The holiday season is the shopping season. It is also the catalog season, with tens of millions of glossy catalogs sent out to encourage people to shop. Although there’s nothing new about it, this year we can finally say there is a light at the end of the catalog tunnel. I’m talking about Catalog Spree, “the ultimate digital catalog shopping experience for the iPad.”
This iPad app represents an alternative that finally can beat the printed catalogs: It’s convenient, user-friendly, provides customers with a fun and easy shopping experience and retailers with an effective way to engage with customers, not to mention a better ROI. In other words, it’s a game changer.
I don’t know about you, but I see printed catalogs as one of the most vivid examples for the unsustainability of the existing economic model. Think about it – each year, about 19 billion catalogs are mailed to American consumers. It means that every American receives more than 60 catalogs every year on average. Why? Because according to the Direct Marketing Association, printed catalogs provide a 7 to 1 ROI and an impressive direct order response rate of 2.24 percent. With such impressive figures, is it surprising retailers are printing hundreds of billions of catalogs every year?
Yet, the only reason printed catalogs generate such ROI is because retailers don’t pay for their environmental impacts. These externalities include, according to Catalog Choice, 53 million trees that produce 3.6 million tons of paper, 5.2 million tons of carbon dioxide emissions, and 53 billion gallons of wastewater. If you would add these elements to the bill, I doubt how attractive the ROI of catalogs will look then.
In the last decade or so we have seen endless efforts to reduce the number of catalogs. Organizations and activists fought fiercely against retailers, tried to educate both the public and retailers why catalogs are bad for planet, created innovative tools such as Catalog Choice to help people opt out, supported legislation to ease the opt-out process, and so on. There were few victories here and then, but in all the number of printed catalogs continued to be stable.
The only thing that has put a dent in what seemed to be an unbeatable system is the economy. Rising production costs together with the sluggish economy got some retailers like Bloomingdales, Nordstrom and J. Crew to stop mailing catalogs to their customers and start showing them on their website. The digital shopping experience they provided was nice but not that great. Something was still missing there. Then came the iPad.
Joaquin Ruiz, the co-founder of Padopolis, the company behind the Catalog Spree app, saw the unique advantages of the iPad compared to the status quo. “You can’t cuddle up with a laptop. You can easily hold a tablet in one arm. It’s as easy as holding a book. The iPad is actually changing behavior and changing the way people interact online,” he said in an interview to Portfolio.com.
He wasn’t the only one to see the potential in the iPad for a better interaction between retailers and customers. In 2011 we have seen a growing number of companies and websites that are offering catalog apps for the iPad, like Google, TheFind and Net- a-Porter.com. “For years, shoppers have enjoyed flipping through glossy print catalogs to be inspired, discover new trends and find great products,” said Kinnari Jhaveri, Strategic Partner Development Manager on Google’s Commerce Team. “Today, mobile technologies can make catalog shopping more engaging, social and creative.”
Catalog Spree is certainly one of the most successful apps in this group. The app, which launched in April, 2011 enables users to flip through catalogs from 150 retailers such as Coldwater Creek, JCPenney and American Girl. The app has been successful: it already has more than 150,000 users. Its business model is based on revenue share with some retailers and payments for traffic from others. It’s not clear if the company is profitable yet, but it secured a $6.1 million investment in Series A funding, led by Comcast Ventures, with participation from BlackBerry Partners Fund and El Dorado Ventures.
The investors certainly believe that Catalog Spree is a game changer. “Catalog Spree is changing the way people engage with retail brands – and the way brands interact with their customers,” said Michael Yang, managing director at Comcast Ventures. “The company excels at delivering an interactive user experience that defines the future of mobile shopping.” Yang and others see in front of them a superior alternative to printed catalogs that is better for shoppers and for retailers at the same time. Add to that the fact that printed catalogs is a $300 billion industry and you start to see why they decided to invest money in Catalog Spree.
Printed catalogs won’t disappear, at least not in the next couple of years, but the seeds of change are being sown this year by Catalog Spree and other catalog apps. Right now you have companies like Filson that partners with Catalog Spree, but at the same time still sends million 84-page catalogs. Eventually, with more data collected and more iPad devices sold, Filson will probably see the effectiveness of catalog apps and decide to save the $1 million it spends on printed catalogs. It’s not clear yet when it will happen, but I’ve got a feeling that this day will come sooner than we think. For the sake of tens of millions of trees I hope I’m not wrong.
Raz Godelnik is the co-founder of Eco-Libris, a green company working to green up the book industry in the digital age. He is also an adjunct professor in the University of Delaware’s Alfred Lerner College of Business and Economics.