Secrets of the Catalog Master
Vol. MMV No. 3 May 2005
(Continued--page 3)
Secrets of the Catalog Master
Perceptions
Websites and catalogs create perceptions in the minds of prospects and customers. These perceived qualities occur because of the opaqueness of the channel. When a browser looks at a catalog or a website, the company is ‘created’ in the mind. Unlimited inventory is conjured up; great spans of warehousing are envisioned; legions of customer representatives are seen in the mind’s eye. A new direct marketing company operating out of 1,000 square feet in a tiny industrial park can appear to be a venerable, large business entering its seventh generation and sitting atop all of its competition through the magic of catalog and website design perception. I do not mean fabrication of the facts; rather, the use of the customers’ natural perception to create the necessary quality of credibility.
For some companies, operating from unimpressive facilities, it may be better not to show pictures of the warehouse. Let the perception create the picture in the mind. Direct marketing companies that are starting out are best advised to spend the money on a catalog and website that inspire confidence. So many small companies go through the ‘cute’ phase or the ‘we’re really small and we give great personal attention’ phase. Often, this is rejected by the prospect or customer because it is not what they want to perceive.
A second perception where direct marketers have an advantage over retailers and forms of commerce is satisfaction guaranteed. The perception of satisfaction is conveyed by customer testimonials and other customer feedback. These are almost never found in the retail world. Retailers don’t post signs saying, “Bring anything back and we’ll refund your money.” Returns are discouraged in many stores, although ultimately being accepted.
A third perception that the prospect or customer carries in the mind is one of abundance. They all believe that all products in the catalog and on the website are stocked in abundance and are waiting to be bought. The mind of the customer cannot conceive ‘not available’ or ‘out of stock.’ The kiss of death in a retail store or an office products store is the clerk’s pathetic phrase, “We’re out of that, but we can get it for you by next Thursday.” I recently purchased a bird-watching spotting scope. This is a $300 item. One website offered it within 2-3 weeks drop-shipped from the factory plus a hefty shipping charge. Another offered it same-day with free shipping. Guess who got the order. I went with the perception of abundance. The point: Catalog masters use perceptions to gain very real advantage over competitors.
Merchandising
Is merchandising a lost art in multi-channel direct marketing?
What is merchandising, anyway?
The post-online era of direct marketing uses the terminologies merchant, merchandiser, and merchandising in ways that are unusual to traditional direct businesses. When I audit a company, often the CEO asks about the adequacy of the company’s merchandising. In most instances, the company’s are combining merchandising and marketing functions. But the surprising finding is that many CEOs don’t have a clear distinction between those two functions.
First, there are really three types of merchandising. One is concerned with markets, another is concerned with products, and the third is concerned with analytics.
A market merchandiser is expert at understanding the needs of a target universe of a multi-channel direct marketing company and the positioning of that company within the universe (high-price leader, mid-price follower, low-price leader; quality; speed; channel; access). Market merchandisers are also experts on the company’s products, but they have an additional skill in understanding the market requirements, trends, and other influencing factors on a macro basis. The market analysts are also skilled in conducting research dealing with markets, customer behavior, and products.
The second type of merchandiser is a product merchandiser. This is the individual who goes to sleep and wakes up with five new products under the pillow. They are expert at doing competitive analyses of products and product groups to develop perspectives on pricing, lines, extensions, depth and breadth, applications, features and benefits, categories and positioning. From there, product merchandisers skillfully choose the products that make up the lines, based on the competitive findings in each product component area. The development portion of their responsibilities include creating product specifications, writing product descriptions, describing product applications, forming the written description of the features and benefits, sourcing and negotiating manufacturing, purchasing or drop-shipping terms and conditions, preparing contracts, establishing pricing and quantity discounts (if any), and participating in the development of catalog and website creative.
The third type of merchandiser is the product analyst. These unique people have responsibility for all product analysis including RFM and product overlays, square-inch analyses, mark-up catalogs, price analyses, category analyses, product lifecycle analyses, and any other product or product category-related analytics. Additionally, they are instrumental in the analyses of supply chain logistics, inventory turns, cubing, and other supply management analyses.
Both market merchandisers and product merchandisers share the product development and sourcing through a variety of outside activities, including trade shows, import buying trips, vendor sales presentations, customer focus groups, review of trade publications and competitive purchases. The magic occurs when the market merchandisers and the product merchandisers see things from different perspectives, but come together in harmony on finding great products for great markets. Among most multi-channel merchandisers, the top sources for new products are ranked (first to last) as trade shows, manufacturers, internal development, competitors, and trade publications.
Merchandisers have a daunting job. To create a 32-page catalog and web site from scratch, sufficient products are needed for a page density of, say, five products per page. That is about 150 products, allowing for editorial space. To find 150 product winners to make it to the catalog and website, about 750 products will have to be evaluated. The ratio can be as high as 5 evaluated products to 1 selected product for inclusion. Established direct marketers require a minimum 35 percent new products annually to as high as 100 percent new products seasonally. The unrelenting demand for new products by prospects and multi-buyers places a significant amount of pressure on merchandisers. It is illogical to expect a combination marketer/merchandiser to be able to meet the demands of today’s dynamic, multi-channel marketplace. In most of my performance audits, I find severe understaffing—or total lack of staffing—in the merchandising discipline. And wherever it is a function combined with marketing—which is circulation and contact strategy and creative—the results are universally below par.
The additional post-online era recognition that should be conclusive for strong merchandising skill and experience is that each channel has its own merchandising quirks and behavior. One size may not fit all.
Back
Pages: 1 2
3
