This article was originally published by Jérémie Levy, Guilhem Bodin et Raphaël Fétique.
Although some distributors no longer use the paper catalogue, contravening the "Stop Pub" is now liable to a fine of 1,500 euros. However, printed advertising is still an important means for retailers to get in-store visits.
Last December 7: a thunderous AFP dispatch hit the screens: the Ikea catalogue is over! January 1: new regulations stipulate that any distributor who contravenes the "Stop Pub" label on a letterbox will be fined €1,500. The citizens' climate convention goes even further, recommending a ban on leaflets being dropped in letterboxes from 2021 onwards. In this situation, where today more than ever our eyes are glued to our screens and where environmental issues are part of every conversation, is this finally the end of paper communication for commercial purposes? If for more than a decade the distributors have been heralding the demise of the leaflet, the question has taken on a certain acuteness over the last few weeks
From opportunism to necessity
Ikea's decision in this particular year seems to be a wise one: CSR concerns, production and distribution process stiffness, difficulty in measuring its real efficiency... These issues, coupled with the question of the budget and its optimisation, are all the more important in the current context: the paper catalogue often accounts for as much as 20 to 60% of distributors' marketing investments!
The production and distribution of a paper catalogue entails a number of challenges that can be far beyond today's standards. Consumption patterns are changing and often occur behind a screen, between e-commerce, Web to store and store to Web, boosted by the growth of mobile networks (4G/5G) and fibre. In addition to this, consumers' ecological ambitions are becoming more and more important.
Avoid a simplistic vision
Although most actors are generally reducing their budgets, this does not mean that they are completely doing away with them. Are the consumers who rushed into the Ikea store to get the latest catalogue just feeling nostalgic? In the non-food sector, the contribution of the paper catalogue to checkout is measured in the range of 0.3% to 7%.
At the end of 2020, we have noticed some particular decisions ( notably by the food superstores): many players who until then had announced the drastic slowdown in the distribution of advertising leaflets have finally decided to increase their volume when the points of sale reopen. This can be explained by the search for a recovery plan, but it shows that despite the strategies and ambitions to reduce leafleting, the habits are well anchored.
Furthermore, in the case of the leaflet, we observe that specialised distributors tend to act more swiftly towards a reduction than the food superstore operators (GSA). The explanation lies in the economic model underlying the paper leaflet. Quite often, in the GSA, the leaflet is financed by back margins, so the retailers offer brands an appearance in the leaflet in return. The reduction or suppression of the leaflet therefore has a greater economic impact than in specialised distribution.
Marketing mix modeling methods to improve paper use
For the past year, we have noticed a huge demand for support from retailers. Employing a pragmatic approach that takes into account all stakeholders, local conditions and the role of communication channels (including the leaflet) as measured by data science on business indicators such as checkout, turnover or number of shop visits, allows us to optimise the use of paper communication methods as opposed to other digital communication methods.
Thus, an efficient and well-distributed catalogue creates an average of 9% additional in-store traffic and 13% additional turnover.
Eventually, there is a likelihood that this paper will disappear. Several trends will gradually replace catalogues and leaflets. These include approaches such as brand content, social selling, digitalisation of the catalogue or the use of digital media for local advertising linked to local shop issues.
In the meantime, the leaflet always sells (in certain regions, for certain shops). Between the expectations of consumers who remain attached to the leaflet and the "change management" necessary internally at retailers to change the processes that are now highly dependent on its distribution (shop organisation, stocks, merchandising), the leaflet will not disappear immediately, but will be greatly reduced. The share of leaflets in media budgets could increase, depending on the brands, from 25-60% today to 10-40% in two years' time.
As for the "Stop Pub" regulation, it will certainly have a minor role in the evolving communication mix of advertisers and is already globally respected. Therefore, why not replace the prohibition order with a "Yes Pub" sticker on mailboxes?