SIC 5961 Catalog and Mail-Order Houses – Description, Market Prospects, Industry History

The catalog and mail order house industry, or non-store retail industry, is comprised of establishments primarily engaged in the retail sale of products via television, catalog, and direct mail. Such organizations include businesses that sell book club memberships, magazines, and retail consumer and business products. These establishments deliver products and services through the mail. this classification does not include direct mail advertising companies or stores operated by catalog companies for the purpose of conducting retail sales on the site.

naics code(s)

454110 (electronic shopping houses and mail order)

industry snapshot

according to the us According to the Census Bureau’s Statistical Summary of the United States, in the year 2000 there were 11,800 e-shopping and mail-order houses in operation. The industry generated approximately $68.1 billion in revenue, a significant increase from just $19.3 billion in 1990. The industry experienced tremendous growth during the 1980s when mail-order activity jumped more than 300 percent. from 1990 to 1996, mail-order sales grew at a rate of more than 9.9 percent per year, about 1.7 times the average growth of sales at general merchandise, apparel, and furniture stores.

The catalog industry saw renewed opportunity with the growth of Internet shopping in the late 1990s. While some Internet sales start-ups seemed to pose a threat to established off-store retailers, the The industry reacted quickly by adopting the new technology. As of 1999, approximately 90 percent of catalog sellers who were members of the Direct Marketing Association were online in some way, and 60 percent of them sold through the Internet. Internet sales by catalog retailers represented a high-growth area in the late 1990s, with some major companies reporting online sales growth doubling and tripling annually. Sales slowed in the fourth quarter of 2001 after the 9/11 terrorist attacks, when the entire US territory fell. uu. economy sank into recession. Although business recovered during 2002, the war with Iraq in 2003 slowed down the economy.

Catalog and direct mail sellers also saw the lines blur in the industry in the early 21st century, as retailers launched catalogs, catalog sellers opened stores, and many merchants explored the option of selling through Internet. . the industry also went through a period of consolidation through a series of mergers and acquisitions. And a new line of business was opened when some direct marketers found they could sell management expertise to newer companies, especially internet marketers who lacked the skills to distribute products smoothly.

organization and structure

The catalog and mail order home industry encompasses companies that sell products through all “out of store” retail channels, including radio, television, and computers. although larger retailers such as j.c. penny, usually maintain a warehouse of inventory, most industry participants maintain little or no inventory on hand. When a customer orders a product, the retailer contacts a wholesale company that ships the product to the retailer or directly to the customer.

Because they eschew traditional retail purchasing, manufacturing, and inventory management activities, many non-store retailers are essentially marketing firms. Some catalog companies, for example, simply put together a bunch of complementary products made by other companies and try to market those items in a catalog to customers they think would be most interested in them. Similarly, many direct mail and broadcast media retailers essentially act as middlemen, selling products that are manufactured and stocked by wholesalers.

The three main non-store retail categories include commercial, consumer and charitable sales. Throughout the 1990s, consumer sales accounted for about 50 percent of industry revenue, while business and charity sales each garnered about 25 percent of the market. About 60 percent of out-of-store consumer sales were products, while the remaining 40 percent were services. of out-of-store sales of consumer products, more than 80 percent were derived from specialty items not commonly available in stores. the remaining approximately 20 percent came from general merchandise sales. of out-of-store consumer services sales, about 40 percent of revenue came from financial services.

However, a great advantage enjoyed by companies in this industry, whether they secure sales through catalogues, direct mail, the Internet, or home television shopping, is the elimination or severe reduction of two expenses that have a tremendous impact on the fund. line of traditional retailers: rental and sales labor. Another advantage is that even small and medium-sized businesses can use mail order to grow business and/or give current businesses a greater presence in the market without increasing overhead costs.

