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Online Catalogs

 

Consumer, Trade, and Special-Purpose Markets

More online catalogs are succeeding every month. Although the tiny among them account for only a few thousand dollars a year in sales, some of the big online catalogs generate hundreds of millions to more than a billion dollars in annual sales.

An online catalog sells a number of items through any variety of computer networks. Some sell consumer items directly, whereas others promote items sold in stores. Many sell industrial, office, or professional items to the appropriate field. The rising costs of postage, paper, and printing make online catalogs increasingly competitive with the standard print alternative. Advantages of online catalogs are the following:

An effective online catalog performs services people want and can't otherwise easily get. An online catalog overcomes the frustrations and hassle of store shopping while arranging information simply and quickly for easy use, clarity, and fast reference. The catalog is also fun to use, not a chore.

An online catalog can often expand to whatever amount of information is needed for a buying decision on any item. It can be downloaded on a floppy disk and given to a friend with no modem.

Some disadvantages of online catalogs are the following:

An online catalog doesn't seem user-friendly to many older people or women. It's not convenient to carry and read an online catalog from time to time, as many people peruse print catalogs. In addition, an online catalog can't show most PC owners a large number of high-resolution color pictures like a glossy print catalog or provide the color action of a video catalog.

An online catalog can be accessed from

  1. An I&E computer network

  2. Its own BBS

  3. A private network organized for it

Most consumer online catalogs, particularly smaller ones, run on an I&E network. Each network encourages subscribers to log on to the catalog. The cost is modest to try one out. Some I&E networks can help create the online catalog best suited to you. But others have limited capabilities. And the marketing constraints of each vary (see Chapter 19).

Smaller industrial and business-to-business marketers sometimes start their online catalogs via their own BBSs. I&E networks typically do not attract enough of the specialized customers these marketers require. At a small software cost, more capabilities can be built into BBSs.

Some firms sell mainly to business customers who communicate often, make special requests, and buy in large amounts cumulatively. For these customers, an online catalog may need more advanced equipment and software and a private network with PCs often given away to bigger customers.

 

Considering an Online Catalog

Weigh carefully whether you should launch an online catalog. First read the rest of this chapter and reread Chapter 19. Get from each I&E network a list of all online catalogs it carries. Next, get the latest list of BBSs from a BBS newsletter listed at the end of Chapter 18. Look through the list for catalog BBSs. Don't seriously consider an online catalog until you own and use a PC, modem, and communication software. Join at least CompuServe and Prodigy. Log on to their catalogs and to BBS catalogs.

An online catalog using a private network can cost well under $50,000 up to far more, considering all associated expenses. If this option makes sense, read your trade publications and ask your trade association for the names of online catalogs organized through private networks. Phone the online catalog operators of these private networks; ask for the marketing manager in charge of catalogs; explain your interest in an online catalog. You don't want to compete with them, but you would appreciate some advice. Then ask what has worked and what has failed. Listen and learn. Ask to log on. Do it.

 

I&E Networks for Online Catalogs

Which I&E network is best for you? Each has somewhat different advantages and drawbacks. Most online catalogs launch on CompuServe or Prodigy because the subscriber volume on either is enough to provide for an adequate test. In addition, both of these I&E or videotex networks have ample experience with catalogs and can give valuable advice and help you promote your catalog.

Here are several online catalog reports from the field: Jeanine Sek of Hammacher-Schlemmer (H-S) notes that success took over a year on CompuServe but came faster and bigger for the same catalog on Prodigy. H-S is making money on both CompuServe and Prodigy.

The Heath company catalog finds CompuServe ideal for its purpose and has not used any other I&E network. For Heath, CompuServe attracts high-income customers oriented to its kind of consumer electronic products. Heath makes money on CompuServe while it helps build its image.

Most of the online catalog operators on CompuServe I have interviewed say they make money. To date, Prodigy has been more successful in marketing family items, lower-priced ones, and more general items. CompuServe is better at reaching men of higher income, especially those with high-tech interests.

 

Leveraging Your Online Experience

An increasing number of online catalog operators use several networks. For example, J. C. Penney has online catalogs on Prodigy, CompuServe, GEnie, and U.S. Videotel. Sears uses Prodigy, CompuServe, and GEnie Direct for its online catalog. Micro has a catalog of computer supplies and accessories at discount prices on GEnie, CompuServe, and U.S. Videotel. Godiva Chocolatier has online catalogs on GEnie, CompuServe, Delphi's Merchant Row, and GTE's Main Street.

What's the value of marketing on competing I&E videotext networks? Many feel doing so makes the volume worth the effort. Gerald M. O'Connell is the founder and CEO of Modem Media, a South Norwalk, Connecticut, consultant and advertising agency specializing in online media. Gerald says,

Separately, [online catalog] volume is small. Together, volume becomes worth the creative and production effort. Success depends on leveraging your online catalog to all the major networks, promoting it heavily, keeping it dynamic, and assuming the costs of shopping activity.

Our experience is that if it works for one network, it will work for them all. After the first success, the rest become straight media buys rather than creative and people drains.

Formerly, converting the software for an online catalog to another I&E network took a programmer several months and was an expensive process. Now it's fast but still not cheap. It's subject to negotiation for Modem Media customers, which has developed such conversion software.


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