The Catalog Conundrum: Seasonal Versus Yearly Mailers

I remember as a child pondering the question of at what point does one become a “grown up”. Now that I am approaching my mid-twenties I can take a stab at answering. It happened to me when I realized that whenever I entered any major department store I was drawn to the kitchen section. I no longer went directly to the electronics, music, or video sections. Instead I found myself marveling at the fact that they make devices like a high-powered cherry pitter that is designed with German precision and capable of processing up to 25 pounds of cherries in one hour or a spatula docking station capable of holding up to five detachable spatula heads for all occasions, what possibilities! …and just like that my youth was gone.

In the words of Fight Club: “like everyone else, I had become a slave to the IKEA nesting instinct.” So imagine my excitement when the IKEA catalog arrived in the mailbox of my newly rented (albeit slightly under-decorated) apartment a few weeks back. I spent the greater part of the evening marveling at the superfluous things I could add to my apartment. While this is my first IKEA catalog, I am no novice to the seasonal mailers of Crate & Barrel, Pottery Barn, or Pier 1 Imports, but the IKEA catalog has some extra heft in comparison to the others. After doing a bit of digging I discovered IKEA only issues one catalog a year every summer around July/August. It is the main marketing tool of the company and takes up around 70% of the overall marketing budget! I wondered how catalog distribution affects web traffic patterns to these companies and whether it is smarter to issue a larger annual catalog or smaller seasonal mailers.

To find answers I went to Compete.com (of course). The chart below shows that IKEA is dominant over the other three retailers in overall unique visitors. An obvious upward trend occurs during the holiday season, however oddly enough Pier 1 and Pottery Barn are the only two to actually peak during December. Crate & Barrel peaks in November, while IKEA peaks in January. Perhaps IKEA is a more popular destination to spend the most useful gift of all ($$$), rather than purchasing presents and maybe Crate & Barrel shoppers are the type of people who get their holiday shopping done three months in advance and laugh it up come December 23rd when everyone else is out looking for a Tickle Me Elmo in Toys ‘R Us at 4 AM. The more interesting thing to note about this graph is the summer trends. The summer is a relatively stagnant time for the competitive set with slight ups and downs in the months of June, July, and August. However, IKEA shows significant traffic increases starting in June through August, which puts IKEA far above its competitors in these summer months.

It is one thing to have an increase in traffic, but what are these users actually doing during on these sites. To understand this I looked into the “attention” that each site gets from its users. “Attention” is calculated by considering the total amount of time we spend online and then calculates the percentage of time we spend on a given site. While the percentages may seem small (we do, after all, spend a lot of time online) the seemingly small discrepancies actually indicate large differences in consumer engagement. This is where IKEA further excels past the other companies. Its users are far more engaged and spend more of their time online at IKEA than on any of the other sites. The IKEA mailer may seem like the War & Peace of catalogs with the amount of information it contains, but that is just a fraction of their inventory. It is no wonder that the users spend more of their time at IKEA poring over the range of items. The annual catalog not only increases unique visitors to the site, but also increases their attention. There are no trends of similar magnitude for the other retailers who use more frequent, seasonal mailers.

IKEA is clearly doing something right in their decision to issue a larger catalog once a year. They seem to have done something every retailer dreams of: making a catalog that a consumer not only wants, but enjoys leafing through. It not only sets them apart from competitors, but also generates considerable web traffic increases during a relatively stagnant time period for similar retailers. IKEA has realized that the holiday season creates enough buzz around their well-known name and that putting out another catalog would likely get lost in the mix. However, IKEA should not merely be content to rest on their laurels. A year over year comparison of unique visitors in the month August shows a 1.18% drop in IKEA traffic, while Pottery Barn and Pier 1 have 18.22% and 21.79% increases in their traffic (Crate & Barrel lags farthest behind with a 2.16% drop). Clearly other companies are trying to gain on IKEA’s summer dominance, but for now it seems that IKEA has a healthy lead thanks to the strategic marketing choice of its catalog distribution.