Connect With the Customer and Know Your ROI

Forget eating bugs, running obstacle courses and forming alliances. To be a catalog survivor you need to increase profitability, decrease back orders and know how to measure return on investment. Three marketers shared their survival strategies during the Annual Catalog Conference in Chicago last month.

Anthropologie will circulate 18 million catalogs this year, 5 million more than in 2003. The company had direct revenue of $40 million in 2003 and hopes to hit $52 million this year.

Anthropologie’s numbers improved by getting to know its customers. The company conducted fitting sessions for clothing, getting opinions on style of apparel, and had best customers in the home department spend $300 and then show how the products fit into their domestic décor. Anthropologie has a house file of 440,000 and targets women age 26 to 45. An average order runs $80 to $200.

Setting barometers has been a key strategy for her company, said Heidi Radigan, director of marketing for What on Earth and Art & Artifact, owned by Universal Screen Arts.

Universal establishes merchandising barometers by category and subcategory, looking at dollars generated vs. their depiction in the book, and an item’s revenue contribution and demand vs. the square inches it takes up in the catalog. Purchasing barometers include annual inventory turnover rate, while marketing barometers are response rate, average order, buyer file performance and the percentage of ad costs vs. net sales.

What on Earth, which sells gifts, home accessories and casual apparel, has a file of 350,000 who made purchases over the last 12 months. Orders run about $48, Radigan said. Art & Artifact, which markets home decorative accessories, has a 95,000-name last-12-month file. Its average order is $100.

Reducing back orders was vital to Design Toscano’s survival strategy, said director of marketing Erik Martinez. Because the company gets products from remote sources — furniture from Indonesia that took six weeks to carve and six weeks to ship, for example — back orders were averaging 28% of monthly sales in 2002. By 2003, that had been cut to 9% thanks to product diversification.

Straight percentage discounts have worked better than free shipping offers because of the oversize nature of many of its pieces, he noted.