Consumers Shift from Catalogs to Web

The importance of offering consumers multiple channels from which to shop was highlighted once again in a report on the catalog industry from DoubleClick’s Abacus division. The Fall 2001 Catalog Industry Trend Report has found a consumer purchasing channel shift — away from catalogs and toward online shopping.

According to the report, fewer online consumers are making catalog purchases, indicating that online consumers may have shifted some of their purchasing to the online channel. Catalog dollar sales for the 12-month period ending June 2001 dropped 5.7 percent from the previous 12-month period. While nearly the same number of households purchased (43 million), average order sizes declined. When analyzed on a monthly basis, February and March 2001 showed the sharpest declines, with 9.5 percent and 14.3 percent, respectively, from the same period in 2000, while June 2001 showed signs of recovery.

More than 64 percent of online consumers reported making a catalog purchase in the last six months, down from 69 percent in 2000, according to Diameter’s @plan database. @plan also found an increase in online purchasing. Two-thirds (67 percent) of U.S. online users report making a purchase in the last six months in 2001, up from 63 percent in 2000. This indicates that many consumers have shifted their purchasing to online from other traditional channels, including catalogs.

“The data allows us to conclude for the first time that the decline in catalog sales is most likely due to a shift to the online order channel, along with a combination of fewer mailings and more cautious spending by consumers,” said Brian Rainey, president of Abacus. “The data reveals a high cross-over between online and catalog and demonstrates that catalogers require an effective strategy to acquire, retain and market to online customers.”

The Apparel and Accessories catalog market saw an increase of nearly 1 percent in dollar sales for the 12-month period ending June 30, 2001. However, sales for the first half of 2001 were down 7 percent from the first half of 2000, driven by lower average order sizes. Sales in the Home Decor and Furnishings market declined 2.8 percent for the 12 months ending June 30, 2001. Unlike the apparel market, order sizes remained the same, with $146 in June 2000 compared with $147 in June 2001 for example, while the number of households purchasing declined. The Gift market declined 4.4 percent over the same period.

Percent of Holiday Shopping
Budget Spent at Channel

(U.S., 2000 vs. 2001)
Channel Percent of
Shopping Budget
2000 2001
Stores 80% 79%
Catalogs 7% 6%
Online 13% 15%
Source: Goldman Sachs, Harris Interactive
& Nielsen//NetRatings

More than 16 percent of online users reported purchasing in the Clothes/Accessories category, up from 12.6 percent in Fall 2000; more than 30 percent of online users reported shopping in Fall 2001, up from 25 percent in the Fall 2000. This market has also grown to be the third largest online merchandise category after Airline Tickets/Reservations and Books.

Similar to other consumer shopping channels, catalog sales suffered a sharp but short-term decline in sales after Sept. 11. Beginning on Sept. 21, dollar sales rose sharply and stayed above 2000 levels for five consecutive weeks. Consumer catalog spending seems to have recovered quickly in the weeks following the attacks, indicating good news for catalogers who maintained their holiday mailing schedules. Interestingly, from a geographic basis, although certain states were directly impacted by the attacks such as New York, New Jersey, Connecticut, Washington D.C., Virginia, Maryland and Pennsylvania, they all followed similar catalog purchasing trends as the rest of the country.

Catalog sales have also fallen behind online sales when it comes to the percentage of the holiday spending budget. According to the eSpending report by Goldman Sachs, Harris Interactive and Nielsen//NetRatings, brick-and-mortar retailers continue to dominate in attracting shoppers, with consumers citing that they expect to spend 79 percent of their holiday budget shopping at physical stores. Consumer shopping budgets slated for online shopping increased year-over-year, with shoppers planning to spend 15 percent of their holiday gift budget at e-commerce Web sites this season, compared to 13 percent spent in 2000. But shoppers plan to spend less this year buying holiday gifts through catalogs, marking 6 percent of their budget for catalog orders.

“The online channel is a significant, and growing component of the holiday economy in the United States,” said Sean Kaldor, vice president of analytical services, NetRatings. “While only 1 to 2 percent of U.S. retail spending is on the Web, consumers expect to spend 15 percent of their holiday budget online.”

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