Why Matchback Analysis Overstates the Importance of Catalogs

Multichannel retailers are reluctant to stop sending catalogs to customers who primarily order online. There is a good reason for this. The catalog is undoubtedly the impetus that drives many buyers to order online, even if those customers don’t enter a catalog code. But even so, catalogs are not as critical as matchback analysis suggests. Why?

Because no matter the date, most high value customers just received a catalog.

High value buyers are frequent buyers and, as a result, they spend most of their time in the 0-12 month customer file. Customers in the 0-12 month file generally receive around one catalog per month.

At the same time, matchback analysis attributes all online sales to the catalog if the customer received a catalog in the preceding two or three weeks. That leaves little time each month in which an online sale could not possibly be attributed to a catalog. Yet there must be cases in which a received a catalog within the past three weeks but the catalog did not spur the order. Matchback analysis has no way of identifying these cases, which I suspect are pretty common.

Clearly this methodology is faulty, so why does it continue to be used? Call me cynical, but I suspect it has a lot to do with the fact that list vendors have a vested interest in promoting catalogs as a marketing vehicle. Also, it provides some comfort to catalogers with large house files who want to believe their big circulation numbers give them a strategic advantage over internet only retailers. In this way, matchback becomes a fantasy in which the sensibilities of the traditional direct marketer are reaffirmed.

To truly understand how many online purchases are being driven by catalogs, we can explore a different technique: holdout testing. I’ll explain more in my next post.

Tags: Catalog Marketing, Matchback Analysis

Add Personalized Product Recommendations to Your eCommerce Site

Istobe is a powerful recommendation engine that makes it easy to add recommendations to your eCommerce site. How powerful? Shoppers who click on Istobe recommendations spend 20-50% more than the average visitor.

This entry was posted on Wednesday, June 25th, 2008 at 7:45 pm and is filed under Catalog Marketing, Matchback Analysis. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.