I have worked in an advisory capacity for many catalogue and bricks and mortar retailers and (with Greenfingers.com) have a successful online business that used to be a catalogue business and has gone from strength to strength since we stopped producing catalogues. Also, with Petplanet.co.uk we experimented with catalogues a few years back and concluded they were a bad idea for us; Petplanet now dominates its category online in the UK.
My distilled view, for what its worth, is that there are very few successful online businesses that would benefit from developing a catalogue. Why? Some of the reasons would include;
- The difference in the fundamental economics between offline and online trading (ie. the required margin structure and therefore appropriate pricing strategy),
- The potential conflict between appropriate online and offline pricing (driven by the above)
- The different buying and merchandising cycles required (print deadlines and mailing dates can come to dominate the rhythm of the business at the expense of the 'continuous' processes required to optimise the web; the optimum range online is different from the optimum range offline)
- The problem of dependency on Royal Mail and their pricing policies for catalogue retailers
- The 'big picture' issue that posting millions of catalogues is simply 'system inefficient'
Of course if you already have an established retail brand with customers who value your 'range editting' on their behalf then catalogues may continue to play an important role ... but personally I believe (and have for a while) that print catalogues are the past and online is the future (and most if not all of those arguing the value of print are those with vested interests in keeping that 'channel' alive). *UPDATE* The Sunday Times Fast Track 100 adds some weight to my argument about the death of catalogues, read more here,
Similar arguments apply for bricks & mortar retailers developing the online channel. Of course this represents a great opportunity for them and is a fundamental requirement ... but they will always struggle to compete with online specialists because of the conflicts between optimising price and merchandising online versus off-line.
I would not be surprised to see 'off-line category killers' start to experiment with additional online propositions under a different brand from the off-line business so that they can compete properly online.
Basically I think there are 2 kinds of online retail businesses: 'off-line retail brands trading online' and 'pure online retailers' ..
IMHO off-line brands are missing an opportunity unless they realise that to compete effectively with 'pure online retailers' they need to develop a specialist online brand that can be managed without concern for conflict with the existing off-line brand.