Case 2: Do Gucci Catalogs Stack Up in Direct Marketing?
Catalogs, one type of direct mail merchandising, have been
increasing in popularity as consumers look toward convenience in their shopping. Catalog business has even been expanding on the international horizon, Harris Catalog Library has offered 1,250 domestic and international catalogs for patrons to order from. Catalog libraries can be found close to home in U.S. libraries, and as far away as Japanese department stores. The Japanese have been especially fond of shopping by catalog, since by ordering American products directly from catalogs, savings up to 30 or 40 percent can be had over local retailers. Total U.S. catalog sales were $78.6 billion in 1997 and were expected to top $95 billion in 2002. Approximately 12 billion catalogs are produced each year in the U.S. If all catalog and mailorder sales are combined, they accounted for about 4% of all U.S. retail sales in 1998.
Closer to home, American catalog marketers have been striving to increase sales and promote catalog growth on the domestic horizon. The big dilemma facing these marketers is how to accomplish this goal — a difficult task, since look-alike catalogs and merchandising is standard in the industry. The problem is only compounded by the fact that attempts to break out of this trend are unusual for catalog marketers — especially due to the fact that the industry occupies one of the most conservative locations on the American marketing landscape.
A few catalog marketers have made attempts to break away
from the traditional modes of catalog marketing. Gucci is one such company which employs innovative marketing techniques. Gucci's unorthodox style emerged in 1985 when the Gucci autumn/winter catalog took a new distribution route in the U.S. — for the first time Gucci catalogs were made available in bookstores.
Gucci had fallen on bad times in the early 1980s, but had
revitalized itself by the nineties primarily by the leadership of Maurizio Gucci, the owner and original designer for the company. Despite the killing of Maurizio Gucci by his wife in March of 1995, Gucci has continued to expand its presence both globally, and in the United States. They have added twenty-five new stores over the past three years to bring their worldwide total to 158 in 1997. They also tripled their revenues from 1993 to 1997. A great deal of their strategy involved creating a unified image for Gucci worldwide and discontinuing products that did not fit that image. Gucci’s CEO, Domenico De Sole, has personally traveled the globe to visit Gucci’s stores and has closed several that do not present Gucci’s products effectively. Part of revitalizing Gucci’s image has been with a catalog of very high standard. According to a company spokesperson, “the amount that Gucci spends on catalogs is unheard of in the industry.” Described as a product in itself, the Gucci catalog was predicted to generate interest that went beyond the typical catalog. It was said to even have an editorial appeal. Released in early September, the Gucci catalog came with a cover price of $5. Five thousand copies of the catalog were given to Crown Publishers for distribution, and Gucci began courting other booksellers such as Rizzoli, Endicott,
Waldenbooks, and B. Dalton. Containing 96 color pages, the book was produced in-house at a very high budget.
Apart from bookstores, the Gucci catalog was also available in Gucci stores and was mailed out free of charge to 50,000 of Gucci's best customers. The merchandise shown in the catalog was available in the stores, by mail, or by telephone. Furthermore, this strategy allowed Gucci to determine where the customer got his/her catalog. The order forms in each catalog were coded to indicate whether the catalog was distributed through bookstores, the Gucci stores, or through the mail.
While this campaign was not as successful as Gucci would have liked, the company has not given up on the idea of developing a...
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