Catalogs and the Mail Order Industry
The catalog and mail order industry generates about $125 billion in annual revenue. There are about 7,600 companies in the industry, with over 200,000 employees. About 12 billion catalogs are mailed. 90 million Americans make a purchase from a catalog each year.
Source: IBSWorld and American Catalog Mailers Association
The Early Growth of American Catalogs
Other countries have large and flourishing mail order businesses, but America was unique in how early the industry developed and how large it became. The Founding Fathers were no strangers to catalogs. George Washington and Thomas Jefferson both used catalogues to order wine, furniture, seeds, and other goods from Europe. Before he served as postmaster general, Benjamin Franklin published a book catalogue with nearly 600 titles and offered the first recorded guarantee of "customer satisfaction."
Despite the creation of use of catalogs in early America, the nation’s catalog industry did not get out to a rousing start until the 1870s. A Chicago dry goods merchant, Aaron Montgomery Ward launched the first successful catalog company in 1872. He was followed shortly thereafter by Sears and Roebuck Company and the Burpee Seed catalogs. Although the catalogs were popular with consumers and grew steadily, they faced an obstacle: by law, the Post Office Department was prohibited from delivering any package weighing more than four pounds. Packages over that weight had to be delivered by private delivery/express companies.
In 1896 the Post Office Department began experimenting with Rural Free Delivery (RFD) [Deeper Learning: Rural Free Delivery] – the idea of delivering mail directly to rural Americans instead of forcing them to ride into town to get their mail (a trip that could take half a day or more). In 1902 RFD became a permanent service. Once rural consumers began to enjoy the luxury of mail delivered to their homes, they wanted the opportunity to buy goods by mail. A campaign began to ease the weight limits on packages that the Post Office Department could deliver. Opposition to this proposal was fierce among private delivery companies, small town merchants, and railway companies. A handful of powerful Members of Congress with financial ties to companies opposed the proposal and the matter was mired in Congress for years. Ultimately the proposals’ supporters were victorious and in 1913 Parcel Post Service [Deeper Learning: Parcel Post Service] began. The maximum package weight the Post Office would deliver was 11 pounds and grew to 70 pounds by 1931.
The combination of RFD and Parcel Post brought a massive, and relatively untouched customer base together with the fledgling mail order industry. Within the first six months of Parcel Post, Sears handled five times as many orders as it did the year before, and within five years doubled its revenue.
Companies, large and small, sought to expand their reach through catalogs. These catalogs sold everything from chicks and bees to household implements, clothing, and just about anything that could be imagined. [Deeper Learning: Growing a Business by Mail] Many small companies continue to crop up today, as computer-based printing and publishing enables these entrepreneurs to develop catalogs that will allow them to succeed. Catalogs served not only as sales material, but also as entertainment and a method for people to keep up with what items were popular elsewhere in the country. After they outlived their usefulness, paper was reused for many other purposes, and today the industry still strongly supports recycling.
The Industry Benefits from the Technology that Helped Printers and Magazine Publishers
The modern catalog may be glossy and include editorial content about the items pictured for sale in its pages. Layouts are artistic and designed to catch and keep your attention by displaying the goods as attractively as possible and including a brief but powerful description of the items. Since many catalogs are targeted to a particular market, the content may be carefully selected for its relevance and appeal. Catalogs can be seasonal to keep the items new and fresh to the customers, many of whom are loyalists who have purchased before and are comfortable dealing with the company. The industry has specialized in customer service, with toll-free numbers and online help desks to make purchases easy and to handle problems that arise.
Catalogs Have Entered the Digital Age
Print editions continue to drive sales. Publishers can embed digital features on catalog pages enticing customers to activate applications with their mobile devices and see three dimensional depictions of items. Customers can even click on a symbol to be taken directly to an online site.
In 2000, Land’s End reduced the number of catalogs it sent consumers. It experienced a $100 million drop in sales as a result, according to research by Kurt Salmon. Lands’ End later added a pop-up survey to its website and found that 75 percent of customers who were making purchases had first viewed the catalog. By far, the most used and preferred method for purchases from a company was to look at the catalog and then purchase through a website.
The catalog industry is still one of the strongest and most innovative segments of the American economy. Where early pioneers such as Montgomery Wards have disappeared, new innovators have taken their place and are continuing to change the way Americans shop and how goods are provided.