Catalogs and e-commerce are critical individual components in distributors’ marketing arsenals. Distributors that have taken advantage of clear synergies between the two are reaping huge benefits, including cost savings in product information management and marketing. What’s more and, perhaps most important, they are making buying easier for their customers by allowing them to purchase when and how they want.
Results from a recent MDM-Distribution Strategy Group survey highlight the potential benefits of taking an integrated approach:
- 85 percent of companies (see Figure 1) who have a successful catalog believe that Web and catalog are synergistic or that their catalog helps drive Web sales. These companies consider their catalog effective or highly effective.
- 73 percent of companies (see Figure 2) who have a successful e-commerce channel believe that Web and catalog are synergistic or that their catalog helps drive Web sales. For these companies, e-commerce is at least 10 percent of total revenue.
- The three distributors (Grainger, MSC Industrial Supply and McMaster-Carr) who were considered by their peers in this survey to have the best websites were also considered by their peers to have the best catalogs. All three of these companies have had long-standing catalog sales before incorporating e-commerce, yet they excel at both.
Here is a look at how synergies between the two marketing platforms can work.
Product Information Management Synergy
Most distributors get product data directly from manufacturers. The data is typically scrubbed, classified, and then placed into a product information (PIM) or content manager. The information required on each product is similar whether it goes into a print catalog or onto the Web. Clearly, this provides enormous efficiency for distributors that use both Web and catalog channels.
Completeness and accuracy of product data are essential for many aspects of marketing. It turns out that distributors with successful Web channels and catalogs are much more proficient at getting complete and accurate information. According to the survey, nearly 75 percent of distributors with successful Web channels consider their product data to be highly complete versus only 39 percent of other distributors. Over 60 percent of distributors with successful catalog operations consider their data to be highly complete versus 36 percent of other distributors. When it comes to product data accuracy, the difference is even more pronounced between successful catalog distributors with 82 percent reporting high product data accuracy versus 18 percent for other distributors.
Kele Inc. in Memphis, TN, is a distributor of building automation products with catalog and e-commerce channels. Dean Mueller, vice president of marketing at Kele, has instituted a technical evaluation process in which some products are evaluated to verify specifications before product information goes into their PIM. MSC has an internal PIM system that supports both the print merchandising team and its e-commerce marketers. This ensures they have consistent and accurate product specifications regardless of the channel customers choose to use for their purchase decisions. The cost for Kele’s and MSC’s commitment to accurate information is spread across their catalog and Web platforms.
While it is difficult to argue causality between successful Web/catalog operations and good product data, the correlation between the two is still strong. It is likely that using data in more than one context improves the overall quality of the data because the data receives more internal and external scrutiny. Better product data makes it easier for customer to find and purchase what they need.
An additional benefit lies in the supplier relationship; more co-op funding can often be secured for Web and catalog rather than either one alone. Many suppliers recognize the increased exposure their products gain when featured in both channels and are willing to contribute with both financial and technical support.
Integrating the look, feel and messaging of a distributor’s catalog and website helps build brand equity. Customers tend to have a greater level of trust when purchasing from suppliers who demonstrate consistency. As noted by Peter Bingaman, chief marketing officer at MSC: “Both online and print media work hand-in-hand to provide a consistent view of MSC.” Brand equity is further enhanced when the customer’s experience is consistent across channels, assuming that experience is a good one.
Distributors who successfully integrate print catalog and e-commerce channel marketing also create a greater level of legitimacy. Nearly all industrial distributors who were in business in the 1990s created catalogs as their primary marketing vehicles and have since added an online presence. Those who have maintained both channels have reinforced their brand equity through the confidence they have built as long-standing suppliers. This is in contrast to the way customers may view some online-only businesses that are merely storefronts, or agents who simply process and drop-ship orders from other organizations.
In most industrial businesses, when a computer is not available, catalogs are, and customers needing a product solution reach for the company’s with which they feel most confident. Again, the multi-channel marketing distributor has the edge in getting that business.
MSC’s Bingaman agreed with the importance of multi-channel capabilities, saying: “At the end of the day, we are enabling our customers to access the information they need in a way that works best for them. But whether our customers choose to utilize online or print media, we continuously work to make sure our data is concise, consistent and relevant in helping them make the best purchase decisions.”
For many customers, when comparing distributors, it is much easier to flip back and forth between pages among different catalogs than it is to bounce between multiple sites, multiple products within sites and the wide variety of available brands.
The customer call that begins with “Hi, I am looking at your website and I have your catalog opened to page …” is becoming more common. This may happen even more with customers who are not quite sure of the right solution.
Kele’s Mueller says that “the single most important thing is the printed catalog. Web is important as a sales vehicle but also as a broader information source.” Indeed, many companies use the Web to reach prospects and then use their catalogs to ramp up new buyers or to deepen wallet share with established customers.
Given the profound synergy between Web and catalog, it is important for distributors who have just one to strongly consider adding the other. This consideration should be guided by two key questions.
First, given that you have already aggregated the product data for Web or catalog, what will be the incremental cost of adding the other? The incremental cost may be surprisingly low. For many distributors, the cost will be less than $500,000 if co-op funds are applied. If a full-line catalog is too expensive, instead evaluate publishing mini-catalogs.
Second, what is the revenue benefit of having both web and catalog?
Benefits will be realized when customers purchase more because they can purchase when and how they want.