Catalog Marketing, Cont.

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If you like O. Henry, you'll love I. Magnin; if you've just finished The Man Who Mistook His Wife for a Hat, you'll probably go for The Sharper Image. That, more or less, is the reasoning behind retailing's latest assault on the sensibilities: mail-order catalogs as reading material. And the plot already has taken a sickening turn. After a successful market test, Waldenbooks, the country's largest bookstore chain, with more than a thousand locations, has started selling catalogs -- the kind householders are used to receiving free by the score.

But it's the ones the mailman doesn't bring that are at stake here, says Jay Walker, chairman of Catalog Retail Corp. (CRC), the Connecticut company that developed the program. "Bookstores are the perfect market," he argues. "People are browsing for printed material to read; they're in the mood for shopping." CRC's circular racks, each displaying 48 catalogs, will introduce new avenues for shopping by print and bring fresh customers to mail-order lists. Fine in principle, but -- as the world's oldest profession often is asked -- why should a customer pay for something that he can get at home for free? The company's gimmick: a coupon accompanying each catalog worth $5 off the first order.

"This is a new frontier for us," says The Nature Co.'s Robert Wrubel, who is initially committing 20,000 copies of his spring catalog. "If they told us we can distribute them in grocery stores, I'd have said no thanks, that's not the right universe. But a book buyer is closer to the customer we tend to get." So far, more than 150 catalogists, including such upscale names as Mark Cross, Eddie Bauer, Hammacher Schlemmer, and Bergdorf Goodman, have signed up, with some 200 more expected.

By the end of this year, CRC hopes to have expanded to B. Dalton's 700 bookstores, then plans an attack on the nation's newsstands. Slick entries from snooty collections like Horchow's and thick tomes like low-balling 47th St. Photo's 400-pager, are surely worth the price of a traditional magazine, Walker figures. Hence the catalogs' average retail of just under $2. Newsies aren't apt to argue, since a catalog's profit margin is about twice that of a periodical; unlike magazine publishers, mail-order companies are content to give their wares away, simply to get them into new hands. The cost is about the same as mailing to a rented list.

If CRC's hoped-for 350-catalog rollout gains steam, the stands undoubtedly will bump magazines to make room for the more profitable products. "The two industries are on a collision course," Walker warns. "Magazines have been sitting there for years thinking nobody's going to challenge them for space, and along comes the catalog industry -- at five times its size -- saying, we're going to push you right off."

Last updated: Apr 1, 1987




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