Bloomie’s Dropping Catalog, Focusing Online
Bloomingdale’s announced last week that it plans to stop publishing its Bloomingdale’s By Mail catalog and shift its entire direct-to-consumer focus to the its website.
The department store made the decision after seeing sales growth at Bloomingdales.com far outpace its catalog business. The company said it would discontinue publishing Bloomingdale’s by Mail in early 2009. Bloomingdale’s direct-to-consumer business is expected to generate more than $1 billion in sales this year.
“Bloomingdale’s is focused on growing its online business, increasing profitability and reflecting a seamless brand and merchandise selection, whether it be in-store or online,” said Michael Gould, chairman and chief executive officer of Bloomingdale’s, in a press release. “As more customers turn to the Web for access to Bloomingdale’s, their shopping experience must be brand-right. We intend to implement various enhancements to the Web experience, including ones that can bring to life some of our celebrated special events. Eliminating the paper catalog is also consistent with our sustainability and environmental policies of communicating more with customers electronically and less in paper.”
Discussion Question: What is the nature of the relationship between catalogs and websites in direct-to-consumer operations? Is Bloomingdale’s making the right decision by dropping its catalog and focusing entirely on its website operations?
Good move, Bloomie’s. Send me a postcard once in awhile offering X% off my next order off your website. That’s all I (and most people) need. I thought when I moved from New York to Vermont that the catalogs wouldn’t find me. They did. In our tiny town’s post office, huge recycling barrels are placed next to our PO boxes. They are filled to overflowing every day, with (you guessed it!) catalogs.
This could very well prove to be a serious mistake. As many multichannel retailers have discovered in recent years, there is a synergy between catalogs and web sites that often result in higher sales when the customer uses both mediums to shop. There is also evidence that consumers who buy from a retailer’s catalog, web site and stores spends substantially more than a consumer who only uses one or two of these shopping methods.
One of the most common ways women use catalogs is to sit in a chair or on their bed while browsing through them. They will frequently use sticky notes to mark items they are interested in seeing additional colors or simply want to see an online photograph. Once they have identified what they are interested in, they will then go online and place their order. Without the catalog retailers lose this step in the shopping ritual.
As retailers have long known, rituals play a very important role in how, when and where people shop.
I expect just like many other cost cutting moves, this one will at first seem to have not lost any sales. But over time, as sales are off slightly, it will be hard to find out where the train started to leave the tracks. Many other things will be blamed but this could very well be one of a number of things that just makes this retailer just not as much fun to shop at any more. The comment about ladies reading the “wish list” while attending a soccer game is a great example. Are they going to be on their laptop surfing the net in the future at the soccer game?
Way to go green, Bloomie’s! Eliminating the print catalog will save paper, ink and transportation costs and fuel. Great move!
The killing of the Bloomie’s catalog has much more to do with this corporation’s steady and often ill-conceived cost cutting motives, than with their marketing genius. I predict that, as has occurred with sister company Macy’s, their profits will suffer long term for it.
There is a complementary component of high-end catalog and online shopping which will be lost when only one of the components (online) is present. Surely I am not the only one who sees busy women reading catalogs during their kids’ soccer games, while waiting at doctor’s appointments and in workplace breakrooms. Many of the decisions made concerning purchases are later culminated on line, sure, but the “oooh, I have to have that” moment (at full price) often came from the catalog exposing them to things they didn’t even know existed.
Everyone I know uses a search engine and shops online when they are targeting a particular item–like a plain red sleeveless silk sweater, cropped white linen pants, or a specific brand of beige spiky sandals. But the big impulse buys of multiple matching pieces, and true profit to retailers like Bloomindale’s, come from customers discovering what looks and colors are “in” this spring, and from spreads of exciting new bed linen assortments seen first in glossy catalogs.
There is little reason to question Bloomingdale’s decision. After all, they see the metrics and we don’t.
Key is that catalogues are losing favor and Bloomingdale’s has the courage to cut the cord first. This illustrates strong management and a focused vision.
It’s a logical step, an evolution in the process….
There are retailers that still require a catalog; it is very much a part of their media mix. Bloomingdale’s, with its customer base, is not part of that group.
