Making predictions on what is to happen is
always a risky proposition. If you’re right…you’re a genius and the
world loves you. If you’re wrong…well, you know. But the way I look at
it…No Guts…No Glory. So, here are 5 of my predictions for the 2000’s.
European Firms to Steal U.S. Catalogers’ Share.
A rash statement? Paranoid thinking? Maybe,
maybe not. Let me share a bit of my thinking and insight with you.
Everywhere you read there is talk about the great potential for US mail
order companies wanting to enter Europe. You hear all about how Europeans
love American products and catalogs and the growing number of companies
experiencing great success. After all, it’s a huge market, soon to be
improved for direct marketing with a single united currency, the Euro.
That’s all true and good. In fact, I think
the majority of US mail order companies don’t realize all the great
opportunities there are for them in Europe, and for some reason they’re
putting off learning until later. I predict this will prove disastrous for
many of them.
What really seems to be missing in all this
is the opposite fact: While we’re looking at the European market with
dollar signs in our eyes we’re blinded to the fact that Europeans see the
US as a mighty fine market opportunity. So good, in fact, that European mail
order companies are buying data on the U.S. mail order market like I’ve
never seen before.
In the last 12 months, the NMOA’s
International consulting services are at an all time high, the clients:
European direct marketers! Orders for "The Guide to Mail Order
Sales" covering the United States are also booming. Orders from Europe
that come into the NMOA for these data are more than three times the amount
received from US companies requesting European mail-order data. It’s clear
to me that European mail order companies are gathering marketing
intelligence on the U.S. mail order market for one reason...to plan their
And it makes perfect sense. Our market is
also huge. We have great delivery services. We have a single currency. We
basically all speak the same language. Our economy is good and we have money
to spend. We have easily accessible mailing lists segmented down to a gnat’s
In fact, Europeans will have an easier time
coming here then we will have going there.
Let’s not forget that Europeans are no
dummies in the world of mail order marketing. After all, it started there.
They will be extremely tough competitors. Right now European marketers are
studying every possible niche in the US mail order market for weaknesses and
potential. They are having samples of YOUR catalogs shipped to them for
study. Remember, for every market niche we have...there is someone in Europe
that can compete with you.
Another important point to think about is
that there is BIG money in Europe...and they have a good supply of venture
capitalists that are looking for things to invest in. And direct marketing
is one area they are very interested in. And unlike US venture capitalists,
Europeans are not afraid of taking chances on mail order start-ups or
expansions. They actively solicit and listen to new ideas.
What should we do? The starting point is
fairly simple: education and action! Learn all you can about the mail order
marketplace in Europe and who the key catalogs are. Get samples of their
catalogs and study them to see what’s selling and how it’s being sold.
Order information from service providers across Europe. Look into testing
your products in Europe.
When it comes down to it, will you be one to
act now and put yourself in the way of opportunity or one to react laterwhen it may be too late?
By 2002, the Euro will be in full use all
over Europe. Centralized bilingual call centers are already set up. European
catalogs will become bigger and more powerful, and they will enter the U.S.
market... your market. Consider yourself warned.
Web-only retailers will die out in large numbers and Mail Order/Catalog
firms that incorporate the Internet in their marketing strategy will be the
What is Internet/Web marketing? It’s Direct
Marketing. Don’t forget it. If you take away the new mystical words
"Internet" and "Web" and just describe the process of a
sale of a product you will see that the Internet/Web is nothing more than a
new direct marketing medium in which to promote products and services and
take remote orders.
I know what you’re thinking, "the
Internet can do a lot more than that," and that is true, but for
simplicity's sake this is the basic process I want you to think about: (A
person looks at a picture of a product and reads the words associated with
this picture. If this information provided with the product is sufficient to
make a purchasing decision then an order is placed.) Sounds like shopping
from a catalog doesn’t it? And when the smoke clears, that is exactly who
is going to be the leaders when it comes to making money using the Internet/Web.
Traditional mail order catalogers are going
to be the winners over strictly Internet/Web companies. Traditional
catalogers will supplement their printed catalog with new electronic
catalogs. They already have a mature and satisfied customer base, product
supply contacts, experience in processing and fulfilling remote orders, and
in keeping a sophisticated customer database and the experience and capability
of processing returns.
Millions spent by web companies on "Branding" turn out to be a
You hear much about "Branding"; web
only retailers are spending millions of dollars on advertising with the idea
of "Branding" their web site. This thinking is based on the hope
that they will gain market share that will give them a competitive advantage
in the future. Will it work? Have you ever heard the saying that "You
can’t buy class?" Well the same goes here. You can’t buy
"Brand." It’s something that has to be earned.
