eCommerce Analytics

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.

In RRW Consulting’s Direct Marketing Blog, Nancy Arter mentions that, in order to properly embrace Green Marketing, direct marketers need to “prove it” to their consumers via their business practices. Otherwise, she says, a green message rings hollow. As an example, Arter states that catalogs and coupons need to be printed on recycled paper as proof to the consumer that your company practices what it preaches.

Well, I’ll take it three steps further. I would argue that Green Marketing means sending as few catalogs as possible to achieve the same revenue targets, regardless of what type of paper those catalogs are printed on. So am I advocating that catalogers move all of their operations online? Hardly. That would be fiscally irresponsible. Catalog sales, after all, are still going strong. And there are demographics that ecommerce will never reach; demographics that include catalog devtoees who will not soon, if ever, buy from the web.

But the shrewd direct marketer should see the greening of marketing as an opportunity to prune their mailing list by using customer data best practices. Current data mining techniques make it possible to predict which customers will never buy from you again, regardless of what types of advertisements and enticements you send them. So why send those customers catalogs at all? We recently ran a study and found that we could save a multi-channel retailer a projected $47,000 a year by using customer models to identify the customers unlikely to buy again. Our recommendation: save the recycled paper by pruning those customers from the mailing list.

Direct marketers who parse their catalog lists using the powerful data mining capabilities available can make a solid case that they are listening to consumer opinion while trimming their own fat. Now, more than ever, direct marketers have the tools at their disposal to send less catalogs while still achieving the same marketing lift. And they can tout their sustainable practices back to their customers. Now that’s a marketing organization that will see green.