By focusing on the web, Bloomingdale’s can move more decisively into social marketing and online communities where its product lines can be better promoted to the affluent consumer base, and continue the .com growth of sales.
In the beginning, many web sites were just electronic catalogs. Web sites started with just listing items. The web site could list many more items than a retailer could afford to include in a catalog. The majority of sales were phone driven.
In the next phase, consumers could purchase directly online. With internet sales continuing to grow at a rapid rate, the question is, does a retailer even need a catalog? The answer depends on the customer base, i.e. target market. Bloomie’s customers are highly likely to have computer access and thus a catalog is unlikely to add much. On the other side, direct consumer communication is important to remind consumers of the web site. This is why the internet only approach never does as well as a multi-communication channel approach.
Catalogs are going the way of the VCR. That said, stopping all production of VCRs, while some customers still rely on them is not the way Hollywood would play the game.
We lost 5 catalog clients this year to bankruptcy filings.
The catalog triple whammy is web, economy, younger buyers doing it ‘their way’ and Catalogchoice.org (the easy ability for consumers to opt out of paper).
Yes, cut your catalog spend and do it fast…but killing the catalog is going to cost you many of your older customers and force you to spend a lot more on postcard awareness campaigns and web marketing.
“Bloomingdale’s is America’s only nationwide, full-line, upscale department store…” (from the press release)
Bloomingdale’s has stores in 12 states. Is that “nationwide”? And what does “full-line” mean?
About those catalogs: department stores used to think catalogs were free because they got co-op money from manufacturers to produce them. The mail and phone response was always minimal, but the department stores believed that catalogs drove foot traffic. Let’s see if 1 to 3 years from now, Bloomingdale’s revives catalogs, based on a rediscovery of marketing economics. Although Bloomingdale’s is part of a publicly-held company, Macy’s, its expenses, sales and profits are not public information.
About Bloomingdale’s computer systems: Macy’s annual report says their new point of sale systems rollout will finish by the end of 2010.
Maybe it’s all good. And at this time, when you go to make a return of an online purchase in one of their stores, they can’t take you at the POS. You’re sent to a customer service counter where associates look up your transaction with technology that appears to be 30 years old. Call me skeptical, and I have to wonder what’s up with that.
I think Bloomingdale’s is making a huge mistake. While I never call in or mail in an order form from a catalog, I have to say that they are viewed time and time again. The catalogs seem to travel from the couch to the bathroom to the bedroom and to my desk at work where other people look at them too. When it does come time to place an order, I do prefer to do it online but usually have the catalog in hand when I do. Without having the catalog, I can’t say that I would go to Bloomingdale’s site as my first to shop.
Aside from being able to create a unique customer experience online, the environmental benefits are an even better reason to drop the catalog.
Maintaining strong customer relationships is an ongoing and ever changing process. The move towards web based shopping is just another step. And while a few may leave, I believe many more will follow.
Catalogs’ share of multi-channel spending is declining, but they are still playing a crucial, if changing role: driving traffic to web sites and to physical stores.
That’s why such multi-channel leaders as Victoria’s Secret, Smith & Hawken, Talbot’s, L.L.Bean, Saks Fifth Avenue, Williams-Sonoma and Neiman Marcus are increasing the number of catalogs they send out in the mail. According to the Direct Marketing AssociÂation, there were over 20 billion catalogs mailed last year, the second consecutive year-over-year increase of more than 5%.
Victoria’s Secret ships 400 million catalogs a year, or 1.33 for every American. Last year its catalog and online orders accounted for nearly 28% of its overall revenues of $4.4 billion. That represented growth of 10%, more than double the 4% increase from its stores.
Now that catalogs have a new mission as brand-building devices, companies are making fundamental changes in their design. Because catalogs are meant to give consumers ideas instead of listing every item in the product line, marketers can make them smaller, more interesting, more enticing, and more personal. Indeed, by sending out different versions of catalogs to different consumers, savvy retailers can test which ones work best for which market segments.
And of course, inducements to visit the retailers’ web site are sprinkled everywhere in today’s (and tomorrow’s) catalogs.
I welcome this change to online sales. I have always felt that too much money goes into producing those expensive looking mailings and catalogs.