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Catalog Marketing 101 (3 of 8)

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Catalog Marketing 101 - Merchandising …

Catalog Marketing 101 - Merchandising
Some would have you believe that catalog merchandising has changed a lot since we've entered the digital age. But, the fact is that merchandising a catalog is the same today as it was before we entered the big data, or data overflow age. Merchandising has always been based on a healthy dose of data analysis, Today, we may have more and faster access to data related to product sales, but the processes and practices have not changed. But, one thing you need to keep in mind is that merchandising a catalog is very different from merchandising a store or e-Commerce website. How you merchandise a catalog is affected not only by the type of catalog. Is it B2B or B2C or both? Is it part of a multi-media, multi-channel strategy? Is it meant to drive retail sales or direct sales? The list of factors goes on. In this tutorial, you will learn how catalog merchandising differs from other types of merchandising, what makes a successful catalog product, the importance of developing a coherent merchandising strategy and other important factors involved in successfully merchandising a catalog.

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  • Selling Your Merchandise Concept
     
    By Lois Boyle
     
    Catalog Age, Feb 1, 2004
     
    In simple terms, a catalog is a group of products showcased and sold on the printed page. How you present that merchandise, however, will determine your catalog's success. n Successful catalogs begin with a merchandise concept that is supported by a distinct brand presentation and a marketing, creative, and operations plan that will complete a sale through direct channels. Without a strong merchandise concept and the ability to communicate that concept, all other functions are an exercise in futility.
    All successful catalogers own a unique merchandise concept. Catalogs that have not clearly defined their merchandise concept have difficulty retaining their customer base and growing their business. A prospect can and will be lured by a specific product, but a clearly defined concept will keep customers coming back time and again. Remember, it's repeat buying that creates a successful catalog program, not a one-time purchase.
    So what is a successful merchandise concept? It must possess the following four attributes:
    Unique and special
    The merchandise collection gives the impression that the particular product assortment cannot be found anywhere else.
    Targeted
    The audience can be broad (teens) or specific (Corvette owners), but the concept must target a definable audience large enough to support growth.
    Authoritative
    Customers believe you are an expert and that you have sought out the best products that will support the merchandise concept and suit their needs.
    Expandable
    The concept must have the ability to expand into several categories, offering customers additional reasons to buy. A concept that is too narrow will limit buying potential and ultimately hurt retention.
    Let's look at three catalogs that sell within the same category, furniture, and how each has carved out a unique concept:
    Chiasso offers funky and “extreme” home furnishings that appeal to a trendy, modern audience. Customers open the catalog expecting to see items that appeal to form first, then function, and they are rewarded with just that.
    Pottery Barn enables customers to outfit their entire home with the comfortable, down-to-earth furnishings that are the company's signature. Customers expect a certain “look” when they open this catalog, and the product presentation allows them to visualize how a room might look furnished with Pottery Barn items.
    Home Decorators Collection, conversely, does not presume to acknowledge any particular taste — it's all about offering the customer a wide variety of options and price points. With its many styles and choices, the catalog lets shoppers build their own look.
    All three concepts are unique and fulfill a specific need of a specific audience. Furthermore, each catalog sells its merchandise in an appropriate creative presentation. Chiasso's photographs showcase each product as the hero or the “art.” Pottery Barn depicts each product not as an individual but as an accessory that completes a whole picture. Home Decorators Collection is chock full of good-better-best options, giving customers the freedom of choice. While these approaches differ, the products and presentations specifically, appropriately, and successfully address each catalog's well-defined merchandise concept.
    Communicating your concept
    Once you've developed a unique concept and selected the right products at the right price points to resonate with a defined audience, the art of communicating your merchandise concept hinges on how you define your brand.
    Most important in developing and promoting your brand is making sure employees clearly understand the merchandise concept and how it will be communicated. Without the seamless collaboration of your merchandising and creative teams, the presentation will never resonate with prospects or customers.
    So what are the best practices to communicate a merchandise concept to customers? Here are a few recommendations:
    Communicate and reinforce your unique selling concept at every customer touch point. This includes not only your catalog but also your Website, the order telephone call, even the box in which the product arrives.
    Covers — front and back — need to consistently present your merchandise concept through the use of product images and taglines. Products that appear on your covers must indicate your unique selling proposition; ideally they would be items with price points and within categories that are already proven winners. A tagline is crucial, especially if you are a new or “unknown” catalog; it should clearly state your unique selling proposition and be presented alongside your logo.
    Use key hot spots within your catalog (and on your Website) to again tell your story. Reinforce your story in the opening letter, the guarantee, the product copy and even the headlines. If your concept focuses on quality, tell how you achieve quality. If it's a price-competitive story, give readers price comparisons. On your Website, you could reiterate your concept on key landing pages with a succinct tagline, a short description or a product image that exemplifies your concept. Place descriptive copy within a constant sidebar so that visitors will always have access to your story.