We consider the word "Brand" to
mean customer loyalty to a certain company or its products, which the
ultimate goal must be because you can’t have consistent market share
without customer loyalty, which in turn means repeat sales to the same
people. People become loyal to a "brand" only after they have been
satisfied with the product or their shopping experience with the merchant,
and/or perhaps the way they are treated when a return needs to be made.
However, there is also the fact that customer
loyalty is at an all time low. Many people simply shop where the price is
the lowest. So you can also spend millions and gain many one-time sales,
(many times at a net loss) and have a happy one-time shopper but still not
have any loyalty or long-term market share on which profits can be built.
True, when you spend millions of dollars
telling people about your company you can build notice of your
"Brand" faster, however, if the experience shoppers get is poor,
then you’re spending millions building the opposite, what I’ll dub "anti-brand". After last
year's Christmas problems with order
deliveries and returns you can see how this works. This also affects people
that only read about the problems and come away with a tainted view of your
company. You cannot buy trust or a loyal customer with advertising only. You
can only get them to…try you!
Always remember, you can’t buy class and
you can’t buy "Brand"…both must be earned.
The niche marketer or "small guy" will not only survive…but also
Keep this quote in mind: Nobody owns a job,
nobody owns a market, and nobody owns a product. Somebody out there can
always take it away from you. Because that’s the way it works!
The small guy must understand this verse and
understand that direct marketing is also niche marketing. And Internet
marketing is direct marketing, so for the small guy to be successful he must
focus on an area/segment of expertise. (Many of today’s successful direct
marketing companies started with the owner’s hobby and interests.) You
must become the known expert in your particular area or else you need to
have something that no one else has, (this can simply be private labeled
goods) and then you can compete. You will be able to capture a share of the
market segment because large companies can’t service the customer like you
can. This is where you have the best chance of building loyalty in an
un-loyal market place.
So, can a small guy survive with all these
so-called "big guys" spending millions promoting their company?
Yes, it just takes longer. If you are knowledgeable about what you do and
sell, you will build a loyal customer base. Your brand will build slowly but
it will be strong.
Rising postal and paper costs affecting catalogers will be helped by new
printing strategies that lower the overall cost of printing catalogs.
I predict this because I have been contacted
by a person that is working on a program right now that will prove to lower
catalog printing costs by as much as 63% for smaller runs and about 16% for
very large runs.
It has become increasingly evident that the
inordinate rises in postal rates especially those about to be thrust upon
us, and the continuing repetitious rises in paper prices are
"getting-out-of-hand" and both are quickly becoming decided detriments
to every catalog's future. It is our responsibility at NMOA to address the
desperate situation as these have become, to enable the cataloger to
maintain his economic "health" and to fortify his or her ability to
"Counter-measures" must be drawn
upon. It is this person's consummate knowledge of the printing process and
its equipment, its unique production abilities, formatting abilities and a
talent to configure producible printed product which will maximize
production efficiency and BROADEN MARKETING EFFECTIVENESS beyond anything
This person has developed a key strategy that
will produce amazing savings for all catalog marketers. To give you an
example of these savings possible when participating in our new plan
consider the following:
This strategy will show how a 16-page catalog
producing 25,000 copies will reflect a saving of more than 62% of the normal
expenditure; or this strategy will show how a 48-page catalog
producing 100,000 copies will reflect a saving of more than 28% of the
To put these savings into a different
- This strategy will show how 25,000 copies of
a 48-page catalog can now be produced for the same cost 25,000 copies of a
16 page catalog requires.
- Similarly, This strategy will show how the
customary charge for 250,000 copies of a 16 page catalogs will NOW be able
to produce 250,000 copies of a 48 page catalog.
- This strategy will show how 100,000 copies
of a 32 page catalog can be produced at the same cost 25,000 copies of 32
page catalog has normally required.
All savings can be realized WITHOUT ANY
ALTERATION OR DISTURBANCE TO THE CATALOG'S GRAPHIC INTEGRITY.
If you produce a catalog or have plans on
adding a catalog to your marketing mix, this new program will be very
important to you. If you are interested in learning more about this exciting
breakthrough, get your e-mail address signed up at the NMOA web site.
John Schulte is a Marketing Consultant and Strategist. He is also president and chairman of the National Mail Order Association.