Speakers Key

DM: David Murphy, Chairman - Freelance journalist and marketing expert
CC: Chris Catchpole, Creative Partner, marketing agency Catchpole & Friends
AL: Alison Lancaster, Marketing Director, Charles Tyrwhitt
CR: Managing director, Firebox.com - online retailer of gadgets, games and gift ideas
JT: Jamie Toward, Board Account Director, Redwood - looks after all Royal Mail’s on- and offline customer publishing
KS: Kevin Slatter, Director, G2 Data Dynamics
JH: Julia Hutchison, COO, APA - Trade body that represents on- and offline customer publishing industries
EB: Emma Brannan, Marketing Director, Jo Jo Maman Bébé
MS: Matt Stead, Marketing Director, White Company - Former Littlewoods Group and M&S marketer.
CathC: Catherine Campbell, Market Development Manager, Multi-Channel Retail Royal Mail

DM It’s fascinating how catalogues have reinvented themselves from a very working-class, credit-based model to the niche, specialist, targeted magazines they are now. If I get a magazine through the door from a company I’ve never heard of, but it looks interesting, I will sit and read it, and I have bought from those magazines. I hate browsing through websites to buy things, but I’ll happily sit on a sofa and look through the magazine, get the order then go online. Christian - you wanted to make retail an experience, to create a cool, online destination, and yet you wanted a catalogue the moment you could afford to have one.

CR : We wanted originally to be a mail-order retailer. There were interesting gadgets featured in lifestyle magazines, from places like Japan and the US, but they weren’t available in the UK, so we sourced them around the world. Printing, producing and mailing a catalogue, and renting lists was far too expensive. We had the expertise to set up a website, so we tapped into the power of PR to drive traffic to our website, by getting product placement in the media. When online retail was taking off, the press were reporting the death of catalogues. But our view is that’s not going to happen. This is an amazing way to reach people, and as soon as we could afford to, we put together a catalogue. Our first catalogue was this ‘magalogue’ concept. We wanted to be a much softer, lifestyle sell than the traditional big book format. The first couple of catalogues had the traditional order form and it wasn’t easy to fill in. We really wanted to drive people online, so we took the bold decision of just removing that form from the catalogue.

AL: We want to encourage people online as less than 2% of our orders now come via postal order form. On our prime trading catalogues, we’re now down to just an order form inside the back flap, from a six-part, stitched-in form. We will test, control and monitor how customers react. It’s difficult to measure the cross-channel impact, but we do track using our database company and retail system, so we capture point-of-sale data in store. I’ve heard lots of examples recently where people thought, we’re getting 60%-plus orders online, so they cut the circulation of their catalogue or the frequency of mailings. But US research shows companies that cut back 20% on their circulation had an instant 18% loss of sales. We’re looking at increasing frequency of mailings to our best customers, but at the same time making sure it’s more targeted and relevant. We’ve also encouraged customer reviews and ratings, and we’re looking at how to use it to improve our SEO, and incorporate that content into our brochures and catalogues. It’s really about making content relevant to the different customer segments based on past purchase history.

EB: The catalogue also drives our sales. We can track the amount of people who use our quick-shop facility online, taking a code from the catalogue. We also have new customers who are acquired by our website promotions, come online and request a catalogue. So even if people are coming from online advertising, they still want a catalogue. Meanwhile, the percentage of our customers who order by phone has decreased dramatically over two years.

MS: Our research shows about 60% of customers cite the brochure/catalogue as the reason to go in store or shop online. We try and balance lifestyle and product-specific content, so ‘shopability’ of the brochure is really important. As a multi-channel mailer that started as a mail-order business, we’ve got the beauty of that infrastructure, rather than being a high-street retailer and then going into mail order, and then thinking about it online. We can understand and test each channel, balance internal data with what’s happening externally, and segment it to drive relevance.

DM : Christian, why not mail catalogues more often?

CR: Every time we put out a catalogue we have something in the order of 50% to 60% new products. We wouldn’t be able to manage one every four to six weeks with new products. But we have been increasing frequency over time, from once a year. I can see how in some sectors it makes sense to increase frequency.

DM: Are companies geared up to track where people are coming to their website from?

KS: Yes. It’s about actually understanding the sources and essentially creating a single customer view from the range of modern channels. It is easy if you take the right approach from the beginning. We have clients who started from the premise of ‘we want to understand our customers‘. But they’re only starting with understanding that data and putting it all together. So, as a result, offline channel communications can conflict with the online channels and messages, which destroys the brand. One of the key things here is looking at brand unity, making sure that’s consistent across the channels. And if you start at the right point, with the right tools for analysis, it can be easy.

MS: VIP schemes, which incentivise your customers geographically to make different offers that appeal to different people, can work well. There is a far greater desire by the customer to respond to a promotional code and give their details. The obvious next step is a full-blown loyalty/reward scheme, where you really do start to incentivise people. You can get down to a granular level.

