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The Monster Trends
by Don Libey

For those CEOs and Senior Managers unable to attend the recent MeritDirect CEO Forum, here are the 2006 and beyond Monster Trends that were presented for consideration and discussion.

Since 1988, I have provided observations and thoughts on the trends for the coming year, either in my newsletter or in keynote speeches to the industry. To date, after seventeen years, those observations are running about eighty-five percent accurate which means nothing more than I continue to be reasonably able to observe and comment on that which is blatantly obvious. Once again, for 2006, my simplistic but tongue-in-cheek approach has isolated—out of a dozen or so significant, evolving, strategic changes—a number of Monster Trends for consumer and business-to-business direct marketing that I wish to explore in some detail. I hope they are of some value to you in planning your strategies for the coming century and meeting the ever-increasing challenges of rampant change in the year ahead.

The Monster Trends

Catalog Function

Clarity is emerging regarding the future function of the catalog. This past year (2005) has produced numerous tentative observations on the changing benefits and intents of the catalog. There is a philosophic twist to the buzz, a genuine questioning of the future utility of the catalog. That is an interesting term: utility. It is an economic term and implies benefit, as in the question “What is the benefit of a catalog?” Or, perhaps more strident, “How much benefit do we get from the catalogs?”

Perhaps the underlying question is, “What does the catalog do today?” Up until now, the function has been to cause a phone or mail order because the catalog actually sells products. Everything necessary to the creation of a sale has been embodied in the design, copy, photography, ordering process, and the customer service elements of the ‘catalog shopping experience.’ The utility of a catalog has been in its ability to silently and remotely make a sale. Everything we know about catalogs, and everything we do in creating catalogs, has been codified for one purpose: to sell.

Suddenly, half of the orders, or more, are coming to us online. Our online catalogs are absorbing more of our resources and energies than our paper catalogs. And wherever we turn and whatever we read, the predictions are for thirty or forty or fifty percent growth in online shopping, consumer or business-to-business. In fact, on the precarious and slippery slope of mall retail shopping, the growth is flat to declining. Yet, the share of the shopping dollar continues to shift to online and continues to grow unabated. The retail malls, those future Cities of the Dead, are in denial and ineluctable peril as this lumbering monster trend, this rough, online beast, slouches towards Amazon.

What is happening is the catalog’s function is changing from selling to driving. It is the catalog that causes an online experience where the selling now takes place. A high percentage (inevitably shrinking over time, however) of online orders are driven by catalogs, and that is rapidly becoming the catalog’s utility, its reason for existing.

Think of the logic and the common sense questions that arise. If the utility of the catalog is as a web-driver, why do we have expensive photography both places? Or, why do we show all of the products in an expensive catalog and also on an expensive web site? Or, why do we show a steak, or a doll, or an imprinted pen to drive us to the same picture online of the steak, the doll, or the imprinted pen? What we are currently doing is redundant. Nature abhors redundancy.

By definition, this philosophic construct demands that we question the future value and form of the catalog. If its value is to drive sales that take place online, perhaps the concept and present form of the catalog are obsolete. Perhaps what is wanted—what increases utility—is instructional information on how the products improve your life, your business, your service needs, your health, or the nutrition of your pet. Perhaps we have finally arrived at the magalog, that mythical mix of product and editorial content that informed and secondarily sold. Perhaps this incarnation will be called the webalog.

Webalogs have a very different utility. They exist to help consumers find you online where your lotions, potions and magic charms are arrayed on endless web pages masquerading as ‘old-timey’ catalogs. The webalog tells stories, features satisfied customers, offers recipes, gives hints and tips, displays box scores, tantalizes, strokes and encourages.

Even the format is very different from the cast-off catalog. A webalog has all the excitement and seduction of Cosmopolitan or the ruggedness of Rod and Gun or the luscious, gastronomic promise of Bon Appetit. But it doesn’t sell. It steers, drives, points, refers, solicits, reveals, entices, encourages, promises, piques, calls, reveals, proselytizes and evangelizes...but it doesn’t sell. The online catalog does the selling.

More logic. Maybe the webalog can do in sixteen or thirty-two pages what a full-line catalog did in 320 pages. Maybe...just maybe a cutting-edge article on a new product application that repeatedly calls for a further beneficial web experience can drive more online product sales than a full-page paper photo and descriptive copy with a price block. Maybe the concept changes from ‘catalog circulation’ and ‘catalog frequency’ to ‘customer contact’ and ‘concept frequency.’ And don’t forget the all-important prospect. Can you get more prospects involved using concepts, ideas, interests, excitement and beneficial utility than you can with a discount offer? Could be.

And so, here is this year’s requisite heresy that you have come to expect from me over the years. Create a new concept mail piece—a webalog—that presents three or four of your products the same way and with the same excitement found in a great infomercial. Tell a story and show how the products are used and why you benefit and push the sales to the web only. Do an A/B split with a normal catalog showing the usual sixteen square inches for each of those products somewhere in the book. Then measure the total online sales of the specific products from both media. You may learn something interesting. The classic catalog will, of course, sell more total dollars, but for the products in the test, I’ll bet you a bushel of corn the webalog drives more online sales than the catalog for those products featured.

This trend will produce tectonic rifts in the art and science of cataloging, indeed, direct mail marketing. Notice that the prospect name, the customer and the list become much more important, and the attributes of the prospect shift to include interests and affinities. The names, however, become associated, not only with the classic physical addresses, but interchangeably-at-will with cyber addresses, Blackberry addresses, and alias addresses. With that level of desired, opt-in personal involvement, the customer will demand email contact, other forms of contact and constant informational refreshment. That changes the definition of direct mail marketing to Direct Interest Marketing.

And the final, killer-logic. If you really believe, in the year 2006, after all that your eyes and your intelligence have told you, that the form, format and relationship of the paper catalog and the online website is a static relationship that will never change, then you will ultimately savor the rusty taste of obsolescence and irrelevance. It is totally illogical that paper catalogs will continue on a utility par with websites given the constraints and costs of their six to twelve month creative cycles, their prices fixed unchanged in time for half a year, their inability to instantaneously discontinue or add products based on availability or demand, the redundancy of web and catalog pages, the twelve-month horizon for analyzing test results, the onerous reconciliation of tracking and analytics, the sheer cost burden, and dozens of other disparities and inequalities.

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