Mail Order Catalog Companies Are In A State Of Transition
The state of Wisconsin is famous for a number of things — beer, cheese, the Green Bay Packers and, if you're into this sort of thing, mail order catalogs.
While the industry is in the midst of a transformation, many believe its prime for continued success. However, two popular Wisconsin catalogers recently closed: Marshfield-based Figi's, and Rhinelander-based Drs. Foster and Smith, a pet supply company owned in recent years by Petco.
When I heard the news in early January that Figi's was closing, I was a bit sad. For years, my grandmother sent me Valentine's Day and birthday gifts from Figi's — a huge red tin full of pistachios or a breakfast package. Its pancakes were the best.
The two announcements made me wonder if the problem is industry-wide. Are mail order catalog companies doomed in this day of internet sales?
Hamilton Davison says no, "The catalog works." Davison is the president and executive director of the American Catalog Mailers Association.
"You can't make me go to your email and open it. You can't make me go to your website and look at it. You can't make me go to your retail store and go in it. But you can send uninvited into my home a large format mail piece that I have to pick up as I'm separating my mail and decide am I going to read it or recycle it. And in that 300 milliseconds of mindshare that you've got from me, the catalog allows you to put a beautiful picture, tell me a story, romance me and, in fact, invite me in," Davison says.
"Catalogers are mailing fewer books, but we're trying to generally mail them smarter," says Hamilton Davison.
Still, Davison says yes, the number of printed catalogs mailed a year has declined by around 7.5 billion and the number of catalog companies by about 10,000 since the height in 2006. He says the increasing cost of postage makes it less cost effective to mail out as many catalogs.
"Catalogers are mailing fewer books, but we're trying to generally mail them smarter. Mail them to the people that want them, when they want them, that have shown they're interested in our products," Davison says.
John Baumann is president and CEO of Colony Brands — a catalog company based in Monroe, Wis., that owns catalogs such as Montgomery Ward, The Swiss Colony and The Wisconsin Cheeseman. He thinks the industry excels at database marketing.
When it comes to Colony Brands, Baumann says its customers are loyal. The hard part, he says, is attracting new people willing to spend money with his outlets. He says the company is mailing out about the same number of catalogs as it was 10 years ago, but he says there are differences.
"What you try to do is mail those out as efficiently as you can. So, they may not be as big or as robust, it may be less expensive, in terms of the number of pages and the type of paper that you use. But I think you'll find that a lot of the more successful consumer catalogers are still mailing out large numbers of books," Baumann says.
As targeted marketing gets better, he says the catalog industry will also benefit. But he also says that catalogers have to compete in multiple ecommerce channels — the internet, for example.
"New competition has come in, certainly players like Amazon. And certainly you are seeing more shoppers go directly to the internet to purchase products. In some cases, they are bypassing the traditional paper catalog," Baumann says.
So, why hasn't the internet killed catalogs?
Baumann says it's because the value proposition is different. He says when people go to Amazon they know exactly what they are looking for, but when people open a catalog they're exposed to items that they want but didn't know they wanted.