The main disadvantage of mail-order and broadcast retailing is high advertising costs. The cost of producing and delivering catalogues, fulfilling orders and servicing customers often leaves retailers with reduced profit margins or losses if response to a promotion is poor. The cost of mailing a simple letter and brochure typically ranges from 40 to 65 cents apiece, and the retailer often expects only 5 to 3 percent of recipients to purchase a product. In fact, a 2 percent response rate is considered highly successful in the mail-order business. Although the response to a catalog is usually higher, typically between 3 and 6 percent, production costs often exceed $3 per catalog. average catalog response rates peaked at 8 percent in 1996, and the drop to 5 percent in 1998 was seen as a possible harbinger of a slowdown in the industry.

consumers outside the store. Consumers in the non-store retail industry differ from store customers in a number of ways, which affects the method companies use to reach their target market. Catalog shoppers, for example, are better educated, more likely to work in professional and managerial capacities, earn more money, are more conservative and traditional, and more comfortable with modern technology and financial instruments. Catalog shoppers are also more likely to be women: 58% to 42%, compared to an even percentage of shoppers in stores. a higher percentage of non-store customers are also divorced and middle-aged. for example, 25 percent of catalog shoppers are between the ages of 35 and 44, compared to just 17 percent of store customers.

Many demographic differences bode well for out-of-store merchants. dual-income households, for example, are more likely to shop through catalogs. as a result, more than 50 percent of households who regularly shopped by mail earned between $30,000 and $99,000, versus 38 percent in that range who never shopped by mail. Catalog shoppers are also more likely to hear ads in the media and are typically exposed to more financial news and media. catalog users also spend more money on grocery items ($65 per week vs. $55 per week for non-catalog users) and are more likely to develop brand loyalty.

background and development

The history of mail order is said to date back to the 1490s, just after Gutenberg’s invention of movable type. The earliest known catalog dates from 1498 when Aldus Manutius of Venice put up for sale 15 books by Greek and Latin authors. Mail order operations have existed in the United States since colonial times. In fact, Benjamin Franklin is believed to have started the industry with the first direct mail offer ever presented to the public. however, it was not until the latter part of the nineteenth century that mail order assumed a major role in the economy. the main impetus for merchants to offer products by mail order was the inaccessibility of the mass market of rural consumers. the companies knew they could benefit from getting product information to farmers, who represented the majority of the population.

Although some companies successfully promoted products to rural people through catalogs and mailings, Richard Sears achieved the most notable success. In 1886 Sears began selling watches by mail order. eventually, the sears roe deer, & co. the catalog became a staple of American life, giving millions of Americans access to general merchandise not available locally.

In the late 19th and early 20th centuries, several developments contributed to the rise of a retail industry without stores. More importantly, the construction of a continental rail network provided a vital distribution channel for East Coast mail-order houses. in addition, the us The postal service began offering special rate structures for mail-order businesses that encouraged the spread of advertising brochures and catalogues. Furthermore, in 1913 the postal service developed the postal parcel system. these factors provided a relatively inexpensive alternative to products sold by controversial middlemen, who often made huge profit margins from the sale and delivery of goods to rural customers.

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Three of the largest mail order houses that rose to prominence in the early 20th century were: Sears; Montgomery Ward and Company, founded in 1872; and spiegel, inc. these companies, like others of that time, generated huge profits by offering general merchandise at low prices. they often made their own products and benefited from large-scale advertising and bulk sales.

Although mail order houses continued to experience sales growth in the mid-20th century, particularly during the postwar economic boom of the 1950s and 1960s, the role of catalog sales and mail order mail in the usa uu. the economy was changing. As the population shifted from primarily agricultural to predominantly urban and suburban, the importance of delivering general merchandise to remote consumers diminished. instead, mail-order companies began to emphasize the convenience of shopping and access to special products.

Despite the growth of the industry, out-of-store purchases still accounted for less than 1 percent of all retail sales in 1960. Even in 1967, USA. uu. mail-order sales alone had reached $2.4 billion. during the 1970s, moreover, mail-order houses achieved only modest increases in combined sales.

the 1980s. A variety of developments in the 1980s combined to result in explosive growth in the mail order and catalog home industry. technological advances, demographic changes and more efficient financial markets were the predominant forces behind this phenomenal growth.

