Catalog merchant

A catalog merchant (catalogue merchant in Commonwealth English) or catalog showroom is a form of retailing in which consumers select items from a catalog, inspect display samples in a public showroom, then submit written orders for immediate fulfillment from an attached warehouse which is closed to the public. The typical catalog merchant sells a wide variety of household and personal products, with many emphasizing jewelry. Unlike most retail formats, the vast majority of the merchandise remains in the warehouse space and is therefore immune to shoplifting because it cannot be touched by consumers outside of the presence of a cashier.

This retail format flourished in the 1970s as an attempt to combine the atmosphere of a department store with the convenience of reviewing a mail order catalog at one's leisure and the convenience and savings to be obtained from buying at a local discount store.

A consumer can search a mail order catalog for a particular product much more efficiently than walking around a department store and speaking with salespersons, but mail order has the drawbacks of very high per-item shipping costs, very slow fulfillment, and the inability to inspect the product until it arrives. Discount stores usually place their merchandise on self-service shelves open to the public where consumers can inspect the goods and then purchase and carry away a desired product that very day, but they suffer greatly from shoplifting. Full-service department stores provide a pleasant shopping atmosphere and have salespersons on the floor to provide quick service, but the consumer then has to deal with salespersons' tactics (e.g., hard sell, soft sell) and must pay higher prices to cover all that overhead.

A catalog showroom avoids all these issues. The consumer first searches the catalog at home at their leisure, and identifies products to see in person. The consumer then visits a local catalog showroom to inspect display samples of those products. The showroom is a retail environment which tries to reproduce the ambience of a department store on a much smaller scale, except with a smaller range of products. The consumer fills out and submits a written order form with catalog numbers corresponding to desired items. A clerk retrieves packaged products corresponding to those order numbers from an backroom warehouse space which is not open to the public and delivers them immediately to an on-site pickup counter.

The catalog merchant has generally lower prices than other retailers and lower overhead expenses due to the smaller store size and lack of large showroom space.

There are a few key benefits to this retail format. By operating as an in-store catalog sales center, it could be exempt from the "resale price maintenance" policy of the manufacturers, which can force conventional retailers to charge a minimum sales price to prevent price-cutting competition.

Because the consumer cannot touch packaged merchandise outside of the presence of a cashier, it also reduces the risk of losses to shoplifting, known in the industry as shrinkage. Display samples are still at risk for shrinkage, but are usually mounted or displayed in such a way that a thief who takes them will draw unwanted attention (for example, shattering glass to reach inside a cabinet).

From the consumer's point of view, there are potential advantages and disadvantages. The biggest advantage is that the catalog showroom tries to bring the warehouse to the consumer, so consumers can avoid the high per-item shipping costs associated with traditional mail-order catalogs and the high overhead of traditional full-service department stores. Catalogs traditionally emphasized such savings by showing the purported manufacturer "list price" versus the catalog price. The consumer can inspect display samples in the showroom before making a decision, rather than have to guess from a printed catalog alone whether the product is appropriate for their needs.