    Use catalog spreads to create stories that reinforce your merchandise concept. Spreads created with a story convey your concept as well as build intrigue, pulling readers in and, thus, getting them involved. Stories pull products together. Some examples that catalogs use to create stories on spreads include
    price-point stories such as a sale or a good-better-best cost comparison
    a “how to” story in which you offer everything readers need to decorate a room or install a car stereo
    a creative presentation in which everything on the page shares the same design elements (Christmas trees, for instance, or red-and-green plaid).
    Use relevant “sidebars” or editorial copy that prove that you are an authority. For example, Una Alla Volta (“One of a Kind” in Italian) does not sell just jewelry, collectibles, and other gifts. The cataloger sells a unique story of handcrafted art pieces from around the world with the use of editorial sidebars positioned on almost every page. By telling customers where and how the products were made, the sidebars enable customers to appreciate the depth of the cataloger's knowledge as well as to “experience” the merchandise.
    Reinforce your concept in less-than-obvious locations. Customers are accustomed to looking for messages in certain spots — the front cover, page 2, the back cover — but reiterating the message in other, less noticeable places, such as on the order form or in the table of contents, can be effective too. Or consider running that message in the catalog footer next to the phone number or the Web address. Catalogers also have an opportunity to reinforce their merchandise concept in the shipment box. Wendell August Forge, a catalog of handcrafted metal trays, includes a card stating the product's authenticity and describing its unique production process.
    At the product level, use every graphic tool available to sell a concept, not just a single product. For instance, when Williams-Sonoma sells a food processor that its competitors might also sell, the marketer romances it with a recipe to complement its special positioning.
    All of these examples work toward creating one thing: an environment in which customers develop an emotional connection. Does your merchandise concept do this? Most catalogs start with selling a particular collection of products, but how you present and communicate those products as a cohesive concept will help determine the success of your catalog. Make the concept unique to your catalog, instantly recognizable, and relevant to your customer base. If you successfully sell the concept to your customers, the merchandise will sell as well.
    Tailored for the needs and concerns of smaller companies, Catalog Age's new “Small Catalog Adviser” column will be written by the experts at J. Schmid & Associates, a full-service catalog and Internet marketing agency based in Shawnee Mission, KS. Lois Boyle, the author of the inaugural article, is J. Schmid & Associates' president.
  • So what are the best practices to communicate a merchandise concept to customers? Here are a few recommendations:
    Communicate and reinforce your unique selling concept at every customer touch point. This includes not only your catalog but also your Website, the order telephone call, even the box in which the product arrives.
    Covers — front and back — need to consistently present your merchandise concept through the use of product images and taglines. Products that appear on your covers must indicate your unique selling proposition; ideally they would be items with price points and within categories that are already proven winners. A tagline is crucial, especially if you are a new or “unknown” catalog; it should clearly state your unique selling proposition and be presented alongside your logo.
    Use key hot spots within your catalog (and on your Website) to again tell your story. Reinforce your story in the opening letter, the guarantee, the product copy and even the headlines. If your concept focuses on quality, tell how you achieve quality. If it's a price-competitive story, give readers price comparisons. On your Website, you could reiterate your concept on key landing pages with a succinct tagline, a short description or a product image that exemplifies your concept. Place descriptive copy within a constant sidebar so that visitors will always have access to your story.
    Use catalog spreads to create stories that reinforce your merchandise concept. Spreads created with a story convey your concept as well as build intrigue, pulling readers in and, thus, getting them involved. Stories pull products together. Some examples that catalogs use to create stories on spreads include
    price-point stories such as a sale or a good-better-best cost comparison
    a “how to” story in which you offer everything readers need to decorate a room or install a car stereo
    a creative presentation in which everything on the page shares the same design elements (Christmas trees, for instance, or red-and-green plaid).
    Use relevant “sidebars” or editorial copy that prove that you are an authority. For example, Una Alla Volta (“One of a Kind” in Italian) does not sell just jewelry, collectibles, and other gifts. The cataloger sells a unique story of handcrafted art pieces from around the world with the use of editorial sidebars positioned on almost every page. By telling customers where and how the products were made, the sidebars enable customers to appreciate the depth of the cataloger's knowledge as well as to “experience” the merchandise.
    Reinforce your concept in less-than-obvious locations. Customers are accustomed to looking for messages in certain spots — the front cover, page 2, the back cover — but reiterating the message in other, less noticeable places, such as on the order form or in the table of contents, can be effective too. Or consider running that message in the catalog footer next to the phone number or the Web address. Catalogers also have an opportunity to reinforce their merchandise concept in the shipment box. Wendell August Forge, a catalog of handcrafted metal trays, includes a card stating the product's authenticity and describing its unique production process.
    At the product level, use every graphic tool available to sell a concept, not just a single product. For instance, when Williams-Sonoma sells a food processor that its competitors might also sell, the marketer romances it with a recipe to complement its special positioning.
  • It is not possible to lead in all categories, so the catalog marketer should develop a “lead-product strategy”.
  • Transcript