The technological advances that catapulted many competitors to success in the 1980s included computers and software, which increased marketing efficiency and improved customer service. Computer systems that became popular in the early 1980s allowed companies to manage and manipulate vast amounts of consumer data. As a result, companies were able to select from a customer list only the best prospects for a particular product or catalogue, thus reducing unnecessary marketing expenses. Additionally, by storing customer information in databases, companies were able to efficiently market new products to existing customers.

Computers were also used to track and manage inventory. when a customer ordered a product, the mail-order house could electronically alert its warehouse or supplier and ship the product quickly. Similar information management systems allowed merchants to integrate money-saving, just-in-time inventory control, and customer service systems. In addition, low-cost desktop computing systems allowed small off-the-shelf specialty retailers to more easily compete with larger companies on a national scale.

In addition to information technology, the non-store retail industry benefited in the 1980s from fundamental demographic changes that affected American purchasing patterns. One of the most important changes was an increase in the percentage of working women and dual-income households. between 1980 and 1990, the percentage of women involved in the labor force increased from 42 to 46 percent, or from 107 million to about 125 million. Because dual-income households made more purchases through the mail, this change increased out-of-store merchandising revenue. an increase in the number of older Americans, who were also more likely to shop by mail, also fueled the industry’s growth.

Another factor driving the growth of mail order in the 1980s was the development and public acceptance of new methods of payment and financing for mail-order products. Credit cards allowed both retailers and consumers a secure and efficient means of paying for mail-order items. In the mid-1980s, Americans had more than 600 million credit cards. the proliferation of toll-free “1-800” numbers (and after 1996, “1-888”) also led to a large increase in sales. many catalog companies reported sales increases of more than 60 percent as a direct result of using toll-free order numbers.

The effect of these and other advances was a 300 percent increase in out-of-store retail sales between 1980 and 1990. mail ballooned to $211 billion in 1990, representing an average annual growth rate of more than 11 percent. by the end of the decade, catalog and mail-order shipments were responsible for about 10 percent of all merchandise sales, more than 3 percent of retail sales, and 1 percent of consumer service sales . In addition, trade in the industry accounted for nearly 2 percent of the US. gross domestic product.

however, us Mail order sales growth slowed in the early 1990s as a sluggish economy suppressed revenue across all retail sectors. In 1992, industry participants faced increased price competition that squeezed profit margins. Furthermore, many analysts believed that the catalog and mail-order industry was maturing and had passed its stage of high profits and dynamic growth. Several trends supported this theory: the industry was becoming more consolidated; sales growth was leveling off; advertising costs were rising; and failure rates increased. One of the main causes of higher advertising costs was media saturation. Because consumers were being bombarded by ever-increasing amounts of direct mail advertising, response rates to promotions, on average, were declining. The average consumer received more than 21 pieces of mail per week in 1995. However, households that regularly purchased items through the mail often received much more.

In addition to declining sales growth and narrower profit margins, catalog and mail-order houses were battling state and federal regulatory efforts that sought to remove a major industry advantage: the absence of sales tax on products sold to customers outside the state. Consumer businesses narrowly avoided disaster in 1992 when the Supreme Court ruled that states could not compel mail-order retailers to collect or remit state sales tax unless they were physically present within the state. an opposite decision would have cost the industry at least $3 billion, in addition to lost sales. however, many states continued to search for methods to tax out-of-state sales.

