Product catalogs have been a key driver of company activities for more than a century. Therefore, they are not a recent fad. Prior to the advent of the internet, mail-order catalogs were a means of promoting consumption by simulating the in-store experience.
Incorporating product catalogs into the company's strategies was quite successful for many businesses in the 20th century. Even in our technologically advanced era where internet buying dominates, product catalogs – whether it's a real mailer or a digital leaflet – still have a place in retail tactics.
According to the research conducted in the United States in March 2021, direct mail and catalogs came out on top of the ranking named the most comfortable way of receiving advertising. As 25% of consumers opted for this advertising format, it indicates the ongoing relevance of this traditional type of advertisement.
What is product catalog and how it is used
A product catalog contains up-to-date information (images and product features) about the retailer's assortment, as well as details on where customers may make purchases. The main function of the product catalog is to represent new products, special offerings, prices and discounts in a simple manner — all information in one place. Product catalogs may be readily delivered to current clients or brand-new audiences, making them a useful sales tool.
The key function of product catalogs nowadays is to maintain a flexible and dynamic price structure of the retailer's merchandise mix. Depending on business requirements, it is critical for retailers to control price lists for a single location as well as offer relevant prices for other stores in the retail chain, giving pricing managers a bit more leeway in setting or just enforcing final prices.
In other words, a well-organized retail network frequently holds stores located across the city, region, or even the world. This network may not always be consistent. For example, franchises and network shops may have different approaches to product management. Plus, the same items may be supplied by several vendors, some products may be restricted to specific geographic areas, and pricing may vary depending on a variety of factors.
What is more important, retailers need to consider access to information, which modern consumers have today. They are smart enough when it comes to doing product searches online and anticipate having easy access to information about a product when making selections of desired items.
Product catalogs enable customers to make judgments about what to buy by letting them know all of the options available from a certain company, as well as letting them compare these offerings with competitors. Given that, retailers need a well-managed, regularly updated product catalog being able to reflect new product offers, prices, and promotions.
Plus, product catalogs not only help consumers make reasonable purchases, but also they are useful for internal teams. With product catalogs, the marketing team can specify new services, involve audiences, and promote new items. Product catalogs can also be used by field marketers to present demos or highlight products at events.
Smart approach to product management
Informing about promo campaigns and stock clearance have always been one of the major functions of product catalogs. Actually, this function hasn’t changed nowadays, but even more transformed into the enhanced approach to a sustainable product management. The ideal product catalog provides more choices for managing pricing flexibility:
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Retailers can make seasonal or plan promos according to holidays and seasons.
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It's possible to offer customized promotional baskets and offer goods in bundles, thus clearing off the stock.
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Modern product catalogs may be enhanced with personalized approaches by offering discounts for the products a consumer buys more often.
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Last but not least, companies can run effective promo campaigns aligned with business goals.
However, these tasks may be a real challenge without advanced technologies. Before offering buyers a list of discounts retailers need to do some preparations and understand that prices they offer in a product catalog don’t go against their business goals.
Tech savvy approach to stock clearance
Given that stock clearance is an integral part of the retail cycle, retailers are often challenged to carry it out in a smart way. Therefore, it's crucial to thoroughly prepare stock clearance and markdown campaigns before informing customers about discounts and special offers via product catalogues. Without smart solutions, these procedures may negatively impact margin and profit. When using machine learning technologies, it's possible to get more accurate, effective, regular elasticity-based markdown suggestions.
Algorithms are able to take into account such constraints as stock and the level of gross profit. Plus they allow for calculating discounts that do not disrupt the sales of other products offered with a smaller discount or no discount at all. As a result, retailers can provide consumers with appealing offerings and clear space for new products without compromising their own business goals.
Algorithm-powered promo management
'Blanket' discounts, lack of data in decision-making, and inconsistent sellouts undermine the effectiveness of the promo strategy and bring outputs other than expected. When resorting to advanced technologies, this allows retailers to prevent multiple pitfalls in planning and running promo campaigns. All the company needs is to hold quality data sets about sales, previous promo campaigns, etc. By processing historical promo records, the algorithms enable data-driven evaluations of past promo campaigns and provide insights contributing to future promos' sustainability.
With Competera's promo management solution, the arrangement of promo campaigns gets to a new level because it's easy to schedule and set up parameters, as well as run different scenarios to adjust variables and opt for the best one in line with marketing needs. Plus, the system allows for calculating promo ROI both on SKU and category level, eliminating cannibalization and other possible risks.
Takeaways
Overall, the use of product catalog is a proven method of interaction with consumers. Technologies make it even more effective by providing significant inputs on how to improve promo and markdown campaigns. Properly pricing your assortment and offering buyers what they exactly need are the key to success conveyed via product catalogs.