KS: But the days of just assuming that a loyalty card actually brings you loyalty are long gone. It’s more about what we call ‘mutual marketing’ now. We need to get a two-way dialogue and actually provide benefits people want to see. And if they can understand that, then they are actually much more likely to give you the information you need to subsequently give them better services. You create that community by using all the channels.

DM Does anybody use websites to say to people, you can have a magazine every four to six weeks, would you like it more or less often?

AL: Yes - it’s there as a service to customers. If they make requests, we can action that. We’re just starting in the current book to push the web more and we’re doing our bit for the planet. We’ve now got different sized books. So if you’ve received something you think is a bit mean, go online and order the full book, or call us. Rather than trying an expensive, bespoke loyalty scheme, which would involve a major systems upgrade, we’re trying to use the data, feedback and analysis we’ve got to do ‘manual’ personalisation.
We can understand how customers behave with the brand across the channels and being able to pre-empt that with emails and appropriate direct mail. It would be great if we had a fully automated, single view of the customer. But rather than letting the perfect get in the way of the good, we’re doing a few simple things has improved our business, and it’s focused us on delivering a better customer experience. For example, being a bit more imaginative with the paper and formats to try and get some creative cut-through and increase the response rates. It’s about targeted, relevant catalogues and DM working together to drive maximum qualified footfall to the website and shops. Retail isn’t just migrating over to web, it’s also redefining the mix of how customers shop across all the channels. It’s easy to make wrong business decisions if you think customers are moving away from catalogues to shopping online or in store.

DM:  Catherine, there seems to be quite a warm feeling towards catalogues. How does it get away with not being considered ‘junk mail’?

CathC: If we offer something relevant, targeted and personal to the recipient it’s welcomed, and that applies to all mail, not just catalogues. Catalogues tend to be kept in the home for quite some time. We also know that a lot of home shoppers have a conscience. Our Home Shopping Tracker research shows that about 70% of recipients recycle their catalogues, but still want to receive them.

DM: So what should a catalogue look like?

JH: We’re seeing the editorialisation of brands. Some 15% of members’ work is digital content. I think we’re seeing more catalogue production using editorial skills. There’s a book recommendation or something a bit quirky that engages you. If you apply magazine style to a catalogue, it can make it more interesting. The average brand magazine creates a 32% uplift in loyalty.

JT: Maybe it’s about the fragmentation of catalogues. As we move away from big books, like from department stores to boutiques, people want to shop in different ways, whether directory-based or online. We’re seeing a transfer of the ways in which editorial positions clothing in catalogues, to reflect the way that women are thinking they should shop. Modern marketing is about making people’s lives easier, and through customer magazines, catalogues and websites we should give them the utility to make their lives easier and stimulate brand attachment.

EB: We don’t devote that much space to the editorial content, but the focus issue is either aspirational for the customer, or reflective, and if you target the right people, then you don’t need a huge amount of editorial content, because it is perceived as something that they want anyway. They keep it.

DM:  What about mail order companies moving into retail?

MS: That’s seen as a positive addition and it’s beneficial rather than it being invasive. It’s a fantastic opportunity to support the mail-order side of the business. After you’ve got to the checkout, and you’re asked ‘would you like to join our mailing list?’, if you’re in a rush the answer is no. But if you’re engaged as you go into the store, we have seen 30-40% increases in the database, because people engage with the brand and they don’t mind having another brochure or catalogue.

CC: There are certain demographics where a multichannel approach is necessary. For example, young women between 20 and 28 in office-based jobs might not have time to visit a retail environment. There’s a whole demographic of different people who isolate themselves from one channel or another. You have to allow them to touch your brand at different times.

JH: We looked at how different demographics responded to customer magazines, and we were astounded that the highest responding group was 18- to 24-year-olds, which went against our thinking.


AL: Catalogues are doing a different job to magazines. If you’re a larger, retail-led business, you can probably afford to do both. At one point, there was a trend to drop the catalogues, and they became more like magalogues. There’s a key difference that publishers and brand marketers have to understand. Cataloguers know the amount you can take from a book, depending on who and what you offer, in the same way a retailer analyses sales and profit per sq m in shops. If you start to apply the rules of editorial or generic branding or advertising to catalogues, you’ve got to be really clear what the objectives of publication are. It’s one thing to do the nice brand image job, and a branded magazine can still be more effective than a TV or press ad campaign - but the loss of pure catalogue style direct selling pages can immediately damage top line sales or web and store traffic. Understanding the more complex customer journey and touchpoints influences the purchase decision.

CC: We had a difficult job working on Nectar, which sent out 11 million mailings every quarter, and you had to talk about Sainsbury’s, Debenhams and all the others. So I suggested doing a magazine, so they did this A5 magazine and got editors to write stories, rather than blurting out the offer.

DM: So where does the move into retail come from and how big a decision is it?