In response to the relatively inclement business environment of the early 1990s, catalog and mail-order houses scrambled to increase sales and profit margins. companies emphasized customer satisfaction by collecting data on preferences and wants, and then carefully tailoring products and promotions accordingly. companies also eliminated large general audience catalogs and relied instead on specialized niche promotions. in 1992, for example, fingerhut companies inc. joined forces with Montgomery Ward and Co. develop a set of 10 specialty catalogues.

part of the customer satisfaction strategy included the integration of advanced database management techniques. By collecting and storing consumer information in a computer database, retailers were able to determine what, when, and how to market to each of their customers. For many companies, database marketing has become an exact science that has allowed them to maximize the efficiency of each advertising dollar. in fact, many companies offered products to potential new customers at a loss so they could collect information about the consumer and generate profit from follow-up sales.

In the mid-1990s, Dell Computer Corporation’s business-to-business division spent more than $1 million to clean up its database through a comprehensive telemarketing campaign to add more than 150 fields of information to its database. database; at the same time, the company removed more than 50 percent of its existing list. As a result of this $1 million expense, Dell doubled the response rate of its remaining customers and, by reducing printing and postage costs, achieved annual savings of approximately $4 million.

Companies also strengthened inventory control systems in the early 1990s. Just-in-time management techniques, whereby stockists kept a minimum stock on hand and depended on prompt delivery from suppliers , became standard for the most successful large mail order houses. value-based pricing also became an important strategy for many companies. By improving merchandise quality, increasing service, and lowering prices, many successful competitors were able to overcome thin margins by increasing market share and sales volume, and taking advantage of follow-up sales opportunities.

In addition to internal efforts, a series of mergers and acquisitions characterized the industry in the early 1990s, as companies sought the benefits of economies of scale and greater access to investment capital. Aaron’s Furniture Warehouse, Donnelly Marketing, Burpee, Ticketron, and Conde Nast were just a few of the companies that were taken over by other mail-order companies. One of the largest mergers involved the sale of Murdoch magazines to K-III Holdings for $650 million.

the rise of electronic retailing. Although the home shopping network was founded in the late 1970s, this retail medium was stagnant for several years. Dismissed “as a low-end medium whose average viewer was a far cry from the urban and suburban sophisticates that marketers crave,” as business week observed, major retailers paid little attention to e-retailing . However, the arrival of former Fox Network executive Barry Diller as co-owner of QVC gave the concept greater credibility.

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At the same time, retailers increasingly recognized that, given the agonizing performance of many of the stores, e-retailing had its charms. As a UBS securities analyst observed in Business Week, home e-shopping is “a low-cost distribution system. You don’t need thousands of stores, and you don’t need thousands of pieces of inventory.” in every place.”

the direct marketing association reported that in 1995, 77 percent of us. uu. the population had watched direct response television in an infomercial, direct response television ad, or home shopping show. more than 22 million adults had watched home shopping shows and approximately 8 million purchased merchandise from a television sale. One of the fastest growing areas of television sales was the infomercial (an in-depth promotion of a product, replicating a television show), which grew from $350 million in 1988 to $1 billion in 1994.

The next great event in the history of shopping outside the stores was the arrival of the Internet. Although some internet commerce had been tried before, online shopping became a recognized presence on the American scene in 1997. The success of some of the early online businesses, such as 1-800 flowers and amazon.com , led to a large number of online sales sites. many of them were small start-ups without the brand identity marketing sophistication of traditional retailers or catalog sellers. But by 1999, most catalog houses had some presence on the Internet, and many traditional retailers also published catalogs online. the main sellers on the internet were books, computer products, recorded music, gifts and financial services.

