www.sears.com to shop.

The most intriguing relationship between traditional catalog retailers and pure Web e-tailers I can think of is that each type of company has something the other type wants. Companies like Sears and J.C. Penney have had decades -- over a century in Sears' case -- to perfect their ordering, fulfillment and customer service systems. Each company has an enormous network of contact centers throughout the world, warehousing facilities the size of small European countries and rock-solid shipping policies that have been serving them well since long before most of us were born. What they have had to learn rapidly in the last few years is the concept of Web marketing and e-commerce. Many companies with traditional storefronts and mail-order sales capabilities were slow to produce their virtual storefronts, and did so reluctantly. Web sites popped up, but were little more than online brochures with very little real functionality. When they finally did open their Web sites for business, the volume of incoming e-mail shook these companies to their foundations and sent them scuttling to hide behind large pieces of furniture.

On the other hand, let's think about pure Web retailers. These companies have slick Web sites, skilled MIS teams, a five-figure line of credit at Starbuck's and more processing power than NASA. Many of them even have products. What a great deal of them don't have is the first clue how to successfully move what they have to sell through the sales and distribution channels and actually get their products to customers in an effective and trouble-free manner. These are the companies with no effective way to warehouse products, a non-existent returns policy, little live assistance available on their Web sites, shipping problems and the inability to fulfill all orders during holiday and seasonal buying spikes.

That catalog marketers and e-tailers should be learning from one another is a no-brainer. What will almost certainly happen in the not-too-distant future is a further blurring of the already fuzzy line between the two types of businesses. In a survey conducted by the Direct Marketing Association (DMA), most catalog sales-based companies admitted to anticipating that in the next five years, at least one-third of their sales will be derived from the Internet. The DMA has termed the merger between the two types of companies the "Janus Effect" after the Roman god with two faces, one looking to the future and one looking to the past.

Lately, you can't open a business journal without reading about how much trouble you'll be in if your channels are not blended, open, integrated and otherwise chatting together like girlfriends in a coffee shop. Common sense tells us that if there are 10 secrets to running a successful business, and you know five of the secrets and I know the five others, our partnership will yield wondrous things.

For now, I challenge you to go find a catalog in your house that does not prominently tell you where its company Web site can be found. I would also be highly surprised if you visited that Web site and didn't discover that you could buy at least some of the company's products directly off that site.

Do I think the print version of the Sears catalog is doomed to extinction? Not necessarily. I've heard it makes a fine child booster seat in a pinch.

The author may be contacted at tschelmetic@tmcnet.com in case Great Uncle Zoltan is looking for her.


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