Sunday, January 1, 2012

An App to Kill the Printed Catalog 
The holiday season is the shopping season. It is also the catalog season, with tens of millions of glossy catalogs sent out to encourage people to shop. Although there’s nothing new about it, this year we can finally say there is a light at the end of the catalog tunnel. I’m talking about Catalog Spree, “the ultimate digital catalog shopping experience for the iPad.”

... It’s convenient, user-friendly, provides customers with a fun and easy shopping experience and retailers with an effective way to engage with customers, not to mention a better ROI. In other words, it’s a game changer.

... Printed catalogs [are] ... one of the most vivid examples for the unsustainability of the existing economic model. Think about it – each year, about 19 billion catalogs are mailed to American consumers. It means that every American receives more than 60 catalogs every year on average. Why? Because according to the Direct Marketing Association, printed catalogs provide a 7 to 1 ROI and an impressive direct order response rate of 2.24 percent....

... The only reason printed catalogs generate such ROI is because retailers don’t pay for their environmental impacts. These externalities include, according to Catalog Choice, 53 million trees that produce 3.6 million tons of paper, 5.2 million tons of carbon dioxide emissions, and 53 billion gallons of wastewater. If you would add these elements to the bill, I doubt how attractive the ROI of catalogs will look then.

In the last decade or so we have seen endless efforts to reduce the number of catalogs. Organizations and activists fought fiercely against retailers, tried to educate both the public and retailers why catalogs are bad for planet, created innovative tools such as Catalog Choice to help people opt out, supported legislation to ease the opt-out process, and so on. There were few victories here and then, but in all the number of printed catalogs continued to be stable.

The only thing that has put a dent in what seemed to be an unbeatable system is the economy. Rising production costs together with the sluggish economy got some retailers like Bloomingdales, Nordstrom and J. Crew to stop mailing catalogs to their customers and start showing them on their website. The digital shopping experience they provided was nice but not that great. Something was still missing there. Then came the iPad....

... In 2011 we have seen a growing number of companies and websites that are offering catalog apps...

Catalog Spree ... enables users to flip through catalogs from 150 retailers such as Coldwater Creek, JCPenney and American Girl. The app ... already has more than 150,000 users. Its business model is based on revenue share with some retailers and payments for traffic from others. It’s not clear if the company is profitable yet, but it secured a $6.1 million investment in Series A funding, led by Comcast Ventures, with participation from BlackBerry Partners Fund and El Dorado Ventures.

... Printed catalogs is a $300 billion industry and you start to see why they decided to invest money in Catalog Spree.... Filston [spends] .... $1 million ... on printed catalogs....

By Raz Godelnik, co-founder of Eco-Libris, a green company working to green up the book industry in the digital age and adjunct professor in the University of Delaware’s Alfred Lerner College of Business and Economics.
Triple Pundit 
December 23rd, 2011

According to each year, 19 billion catalogs are mailed to American consumers. What's the impact?
  • Number of trees used - 53 million trees
  • Pounds of paper used - 3.6 million tons of paper
  • Energy used to produce this volume of paper - 38 trillion BTUs, enough to power 1.2 million homes per year
  • Contribution to global warming - 5.2 million tons of carbon dioxide emissions, equal to the annual emissions of two million cars
  • Waste water discharges from this volume of paper - 53 billion gallons of water, enough to fill 81,000 Olympic-sized swimming pools
Environmental impact estimates were made using the Environmental Defense paper calculator.

The costs can be estimated crudely through a variety of sources.

According to the National Tree Benefit Calculator at  the value of a 24 inch maple tree in a park or vacant area in the North is $146  According to the average value of a street tree is $525.  For 15 productive trees assigns a value of $239.74 or $15.98 per tree.  We have utilized a value of $16 per tree.

According to RISI PPI Pulp and Paper Week at prices for coated paper in December ranged from $795-$1,350 per ton.  We conservatively used a price of $900 per ton.

According to a March 10, 2011 Federal Register Notice entitled "Energy Conservation Program for Consumer Products: Representative Average Unit Costs of Energy" by the Energy Efficiency and Renewable Energy Office available at Representative Average Unit Costs of Energy per million BTU Electricity were $34.14 (11.65¢/kilowatt hour (kWh), for Natural Gas $11.01 ($1.101/therm or $11.29/MCF) and for Heating Oil $24.59 or $3.41/gallon.   We have utilized an estimate of $22.50 per million BTUs.

According to a February 10, 2010 Technical Support Document: "The Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866" available at an Interagency Working Group on the Social Cost of Carbon (SCC), United States Government with participation by the Council of Economic Advisers, the Council on Environmental Quality, the Department of Agriculture, the Department of Commerce, the Department of Energy, the Department of Transportation, the Environmental Protection Agency, the National Economic Council, the Office of Energy and Climate Change, the Office of Management and Budget, the Office of Science and Technology Policy and the Department of the Treasury selected four SCC estimates for use in regulatory analyses. For 2010, these estimates are $5, $21, $35, and $65 (in 2007 dollars). The first three estimates are based on the average SCC across models and socio-economic and emissions scenarios at the 5, 3, and 2.5 percent discount rates, respectively. The fourth value is included to represent the higher-than-expected impacts from temperature change further out in the tails of the SCC distribution. The central value is the average SCC across models at the 3 percent discount rate. These SCC estimates grow over time. For instance, the central value increases to $24 per ton of CO2 in 2015 and $26 per ton of CO2 in 2020.  Based upon this we conservatively apply a value of $20 per ton.

According to centralized wastewater treatment facilities can cost anywhere from $20-$40 per gallon or more, depending on the size, the level of treatment required, the economy, and whether the project is a private job or a government job.

Tallying the costs results in the following:

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