Co-ops crippling catalog list business

Nov 01, 2007 9:30 PM  By

How are catalog list owners like the U.S. Postal Service? Both keep raising prices to make up for business shortfalls. And catalogers can’t ignore this vicious cycle, Bill LaPierre told attendees of the NEMOA conference in Portland, ME, in September.

LaPierre, senior vice president of list brokerage for Millard Group, referred to gifts and gadgets cataloger Brookstone’s decision to prospect only with the Abacus cooperative database. The strategy, according to Brookstone, is working out just fine, so it’s likely that other mailers may follow suit.

Most catalogers already rely heavily on the co-op databases for prospecting. “Close to 50% of catalog circulation is coming from the co-ops,” LaPierre said, and there are just six co-ops to choose from. It’s no surprise why catalogers are embracing the co-ops, LaPierre noted. Compared to conventional list rentals, co-ops are cheaper, catalogers don’t have to have their offers approved for the mailing, and overall it’s less hassle.

The savings with a co-op can indeed be substantial, according to LaPierre. For instance, if a mailer wanted to rent names from the Herrington gifts and accessories catalog — say, three-month buyers, males, who spent more than $1,000, with a product select, it would cost $232/M. You can get these names from the co-ops for $50/M, LaPierre said.

As a result of more mailers using the co-ops, fewer are renting names. “Yet list owners continue to raise prices to make up for the lost rental revenue,” LaPierre said. “This is an issue we need to address.”