What is Really Important to the Consumer?

by Stephen Lett

image of 3 flags that say merchandise

When it comes to capturing the attention of the consumer, what’s really important? Is it the weight of the paper, trim size of the catalog, design or layout of the catalog, the copy, etc.? While all of that is significant, most important to the consumer is the merchandise offering. Consumers want unique merchandise. That’s what grabs their attention. The consumer is looking for products that are not available everywhere. Price is not a barrier when the product offerings are truly exclusive and different. I taught Direct Marketing at Indiana University for several years and I always told my students to write down “merchandising” if they did not know the answer to a question to receive 50% credit. I wanted these smart, second year MBA students to know the importance of merchandising. Product selection (and circulation) determines the success of any catalog/Internet business.

What drives the numbers, i.e., sales and profits? The number of merchandise offers (as opposed to the number of SKUs) in a catalog drives the revenue. An offer is defined as a product. This is different than a SKU. A SKU could be a different color, size, etc. Again, look at offers not SKUs. In a consumer catalog, on average approximately 30% of the merchandise offers should be new every printing. Offers are dropped based on the 1/3, 1/3, 1/3 rule. This means that 1/3 of the offers are the top performers, 1/3 are not great sellers but okay and the bottom 1/3 are not worthy of taking up space in the catalog. The bottom third are replaced by new products to keep the catalog fresh and interesting to the consumer. I have always been a big advocate for adding pages because this strategy represents a cost-efficient way to grow a catalog business. Adding pages and more SKUs assumes some basic rules:

  1. Merchandise is available to support the space.
  2. Product density is maintained.
  3. Pages are added gradually in increments.

What exactly should your page count be? To get a better understanding of adding pages and what a page count strategy should look like check out the article, “The Analytics of Determining Proper Page Count”. Graphics are certainly important to the consumer. The use of color increases brand recognition and consumer confidence. Different colors, i.e., red, blue, green, etc., communicate different moods to the consumer. The copy is also important. For example, the two most powerful words are “sale” and “guaranteed.” Consumers are more likely to open the catalog and consider a purchase when “sale” appears on the front cover. Consumers also buy with more confidence when they see the word “guaranteed.” Paper grades and weights need to be consistent with your brand. A/B split testing various paper grades and weight is easy and inexpensive to test. At Lett Direct, we have conducted many paper tests over the years for our clients. If you are thinking about upgrading to a heavier stock to increase response, don’t make this change without A/B split testing it first. Don’t assume the heavier stock will yield a higher response that will offset the additional cost for paper because it may not. Over the years, I have seen catalog executives spend enormous amounts of time worrying about the graphics. Much time is spent arguing over the copy, the layout, photography, etc. Yet in the end it’s the merchandising (and circulation) that will determine the success of your catalog. Make sure your priorities are in the right places.