Five years ago, if you had asked me how many catalogs there were in Canada I would have said, “maybe a dozen”.
In the fall of that year, 1988, a colleague and I, over lunch, came up with a back-of-a-serviette list of about fifty, decent-sized Canadian consumer and business-to-business catalog companies.
Within a couple of months following that lunch, with the help of some fellow direct marketers, we built a list of four hundred catalog companies.
That’s not very many by U.S. standards, but the real question is: are Canadian consumers receptive to shopping by catalog?
Robert Cameron, general manager of Revere-Seton, believes so. “Canadians love to receive catalogs. But, to be successful, you have to take ALL the risk out of buying. There can be no strings attached. The Canadian consumer is much more cynical and skeptical of catalogs and direct mail…They just aren’t used to doing business this way.”
American catalogers, such as Cabela’s, would concur that Canadians are receptive. Cabela’s has been mailing to Canada for 20 years and implemented a concentrated marketing effort about four years ago. “For our merchandise line it is, indeed, fertile ground,” says Sharon Robison, marketing director, “and any cross-border problems are quickly offset by good response rates and strong average order amounts.”
Dave Zentmeyer, vice president, international, for Lands’ End agrees with Sharon, “A lot of the same issues are at work that have caused American catalogs to be successful…convenience, quality of product, pricing…use of leisure time. These factors are just as much at work in Canada plus my sense is that mail boxes are not as full of catalogs as in the US.”
A survey of adult Canadian consumers, conducted on behalf of Canada Post Corporation in 1990, indicated 57% welcomed catalogs from mail order companies and 74% welcomed retail “catalogs”.
But do they buy?
The same year, a Gallup ConsumerScan Omnibus found that 59% of the adult Canadian population had made a catalogue or mail order purchase in the last 12 months, of which 42% had ordered from a retail catalog and 25% ordered from a mail order company’s catalog.
A more recent major consumer study, conducted in early 1992 on cross-border shopping, was focused primarily on retail shopping behaviors. However, one question was asked about direct mail. It revealed that 26% of respondents had used mail order at least once a year and 10% reported 3 uses or more. Use of mail order from the U.S. was reported by 5% overall with 2% reporting 3 or more uses.
The 1993 Catalog Age Report indicated 72% of Canadian catalogs get above 5% response from their house files and 74% average 2% or less on outside lists. Only 61% of their U.S. consumer catalog counterparts get more than 5% from house files with 27% getting 3.1% outside list response. It appears response is good from the 25% of Canadians who do purchase by mail, however persuading new prospects to respond is more of a challenge.
Being a fairly busy person, I entertain fantasies of being able to do all my shopping, particularly at Christmas, by catalog. This past year, I was determined to pull it off. First, since catalogs hadn’t been pouring into my mail box since the end of August, I had to make a concerted effort to find and get current issues (Canadian and US) with the products I wanted. Just to be safe, I placed most of my orders in early November, some by phone, most by fax. The results?
Well, let’s put it this way…I think I could now write an off-Broadway play about mail order customer service. Only thing is, I can’t decide whether it should be a comedy…or a tragedy. All I can say is, if my own adventure is in any way indicative of what other Canadians are experiencing trying to shop by mail, then it’s no wonder only 25% of Canadians are masochistic enough to try it!
In my opinion, catalogers in the Canadian market must provide, not only extremely attractive offers to break down the Canadian mail order “resistance”. but they also must deliver absolutely impeccable customer service! That may not be easy, but anything less is a set-up for failure.
Interestingly, Canada is the most attractive expansion market to 75% of U.S. catalog companies surveyed in the 1993 Catalog Age Report.
Also, according to the Report, catalog marketers in Canada have an optimistic outlook on their revenue growth for the next 12 to 24 months, as 42% of respondents expect to grow at a faster rate in the next two years than the previous two; 77% plan to increase circulation in the coming year; 34% said they expect to grow at the same rate as in the past 24 months.
What’s the bottom line?
I asked Tony Keenan, president of Regal Greetings & Gifts, who recently formed a strategic alliance with two Walt Disney companies to take their catalogs into Canada. Regal, the second largest Canadian mail order cataloger, has been selling greeting cards, gift wrap, gifts and household items by mail for the past 65 years. For Disney, Regal handles mailing the catalogs, warehousing, shipping and customer service from within Canada.
“I’ve never been more excited about the catalog business potential in Canada,” says Tony, “All the reasons are there that will drive people to buy from catalogs. Retail still hasn’t figured out how to tackle customer service. Going to a mall is time consuming, costly and incredibly aggravating. People want good quality goods at a reasonable price and, if they can get that product with a full guarantee, within a few days, then that’s the way they’re going to go. The catalog business in Canada is extremely under-developed and this is the additional opportunity.”
In conclusion, I think Canada is a potentially responsive catalog market and offers considerable opportunity for those willing to make the effort.
What was that I just heard? Was that a catalog dropping through my mail slot? Excuse me, I think I’ll do some shopping now…
Charles de Gruchy remembers the way it was