Sears perfected the direct-to-consumer (DTC) model, long before DTC was widely known. Macy’s continued it with its legendary Christmas catalogs, as did many others, but the Sears catalog was the Gold Standard.
While the catalog fell out of favor over the past 15 years or so, it is making a comeback. According to eMarketer, DTC revenues grew about 24% in 2020, and the marketing push by brands is driving much of that.
DTC is the promotion and sale of products to consumers directly by the brands or manufacturers, effectively eliminating the in-store experience. While brands often do have physical retail stores, they are increasingly marketing their products directly to consumers. One of the ways they are doing that in 2021 is through catalogs mailed directly to homes.
“We are seeing a huge resurgence in direct mail,” Polly Wong, president of Belardi Wong, a direct mail company for top brands such as Parachute, Levi’s, Untuckit, Pottery Barn, Williams Sonoma and more.
Wong tells Modern Shipper that brands are using a mix of approaches to reach consumers, including billboards and text messaging, but catalogs are a popular choice.
“You really only have three primary acquisition channels online,” she said. “You have paid social, paid search and display. What’s happened is the digital media costs increased double digits and exploded last year. As digital marketing has become expensive, competitive and saturated, DTC brands [started] looking for new channels. What’s old is new again.”
Wong said a Facebook ad could cost a brand between $2 and $4 per click, but a full-sized catalog can be mailed to a consumer for 60 cents. In addition, changes on the social platforms are making it more difficult for brands to effectively measure and target audiences.
“You can only say so much in a paid search link; you can only say so much in a Facebook ad,” Wong noted. “It’s very hard to replicate what you can say in a catalog.”
Today’s brand catalogs are less like the Sears catalog and more like lifestyle magazines. They may tell a story, embedding the company’s products inside that story. The goal, Wong said, is to drive the consumer to buy – whether that is online or by visiting a store.
It is a trend that was occurring prior to the onset of COVID-19, and it has accelerated since then. Still, Wong said successful brands are incorporating a variety of DTC approaches, including paid clicks and paid search. The reason? Only about one-third of what a customer buys will come from the catalog, but that printed copy is critical to building a relationship with the consumer.
“Catalogs are really channel drivers – [they] drive consumers to stores and drive them to e-commerce,” Wong said.
The demographics of today’s catalog reader are changing as well. A decade ago, 80% of catalogs went to women over the age of 55, Wong said. Now, “all our DTC brands are targeting the [25 to 45] customer.”
Belardi Wong has seen tremendous growth in marketing spend in the past year, Wong said.
“In our world, pre-pandemic, if you increased your marketing spend by 10% you would hope you would increase your sales 10-15%,” she said. “But what happened last year is that marketers increased their spend 10%, but it drove sales 30%.”
A majority of Belardi Wong clients (86%) reported April sales above last year and 76% said their sales in April were above projections.
The success is not driven only by catalogs, though. More than half (54%) of the company’s clients have added SMS messaging to their marketing mix and 24% said they planned to.
Having the right marketing mix is important, Wong said, as brands adapt to the changing retail landscape.
“They want to focus on direct to consumer because obviously retail traffic [in stores] has been down, even before the pandemic,” Wong said.
Click for more Modern Shipper articles by Brian Straight.
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