I don't shop from catalogs anymore in the traditional sense (open catalog, see something, buy by phone/mail). But a lot of my online shopping is "catalog-driven". Catalogs have become nothing more than a powerful advertising and traffic generation tool for online retailers. I prefer to buy through the web -- its more accurate, the "nearby" items are frequently helpful, I can assemble an order over an hour while doing other things. I used to discount the effectiveness of online chat -- but I even find that helpful where human contact is necessary since email has never proven effective in these transactions (too much cycle time), and I don't mind being on hold or having delays if I can do other things. And they can chat with four or five people at a time using macros and scripted replys.
The catalogs I receive:
Computer catalogs -- mostly ineffective. I occasionally use the latest Dell catalog when someone asks my geek opinion on an upcoming purchase. I flip through mainstream retailers to get an idea of new things on the market but I drift to my normal retailers (buy.com, Amazon) for purchase.
Big Box Catalogs -- The Home Depot catalog generates ideas and discussions. But most big things are very expensive to ship and many things aren't available at local Home Depots. Target doesn't get much traction.
Specialty Retailers -- Pretty effective. I can flip through a paper catalog pretty quickly. If its in an unfamiliar marketspace (skilled trades), I find many things that I wouldn't know to search for online. Levenger is good for high-end office. Very low cost retailers like Harbor Freight Tools can provoke action with a sale. Household retailers like Frontgate are good for gifts (I would shortcircuit them online but much of their best stuff is exclusive or hard to search for). A lot of companies are losing money sending me kitchen gadget catalogs (probably fooled by substantial purchases around my wedding a few years ago). I think specialty book catalogs are effective (provide value from selectivity) but I don't end up buying many books. Crutchfield does an excellent job -- their high-end customer service and, more importantly, the assiduous bundling of the right accessories and documentation, make them well worth a premium price.
The best catalogs (and niche websites) do not have lots of choices. Professionals have determined the best handful of value propositions and present them. Even better, online you can have a "narrow" front-end (accessible via site organization) with a "broad" back-end (accessible via search) to cover both groups of customers.