Written by: Evan Goodfellow
In 2010, J.C. Penny was facing difficult times and the then Chief Executive decided to cut their print catalogue seeing it as out of date. What he didn’t realize that this print catalogue was actually fuelling both online and in store sales.
Gut Decisions Can Land you in the Gutter
If your wondering why a company needs an online research community, you need look no further than J.C. Penney. A recent article in The Wall Street Journal looked at J.C. Penney’s recent move back to print catalogues. In 2010, while facing a recession and a massive shift towards online shopping, the J.C. Penney Chief Executive made a bold decision to stop publishing the catalogue. It was this past March that the company resumed printing. What Penney didn’t realize, prior to the decision to stop the publication, was that the catalogue was actually fuelling online sales. Shoppers were looking through the print catalogue and then going to the website to make the purchases.
Catalog mail outs were big business in the 1990’s and early 2000’s. In 2007, the number of catalog mailings in the U.S. peaked at 19.6 billion. From there, they saw a fast decline with the rise of the internet and a shaky market. In 2013, the number grew for the first time since the drop, to an estimated 11.9 billion.
Companies are now realizing that print catalogues and physical materials can be an incredible tool that drives sales. The WSJ quotes Kurt Salmon that “31% of shoppers have a catalogue with them when they make an online purchase.” Companies like Bonobo’s have begun using print to expound upon their company’s narrative. They have found that catalogue subscription also helped tell other facts, the main fact being that their catalogue subscribers were their best overall customers. J.C. Penney has decided that their catalogue would be mailed to select individuals rather than employing a mass mail out. Their purpose is to slowly recapture their core audience, most importantly the home shopper section, which accounts for 40% of their annual sales.
The Catalogue Was Their Secret Weapon
Had J.C. Penney employed an online community they would have been able to save money, time and energy understanding how the catalogue was being used in a time of massive change. The company has lost billions of dollars in the five years without the catalogue. An online research community would have been able to track opinions and attitudes during that time, and management would have been able to see exactly how customers were using the catalogue in combination with the online services. When a company says that they don’t have the budget for a market research online community, the counter is the reduction in losses currently incurring on a daily basis should be taken into account. A MROC community helps reduce the guesswork.