Catalogs still thriving in an age of growing e-commerce

David Sharp

Friday, Dec. 3, 2004 | 9:34 a.m.

FREEPORT, Maine -- L.L. Bean projects that its online sales will overtake its catalog business within two years, but don't expect any trees to be spared in the process.

The company has no plans to scale back its mailings of 200 million catalogs a year. Nor do many other mail-order companies that are flooding customers' mail boxes this holiday season -- the number of catalogs shipped to homes and businesses has held steady despite online competition, and actually grew last year.

"People who were caught up in Web mania thought it would supplant the catalog," said Madison Riley of Kurt Salmon Associates, a retail consulting firm. "That has not come true, and I don't think it will ever come true."

In what's known as a multi-channel retailing world, catalogs are an important marketing tool for driving shoppers to other channels. Big retailers like L.L. Bean are active in at least three channels: stores, e-commerce and catalogs.

It was just five or six years ago that some analysts were predicting the Internet would render catalogs obsolete.

But catalogs survived even as Internet sales have grown at a faster pace. Internet sales are projected to rise 27 percent to $52 billion this year while catalog sales will grow 6.7 percent to $143 billion, said Amy Blankenship of the Direct Marketing Association, a New York-based trade group.

L.L. Bean once shared the view that online sales would lessen its reliance on printed catalogs. But the company found that the two were intertwined, with catalogs giving a significant boost to Web site traffic and shoppers freely switching between the channels, said Steve Fuller, Bean's marketing chief.

"One of the mistakes people made was in thinking of the channels as discrete, but it's the same households. Some days they call, some days they order from the Web site, some days they drive to the store," he said.

Sales dropped when Lands' End cut back on the catalogs it sent out in 1999, and the company then decided to boost mailings the following year, according to the Print E-business Report published by the Printing Industries of America.

A Lands' End spokesman declined to release catalog numbers. The E-Business Report says Lands' End distributed 270 million last year.

Catalog companies generally shipped out the same number of catalogs from 2000-02 despite three postal increases; the numbers bumped upward last year to 17.5 billion. A similar number is expected to be sent this year, Blankenship said.

Retailers have become smarter about the way they use catalogs, which are expensive to produce and mail. Companies including Lands' End and L.L. Bean have discovered that their catalogs motivate shoppers to go to Web sites or visit stores -- or pick up the phone, said Riley.

And if a catalog's job is to provide inspiration instead of a comprehensive listing of goods, then the catalogs can be smaller, offering a cost savings to retailers, he said.