Chicago–What with continual postage and parcel shipping increases, not to mention a rocky economy, these are hardly the best of times for catalogers. With that in mind, we’ve rounded up several industry notables to discuss the challenges they face–and more important, how to surmount them.
In each edition of the Annual Catalog Conference Show Daily, we’ll present the insight of this panel of experts: Reggie Brady, president of Reggie Brady Marketing Solutions; Steve Jones, vice president of marketing for multititle mailer Norm Thompson; George Kiebala, vice president/senior account executive, Experian; and Alan Rosenberg, executive vice president, Marke Communications.
Q. Given the rise in postage, how much longer will mailers be able to continue to afford mailing their catalogs?
Brady: Catalogers are already revamping their strategies. L.L. Bean’s president/CEO, Chris McCormick, recently stated the company will look at reducing the number of catalogs it sends out. Last year, L.L. Bean mailed 95 catalog editions–10 core and 85 specialty. He noted that the company’s best customers may receive 80 catalogs over the course of a year and questioned the effectiveness of this strategy. “We need to increase our voice, but once those customers receive their 78th, 79th, and 80th catalogs, those books are no longer effective. We’re going to fix that.” Catalogers are going to have to market smarter.
Catalogs in the mail are not going to disappear, because they are still the prime driver of sales. But modeling and scoring and more segmentation are becoming must-dos.
Jones: It depends on the mailer. I believe one of the casualties of the USPS situation is the entrepreneurial start-up catalog. The barriers to entry (including postage) for a start-up catalog are prohibitive at this point. I’ve seen the passing (or merging/acquisition/absorption) of some interesting, distinctive small brands this past year. For the small mailers, in many cases, time is already up.
Larger mailers have a few more options. We’ve been utilizing partial alternatives for several years now, but when it comes to delivering catalogs, it’s a little difficult without the USPS, and for last-mile delivery, the USPS still has the most comprehensive infrastructure. I don’t foresee a complete alternative to the USPS. There just isn’t one. But I think there are tremendous opportunities to prune costs and inefficiency from the USPS, rely on private carriers for those functions, and leverage USPS for the last mile.
Kiebala: In this evolving industry, marketers should not so much look for catalog alternatives as for complementary marketing strategies and channels to enable the catalog to perform more effectively. Develop sound targeting and contact strategies, then analyze those strategies across multiple channels.
Consumers, of course, don’t concern themselves with rising postal rates, increasing printing expenses. and shrinking budgets. They react to promotions on their terms. So marketers need to communicate effectively across multiple channels to each customer. Then integrate those channels to grow and retain the emerging multi-channel customers. This way, performance will outpace postal increases, paper increases, and other economic obstacles.
Rosenberg: Postal increases always have direct mailers educating themselves on alternatives. I can tell you that the June USPS increase has led clients to look to cost-saving measures among the following areas: catalog trim sizes; changes in paper grades and weights; co-mailings; less prospecting; and increases to consumers for handling fees.