    • 1. Catalog Marketing 101 Workshop By Dudley Stevenson, Mark Eubanks (651) 315-7588 Catalog Marketing 101 Workshop 1
    • 2. Table of Contents • Part 1 – Catalog Marketing Overview & E-Commerce • • • • • • • Synergy Part 2 – Front & Back End Marketing Part 3 - Catalog Merchandising Part 4 – Catalog Creative & Design Part 5 – Catalog Copy Part 6 – Catalog Production Part 7 – Management, Financials & Analytics Part 8 – Operations & Fulfillment (651) 315-7588 Marketing Planning 101 Workshop 2
    • 3. Catalog Marketing 101 Part 3 Merchandising (651) 315-7588 Marketing Planning 101 Workshop 3
    • 4. Merchandising • The primary reason for failure in catalog marketing is the lack of a coherent merchandising strategy. • Marketers new to catalog marketing should also remember: Merchandising a catalog is not the same as merchandising a store or an Internet retail(e-Commerce) site. • 50 to 70% of the catalogs success depends on the product! (651) 315-7588 Marketing Planning 101 Workshop 4
    • 5. Catalog Merchandising • Catalog merchandising involves the following areas: – Developing the merchandising concept and mix – Having in place the supporting merchandising organization – Planning pagination and navigation of merchandise throughout the catalog – Selecting the appropriate merchandise categories – Establishing product pricing – Planning space utilization – Determining product revenue and profitability contribution (651) 315-7588 Marketing Planning 101 Workshop 5
    • 6. Merchandising Concept • The successful merchandising concept must possess the following attributes: – Unique and special - The merchandise collection gives the impression that the particular product assortment cannot be found anywhere else. – Targeted - The audience can be broad (teens) or specific (Corvette owners), but the concept must target a definable audience large enough to support growth. – Authoritative - Customers believe you are an expert and that you have sought out the best products that will support the merchandise concept and suit their needs. – Expandable - The concept must have the ability to expand into several categories, offering customers additional reasons to buy. A concept that is too narrow will limit buying potential and ultimately hurt retention. (651) 315-7588 Marketing Planning 101 Workshop 6
    • 7. Communicating Merchandising Concept • Communicate and reinforce your unique selling concept at every customer touch point. This includes not only your catalog but also your Website, the order telephone call, even the box in which the product arrives • Covers — front and back — need to consistently present your merchandise concept through the use of product images and taglines. Use key hot spots within your catalog (and on your Website) to again tell your story. Use catalog spreads to create stories that reinforce your merchandise concept. Use relevant “sidebars” or editorial copy to prove that you are an authority. Reinforce your concept in less-than-obvious locations. At the product level, use every graphic tool available to sell a concept, not just a single product. • • • • • (651) 315-7588 Marketing Planning 101 Workshop 7
    • 8. Merchandising Strategies 1. Maintain or improve product quality 2. Work on reducing cost of goods while accomplishing #1 3. Continue and strengthen new product efforts 4. Listen to your customer. Research who your customers are and what their needs are 5. Let your product analysis drive your merchandise mix (651) 315-7588 Marketing Planning 101 Workshop 8
    • 9. Merchandising Challenges • The primary reason for failure in catalog is the lack of a coherent merchandising strategy. • The challenge catalog marketers face: – To develop a merchandising strategy whose goal is not merely to find more profitable product for a program, but, rather to maximize the profit per program and support a marketing strategy aimed at developing and expanding an ongoing business – To determine the size of the program the marketer must calculate the optimum number of pages of merchandise or product offers in their program that will generate the largest profit and sales. (651) 315-7588 Marketing Planning 101 Workshop 9