In the late 1990s, the mail order and catalog industry was growing and changing. The stagnation of the early 1990s ended, and sales grew to levels hovering around 8 percent per year by the end of the decade. Although previous analysts had thought that the mail-order industry was saturated, by the late 1990s it seemed that the traditional retail industry was also saturated, and catalogs were an easy way to expand. the president of the direct marketing association, h. Robert Wientzen, explained in a September 22, 1999 new york times article, “[t]here aren’t many places left to put up tents.” So, for example, Federated Department Stores bought the venerable direct marketer Fingerhut in 1999, and Fingerhut then ran the catalog and online divisions of the Federated stores. Staples, a giant chain of office supply stores, acquired catalog office supply supplier Quill in 1998, and Office Depot, another expanding office supply retail chain, also acquired a catalog office supply supplier, viking however, this trend worked in reverse at the same time, as catalog marketers decided to open stores in the late 1990s. l.l. Bean, which had had only one retail store in its nearly 90-year history, announced in 1999 that it would begin opening a chain of stores. These mergers and changes showed that the mail order and catalog industry was still volatile in the late 1990s. In many cases, this volatility meant lower profits. Many of the top direct sellers had flat or declining sales as they struggled to adjust business strategies. For example, in 1998 sales were flat or down for Lillian Vernon, J.C. penney and land’s end, all industry leaders.

Catalog and mail-order sales generally expanded in the late 1990s, but the most explosive area of ​​growth was internet sales. Some of the major catalog retailers reported a rapid expansion of their online sales, even if overall sales remained flat. online sales for j. crew, a major clothing catalog, quadrupled in 1998, reaching $20 million. total sales of j. crew was $816 million, so internet sales were only a small percentage. but internet sales at the company continued to rise over the next year. Although Land’s End, another catalog clothing company, reported a sharp drop in profits in 1998, its Internet sales grew from just $18 million in 1997 to $61 million a year later. the stalled company planned to move more aggressively into online sales, while abandoning some of its retail stores. but it seemed unlikely that internet sales would replace catalog sales in the industry as a whole. According to a survey of major catalog retailers in the new york times , direct mail advertising and large catalogs were still considered the best way to reach new customers in 1999.

Some of the fastest growing mail order companies in the late 1990s were computer retailers. Dell had sales of $18 billion in 1998, an increase of 33 percent from the previous year. CDW fared almost as well, rising 26 percent in 1998, generating sales of $1.7 billion. gateway was another stellar computer retailer, with $7.5 billion in sales and revenue up 16 percent.

Another new development in the industry in the late 1990s was the introduction of the magazine/catalog hybrid. these “magalogs” or “catazines” were mostly given away as in-store promotions. leading retailers abercrombie & Fitch, Nordstrom and Marcus Neiman were early on the magalog scene. JC Penney created Noise , a free magazine for teens, in 1999. These publications were a clever combination of feature articles and photos that promoted private labels without saying so explicitly. the appeal of this type of catalog seemed to be that it stood out from other mailings. As the number of mail-order catalogs increased in the late 1990s, the hybrid version was expected to be more flashy than the run-of-the-mill direct mail offering.

current conditions

The catalog industry got off to a rocky start in the 21st century after a decade of exceptional growth. According to the Catalog Age “Critical Issues and Trends Benchmark Report” survey, 24 percent of respondents reported missing earnings targets by more than 10 percent for 2001. 1 a 10 percent, which means that more than 50 percent of the industry did not meet their profitability targets. while the downward trends in 2001 can be attributed to the aftermath of the terrorist attacks which had devastating effects in the fourth quarter, the industry did not fully recover in 2002 and sales fell again in the fourth quarter of 2002.

One of the biggest concerns for catalog retailers is the rising cost of catalog distribution and shipping merchandise. Postage and paper costs, as well as United Postal Service and FedEx charges are variables that can and have had a negative effect on the profitability of catalog campaigns. As a result, some companies are employing money-saving measures, such as reducing cold-calling (sending unsolicited catalogs), reducing the page count of catalogs, replacing a catalog with a postcard or email promoting sales specials. and reducing the number of specialized catalogs aimed at specific customer segments. Despite the difficulties caused by a recessionary economy, the catalog and e-commerce sectors are expected to continue to expand as the us. uu. the population continues to increase its use of the internet to buy products.