MS: It’s a natural progression to drive your brand awareness and people’s accessibility to the brand, but we have no aspiration to be on every high street. There’s a fairly logical ceiling to the number of locations we want to be in. Being cross channel, with people able to go into a store, shop online and have access to the brochure, you have the demographic information of where people are. In all the businesses I’ve worked in, stores have not had a full range of products, so you need to have the support of the other channels.

CR: We would love to have a fleet of stores around the country. What an amazing billboard for brands, and a way to get around the challenges of being a remote retailer and not being able to interact with the people you’re speaking to, so that’s one opportunity for us for future expansion.

AL: Mail order is still only about 8% of UK retail and there’s a staggering 92% of other retail sales out there to go for. So when you’ve reached a saturation point with a niche category in home shopping, retail is very appealing! And there are some good examples if you look at the likes of Lakeland and The White Company. We’ve used our customer data analysis and insights to prioritise pinpointing potential new retail locations.

KS: Where we have online data alone, it doesn’t always support the geographic analysis, but gravity analysis can look at population densities, and inform where to put the store. Again, you need to look at transactional development, value now and ongoing for those customers.

AL: We’re not trying to cannibalise existing sales but find incremental new customers who aren’t home shopping with us. It’s also about building propensity models and your cluster and customer analysis.


DM : Does it make any difference to the type of publication you produce if it’s going to be mailed to someone’s home?

JH: That’s down to your marketing objectives. Sainsbury’s has an in-store, ’pick up’ magazine doing a grand job. But it’s also segmented data, taken a group of people who were spending less than £10 a week and mailed them the customer magazine to drive them in store. Those two magazines are doing very different things.

CathC: We’ve launched a product called Dialogue Mail, which helps you engage with your customers, and understand what they’re looking for from you. It enables you to send out direct mail, and include a customised URL to a microsite where you can ask for customer feedback and people can request more product information or contact from you. You are able to monitor the customer journey. We also launched Personalised Integrated Media. You can download interactive content onto a CD or DVD, so including catalogues or relevant parts of them, allowing direct mail to be entirely relevant again. It fuses digital with traditional media, so you can now meet the needs of customers who prefer that channel. Audi and Mercedes have used it, and some financial institutions are going down that route.

DM:  How will catalogue operations evolve?

MS The beauty of this industry is to test and control and keep on refining it, whether it’s product, customer, challenge or frequency trends. You’ll see a lot more innovation as people drive that harder. It’s a far more cost-effective way to retain customers and grow your share of their wallet than recruiting new ones but it’s about getting all parts of the customer experience right. There’s still a trust issue with security, refunds, delivery, returns. But we’re on a march in terms of online usage: 65% of UK adults will have shopped online by 2012, and we’re only at about 45% now, so there’s an awful lot more to go at. Make sure your brand values remain consistent, never dilute them to chase a sale or technology fad. It’s an exciting time, and those that work hard will prosper.

EB: Also think about lapsed customers and try to reactivate them by giving them a different offering. Maybe send them a small brochure of best-selling products. Analyse your data, try to convert customers to multichannel, because they are the most profitable ones, but make sure the offer is the same across the board.

CR: Online is where you can monitor, make changes and test, but we’ll be making improvements in catalogues. There’s huge scope in frequency and personalisation. Mobile internet is an interesting, new area. We’ve got the I-phone and advances in browsing websites. We’re all moving into a new world, where in five or ten years’ time, digital natives will have grown up using technology in a very different way, so we’re going to have to adapt ourselves and existing customers to that.

AL: I see a day when retailers can use mobile to attract customers walking past the store and picking up a text saying, ‘swing on by‘ to drive footfall. For us, it is about using technology to make it ultra-convenient for our customers to shop, and focusing on giving them what they want, when and where. It’s not really more complicated than that. We’re reviewing online virtual catalogues and inviting more customer participation. We will use our tools and technology to try and be more timely and relevant in our customer communications.

JT: I think there are significant challenges for catalogues. We’ve got a big change in the way that people view brands; principally that you don’t own your brands any more - your customers do. So the way you interact with people through social media and demonstrate your wares will be a significant challenge. It isn’t going to be enough to simply have a cut-out of what your product is, and build the field of dreams and expect people to come.

JH: Content is key, you’ve got to engage. I think there’s still so much more marketers could do, especially as even more channels provide more challenges to catalogues.


CathC: The catalogue still has a valuable - albeit changing - role. In the current economic climate, it is an important vehicle for driving sales, so we should be continually evaluating and critiquing the catalogues we’re producing. We’ve produced a tool that helps clients do just that. I’m pleased to hear that everybody has such a rosy outlook for the future in cataloguing.

MultiChannel Marketing would like to thank Dave Murphy for stepping in as chairperson and preparing the ground work for the above roundtable. Many Thanks

Please note: Since going to publication there have been some changes in appointments of our roundtable most notably Alison Lancaster who is now Marketing Director at Harrods Direct