Vürtdaførk: IKEA, digital brands and the fate of the print catalog

It would be understandable if you missed, amidst so much other news coverage over the past few months, an underreported tale of two catalog trends.

• In one corner we have IKEA, the Swedish furniture retailer whose venerated catalog has become an icon in its own right, announcing the sunset of its catalogs after 70 years.
  
• In the other corner we have a more recent series of reports from news outlets proclaiming a reemergence of the catalog as savior for product and brand discovery in an ever-more-competitive online advertising landscape. Just a few:
  
  • Harvard Business Review, Why catalogs are making a comeback
    
  • The Wall Street Journal, Why catalog brands like Filson and Lands’ End are cool again
    
  • Modern Retail, Why brands are going all in on direct mail
    

Brands are seeing astonishing returns compared to the usual fare of social ads and email promos (from the stories above):

• A luxury retailer ran a controlled test showing nearly 2x repeat sales among existing customers when compared to email promotions alone.
  
• 93% of brands interviewed who actively use direct mail tactics reported an increase in sales year-over-year.
  
• 73% of those brands interviewed planned to increase direct mail marketing spend.

What’s happening here? Should IKEA reconsider its decision to eliminate the catalog?

• The world’s largest furniture retailer saw a 28% decline in FY2020 top line revenue year-over-year, despite a 45% increase in ecommerce sales, appears to have led to a change in tactics.
  
• Meanwhile, digitally native competitor Wayfair saw the same 45% increase in total revenue 
  
• The home furnishings category overall reported a modest 4% increase in seasonally adjusted US retail sales in 2020H2, which could have been much higher if not for the segment’s—er, heavy—reliance on in-store sales
  

Today, digitally native brands are seeing the catalog as a greenfield opportunity. So, we set out to learn what consumers thought of catalogs in the era of shop-at-home norms:

• 3 in 4 consumers say they are more likely to browse or save at least one type of catalog they receive in the mail as opposed to throwing it away immediately. 
  
• This catalog engagement jumps to 78% and 80% among Gen Z and Millennials (respectively) compared to Gen X and Baby Boomers (70% each).
  
  • Some not-shockers:
    
    • Higher income consumers ($50K+) are more likely (81-82%) to browse print catalogs than those earning less than $50K (67%).
      
    • Parents are bigger fans of catalogs than those without kids (84% vs. 69%).
      
• Most notably, consumers are equally likely to browse catalogs for ideas & inspiration (37%) as they are to make a purchase (39%) – and they do so at least once a month.
  

As a follow up, we asked consumers which categories of catalog they’d be more likely to browse than throw away. The top two answers? Apparel (54%) and furniture/home décor (29%). Too early to predict the IKEA catalog’s comeback?