according to the us Census Bureau In 2000, the latest statistics available, electronic and catalog stores accounted for 19.1 percent of all retail activity in the United States, with sales valued at $21.4 billion. revenue from books and magazines sold through e-commerce totaled $2.1 billion, or 49 percent of all sales. computer software sold over the Internet accounted for 31 percent of all software revenue. online sales of toys and music/video each had just under a third of their category market shares. e-commerce sales of home appliances and consumer electronics also garnered 31 percent of total category revenue. Online computer hardware sales totaled $6.1 billion, 23 percent of all computer sales and 28 percent of all e-commerce revenue.

industry leaders

the largest catalog retailer in the united states in the late 1990s was j.c. Penney, the department store chain. the catalog has always been a big part of its retail mix, but that wasn’t the company’s only source of business. Fingerhut Companies, Inc., of Minnetonka, Minnesota, grew from being the nation’s ninth largest mail order company in 1995 to being the second largest company in 1999. Fingerhut sold more than 15,000 different products, including various items for the home, electronics, and household items, to a customer database of more than 13 million people. In 1999, Federated Department Stores, a conglomerate that owns several department store chains, including Bloomingdales and Macy’s, purchased the company. After the acquisition, Fingerhut found a new niche handling catalog and online sales for some of the federated divisions. In 1999, it signed a contract with the world’s largest retailer, Wal-Mart, to manage its Internet sales. In July 2002, Federated sold Fingerhut to the acquisition of FAC.

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provell inc. (formerly Damark International) was another consistent leader in the mail order and catalog industry in the 1990s, but struggled in the 2000s. The company’s 2001 sales totaled $138 million, resulting at a net loss of $79.3 million. damark ran a massive catalog operation, mailing out some 150 million catalogs a year. offered computers, home office equipment, sporting goods, electronics, and other consumer goods at discount prices. Damark also ran direct mail shopping clubs. by the end of the 1990s it had nine such clubs with approximately 1.7 million members. club members paid approximately $60 a year to join and could then purchase the company’s entertainment, travel, health and fitness, and restaurant services at a discount.

One of the fastest growing mail order companies in the late 1990s was Dell Computer Corporation. was one of the largest catalog operations by revenue in the late 1990s and early 2000s, leading the world in direct mail sales of personal computers, software, and peripheral equipment. Being a computer corporation, it was natural for Dell to venture heavily into Internet sales. Dell reported net income of $2.1 billion on revenue of $35.4 billion in 2002.

The phenomenon of the late 1990s in the world of out-of-store retail was amazon.com. it was arguably the company that made online shopping a convenient option for American consumers. by the end of 1998, more than 6 million customers had purchased books, music, or videos from its online store. branched out from its position as a virtual bookstore to become a virtual mall. Amazon.com did this by acquiring online auction house eBay and holdings in a number of other online vendors, including drugstore.com, homegrocer.com and pets.com. The Wall Street Journal named Amazon.com its best performer in a year in 1999. Despite its overall success, Amazon posted a $149.1 million net loss on $3.9K. million in revenue for 2002.

labor

Employment in the catalog and mail-order housing industry was expected to grow faster than employment in most other United States. retail sectors in the early 2000s. However, advances in automation and information systems could slow job growth as companies eliminate labor-intensive positions. Despite expected growth, the mail order and catalog industry offered relatively few employment opportunities relative to businesses with similar sales volumes. The greatest job growth was expected to be among computer programmers and information systems professionals, who were needed to integrate and optimize financial, inventory, and customer information. most IT positions required little prior training, providing opportunities for many entry-level information specialists.

