QCI Direct Feels Walmart Free Shipping Effect

IT’S HARD (OR IMPOSSIBLE) FOR ANY RETAILER TO COMPETE WITH WALMART ON PRICE. So when the general merchant announced free holiday shipping on its website in November, it was a blow to some catalogers.

Cleaning supplies and home improvement products merchant QCI Direct, which mails the Home Trends, Sleep Solutions and Picket Fence catalogs, felt the effect. “We knew our customers would be influenced by these holiday opportunities,” says QCI Direct president Jane Glazer. “We do not have the distribution advantages that companies like Walmart have and can’t afford to compete on those levels.”

QCI Direct’s holiday sales fell 10%, but not just because of Walmart’s aggressive offer. QCI Direct had cut back on its circulation. At the start of 2010, QCI Direct increased circulation by 15% because “we were sure the recession was over,” Glazer says. That turned out to be a tad ambitious, Glazer says. “We were ahead of the curve and took the loss.”

Due to a first-quarter loss, Glazer says the company was “quite conservative” the rest of the year. “In the past we have always increased circ for the fourth quarter, but this time we reduced it by 10%.” QCI has never had a really strong fourth quarter “because none of our catalogs are gift catalogs,” she says.

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