    • 10. Merchandising Leadership Categories • A successful catalog needs to strive to obtain leadership and dominance in the marketplace and lead in one of the following categories. • Merchandising leadership can be obtained by – Offering the best products – Offering the best values – Offering the lowest prices on acceptable quality merchandise – Offering exclusive or hard-to-find products – Offering the best selection of products (651) 315-7588 Marketing Planning 101 Workshop 10
    • 11. Lead-Product Strategy • Not possible to lead in all categories - The catalog marketer should try to become dominant in one category of merchandise that will attract customers who will buy not only this merchandise, but other products. • This concept is effective only if the primary product category is desired by a broad segment of the buyer. • The lead product cannot carry the business but it should be the focus of the business. The catalog marketer must not focus so much on this product category that it fails to develop other product groups. – (651) 315-7588 Marketing Planning 101 Workshop 11
    • 12. Merchandise Selection Factors Product margins Refurbishing costs Comparison with competitive products Potential market size Returns factor Seasonality Print media translation Packaging attractiveness Potential for add-on sales Potential legal problems Operating/assembly instructions Prior history or testing Product safety Economical to ship Cross-salability – encourages sales of other products Supplier dependability Stock keeping headaches Mix fact – too much of one classification Backup merchandise availability Availability – delivery lead times (651) 315-7588 Marketing Planning 101 Workshop 12
    • 13. Winning Product • What are the attributes of a “Winning Product?” • On the following slide you will see a list of attributes, factors, or issues that may impact a product’s success. • Does the product address these issues? • How many of them is the product on the positive side from a Direct Marketing perspective? • These attributes may be applied to products in both businessto-business and consumer catalogs. Not all factors apply to products in each type of catalog. (651) 315-7588 Marketing Planning 101 Workshop 13
    • 14. Attributes of a “Winning Product” Perceived need Family usage Proper price and margins Practicality Matching or coordinated Appeals to small market segment with very strong desires for product Broad appeal High impulse, creates desire Makes for interesting copy Female orientation Multi-featured, multi-usage Personalization Unique, unusual features Value impression Exclusivity Non trendy Photographic appeal – color, style Consumable Brand identification Emotional appeal, enhances user’s image Lends itself to repeat business Piece count - sets Dream element Quality Demonstrability (651) 315-7588 Marketing Planning 101 Workshop 14
    • 15. Merchandise Pricing • You don’t have to be the cheapest, but your pricing has to offer value in the customer’s mind. • Bundling products in sets or packages can obfuscate individual item pricing which may be highly competitive and/or price sensitive. • Lower ticket products will require higher markups than higher priced products because of the lower margin dollars (not % but $’s). (651) 315-7588 Marketing Planning 101 Workshop 15
    • 16. Merchant’s Product Checklist • These are the factors that the catalog marketer needs to keep in mind when developing and selecting products for a book. – – – – – – – – – – – – Exclusivity and image Gross Margin considerations Vendor commitment to backups Ability to reorder merchandise beyond initial commitments Complimentary nature of merchandise Timeliness of merchandise Easy to understand Vendor co-op Price points Product features and product information Promotion orientation Returns (651) 315-7588 Marketing Planning 101 Workshop 16

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