Jobs in sales, photography, layout and design are likely to increase 50 to 65 percent. Blue-collar and labor positions were also forecast to expand, by about 50 percent. Jobs in administration, finance, and information systems were also expected to reach growth rates of 50 to 60 percent by 2005.

according to the us Department of Labor, Bureau of Labor Statistics, In 2001 the non-store retail industry category employed nearly 380,000 workers. Of this total, 41 percent of the jobs were related to clerical and administrative support tasks. customer service representatives totaled 42,670, or 11 percent of all jobs, and had a median annual salary of $21,490. Other top jobs in the category included order clerks, shipping and receiving clerks, inventory clerks, and order filers. sales positions accounted for 19 percent of industry jobs, with 70,710 jobs. the median annual wage for sales-related jobs was $25,520.

america and the world

united states the catalog and mail order industry is the largest and most advanced in the world. There are two basic reasons for the continued growth of this industry: a large population and a relatively high income level. although other countries may be more densely populated, they lack a sufficient number of people who have income to buy.

mail order retailers in the united states benefit from several other advantages. most importantly, usa retailers enjoy access to the world’s largest industrialized and relatively homogeneous market. As a result, there are multiple economies of scale for domestic traders. a whole usa For example, the mailing list industry has emerged, allowing retailers to efficiently target specific market niches.

another very important advantage for the us. uu. mail order industry is relatively low postal rates. U.S. Bulk and first-class postage rates are the lowest in the world—much lower, in fact, than rates in most of Asia, Europe, and South America. Postage rates in much of Europe, for example, are double those in the US. fees, making it difficult for companies to successfully promote products through the mail. higher shipping costs further dilute profit potential in foreign markets.

In addition to these factors, most foreign mail order markets are characterized by relatively limited media availability; much stricter government regulation of advertising content and product approval requirements; lack of public understanding and acceptance of mail order; language and cultural barriers; low credit card penetration; and the lack of toll-free numbers. Furthermore, in some European countries, many types of direct mail promotion are prohibited for environmental and social reasons. The European Community mail order industry also suffers from a lack of uniform postal and commercial standards. Some of these mitigating factors were disappearing in the late 1990s, and the growth of the Internet also served to break down geographical barriers.

cross-border sales. Traditionally, overseas sales through national catalogs and mail order houses have been limited by language and cost barriers. Despite the inefficiency of out-of-store retailing in many foreign markets, however, several us. and foreign companies have successfully penetrated other markets. Cross-border sales between the United States and the European Community (EC), in particular, rose steadily during the 1990s, driven in part by increasingly uniform EC markets.

The most exportable mail-order products in the 1990s, in order of revenue volume, were information, education, and collectible products. in addition, several u.s. the companies successfully marketed specialty American products in some Asian countries. some of the most successful offshore u.s. Mail order companies included Hanna Anderson, Austad’s, Eddie Bauer, L.L. bean, black box, inmac, myron manufacturing, and built-in recreational equipment (rei).

research and technology

The most successful catalog and mail order houses increasingly moved computer systems toward a client/server architecture with relational databases and distributed processing. Information databases would eventually allow companies to produce highly specific catalogs and marketing materials tailored to smaller groups, or even individuals. A business might print a set of catalogs, for example, each containing a different product mix and marketing message. Just-in-time inventory practices would take a leading role in helping companies maintain profit margins through lower fixed costs and better customer service.

the new advertising media increasingly complement the traditional print and telephone broadcast channels. the burgeoning multimedia environment will eventually integrate video, telecommunications, optical disc technology, and personal computers. advertisers will be forced to adjust marketing techniques as consumers gain more control in choosing which ads and media to internalize. Advances in recycled paper, printing technology and ink are likely to help the industry move towards waste reduction and lower production costs. At the same time, the proliferation of specialized cable TV channels reaching more homogeneous market niches is expected to increase the efficiency of broadcast advertising.

The importance of new internet technology was amply demonstrated by the mail order and catalog order industry when it embraced online sales in the late 1990s. Some innovations included Catalog City, a website that consumers could visit to request any of the 17,000 catalogues. Part-owned by Bear Creek Corporation, parent of mail-order fruit and gift firm Harry and David Orchards, Catalog City enabled small vendors without much Internet experience to have a Web presence. Internet shopping also offered new opportunities for interaction between the consumer and the catalogue. For example, Land’s End offered a “virtual fitting room” where women could build a three-dimensional model of themselves on screen to find clothes that flattered their complexion.

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