IMAGINE THIS: You print 16 million catalogs a year that are seen by 500 million upscale prospects (average pass-along ratio is 20-to-1), often cooped up for hours with nothing else to read. Annually, 700,000 orders are placed, typically for 2.1 items at a $110 average order size. Oh, yes, a few more eat-your-heart-out ingredients of your catalog business: You warehouse no inventory, you ship nothing, take no returns, and you don't spend a penny on postage or list rental. Two words describe this model: yum-yum.
This was the lead for my November 2000 cover story in Catalog Success magazine ("The Ultimate Catalog Business Model") on Bob Worsley and his SkyMall catalog—the catalog you find in the seat pockets of virtually every airliner you fly. In the article, I urged all direct marketers to study the SkyMall book closely, for it contains actual pages from dozens of major and minor catalogs, allowing them to see these firm's best-selling items, pricing, copy and design techniques. From my story:
SkyMall, however, is sensitive to exclusivity. It would be suicidal to allow two catalogers to offer the same product, and worse, if the same product were offered twice in the same book at different prices. In general, if a merchant has been continuously running an item, no one else can duplicate the offering until it's dropped.
It would appear the egg finally hit the fan. In the Early Spring 2005 SkyMall book on a United flight from Philadelphia to Chicago I found the illustration at upper left on page 105 and the one at bottom left on page 120. It appears the manufacturer is offering the same watch at $30 and $50 less than the Marquise people, and throwing in a free $70 stainless steel watchband.
I called SkyMall Vice President of Catalog Marketing Martin Smith and said what I thought happened was that Steinhauesen Direct, the manufacturer of the watch, was selling direct and undercutting a member of its dealer network, and that this was a big oops. Smith said keeping track of 2,500 SKUs and 400 vendors is daunting and sometimes a slip-up occurs, but not in this case. Smith maintained that slight differences exist in the two models, although they are not apparent. Hence the two prices. And both ads have done fantastically well for a long time.