Using catalog space for good and not evil

When someone says “Can we promote this in the catalog?” how do you answer? Catalogs can move the needle on a lot of fronts: customer acquisition, inventory issues, brand enhancement, and customer education. To do things effectively there needs to be a pretty relentless focus on the catalog’s strategy and costs. If you need to promote a new brand spin-off, tent sale, pop-up store, or pretty much anything that needs attention but isn’t part of the catalog shopping experience, should you use catalog space to do that? It’s not a simple question.

What is the catalog’s strategy?

All catalog space costs money and all opportunities have value. Before you determine the size of the opportunity, consider the strategy of the catalog. If the strategy for the catalog is “customer retention”, first ask “Will promoting this new thing help achieve that catalog strategy?” Then ask “Will it hurt anything?” This is not as much of a no-brainer as you think. Let’s say the new thing is a website promotion for deep discounts. Do you want to tell your best customers they can save money if they stop shopping your catalog and go online? Oops.

How much is it worth?

What is the size of the opportunity? Let’s say that you want to use catalog space to tell customers that a new brand will be available, but isn’t ready to go yet, i.e. building excitement about a product launch that you believe will be profitable. Start by putting a number on it. The question isn’t, “Will “Brand C” products do well?”, the question is, “What is the expected revenue we will get from promoting Brand “C” in the catalog?” If you’ve added other brands e.g. “Brand A” and “Brand B”, what was the revenue generated in the first three months they were introduced? (That’s an average sales curve for a catalog.) Now use your attribution model to determine a likely number for promoting that in the catalog. Important safety tip: The attribution model can’t show that the catalog is awesome for promoting things but then sucks when comparing catalog value to online value. #lasttouchisinaccurate

What does it cost?

What is the cost of the catalog space? Don’t just use hurdle rate. (Hurdle rate is how much each page needs to generate in order for the catalog to meet sales targets.) Different areas in the catalog have different pagination values. Front, back and center of the book are worth more. Hurdle rates typically don’t account for that.

What are you giving up?

Everything is connected. If you drop products to make room for your new thing, you won’t get the revenue for those products. If you increase product density for your new thing, you will negatively impact sales on the items that are getting less space.

Is there a better way to do it?

Let’s assume you want to use a full page to promote the new thing and you determine that the cost of a full catalog page is $10,000. Can you make that $10,000 work harder or go farther elsewhere? Blow-in cards, inserts, email, online ads, social media, co-op ads, and the list goes on.

So now you see how simple questions like “Can we promote this in the catalog?” doesn’t have a simple answer.

All the best,

Sarah Fletcher

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