Early fall sales solid, but hardly overwhelming The media have been abuzz with talk of a drop in consumer spending and an overall economic slowdown. But mailers contacted by Catalog Age in late September say that their early fall sales were nonetheless meeting – or beating – plan. Few report gangbuster sales gains, but none say they’re coming up short either.

The Conference Board’s Consumer Confidence Index dipped moderately in August, from 143.0 in July to 141.1; the Board’s Consumer Expectations Index also fell slightly, from 113.7 in July to 113.0 in August. “Recent fluctuations may indicate that confidence levels have reached a plateau, and a cooling in spending habits may well be on the horizon,” Lynn Franco, The Conference Board’s Consumer Research Center director, said in a statement.

And for some mailers, it was a fairly cool summer as far as sales were concerned. “Summer sales were slower than usual,” says Liz Plotnick, chief operating officer of Gooseberry Patch, a $14 million cataloger of country-style home goods. But as the weather cooled, sales heated up. “We were in the single digits in terms of percentage sales gains before Labor Day,” Plotnick says. “We’ve been getting into the teens since.”

Plotnick attributes some of the Delaware, OH-based cataloger’s surge in September sales to a 15%-off promotion that the company used to run in June: “This year, we waited until August for that promotion.” Then, too, the double-digit sales gain follows a 20% circulation increase.

Among other catalogers contacted, James Stewart, vice president of marketing for London-based menswear cataloger/retailer Charles Tyrwhitt, calls the difference in his company’s August and September sales “staggering. I don’t know if it’s because everyone decided to buy clothes since it’s fall,” he says. “But we’re 40% ahead of September of last year, which is right on target, having launched our U.S. catalog last March.”

As with Gooseberry Patch, a special promotion – buy three shirts, get a fourth free – bolstered sales of the San Francisco-based unit of Charles Tyrwhitt, Stewart says. He also believes that the $22 million marketer has benefited by including more action photography than it did in its previous catalogs. “We used to just run product shots or photos of our shirts being worn by celebrities,” Stewart says. “But we’ve been doing more lifestyle photography, such as showing a man playing golf.”

Even without the benefit of launching a title in a new country like Charles Tyrwhitt did, multititle cataloger Hanover Direct is enjoying double-digit sales increases. “Our sales [throughout the year] have been tracking 10% ahead of last year, and so far, our fall sales are on that track,” says a spokesperson for the $550 million Weehawken, NJ-based marketer, whose titles include bedding catalogs The Company Store and Domestications, apparel book International Male, and housewares catalog Kitchen & Home. “Our brands have shown nice sales performance, and I’d anticipate that forecast will hold through fall.”

Small catalogers, big gains Several appreciably smaller catalogers are also seeing sizable sales gains. Fall sales have been “right on target – up 31% over last year” for Colorado Springs, CO-based Dance Fashions. While a 20% increase in circulation helped fuel the sales growth, chief financial officer Rich Libert believes that improved customer service is also a factor. “We updated our computer system and trained our current customer service reps more,” he notes. “We also hired additional customer service reps.”

September sales at Key West Aloe, a $6.5 million cataloger of personal care products, have been 8% ahead of plan, says mail order manager David Hecht. And plan, he adds, called for a sales increase of up to 15% this fall over last, based on a 15% circulation increase.

“We’ve stepped the catalog into the 21st century with a totally new look,” Hecht says, “and everyone seems to like it. The graphic look has a much more open feeling, and we have better photography.”

The Key West, FL-based cataloger has also benefited from the public’s heightened awareness of the dangers of sun exposure. “We have an FDA-approved SPF 30 sunscreen that a lot of people have been interested in,” Hecht explains. “Our customers have cited articles on sunscreen that have appeared in Time and The New York Times.”

Also reporting strong sales is $300,000-plus western wear cataloger Cattle Kate. “From last year our overall sales are up 30%,” says owner Kathy Bressler. “This is probably up 20% more than we anticipated. I expect fall sales to be really good – probably along the lines of a 20%-30% increase.” As is the case with Dance Creations, Key West Aloe, and Gooseberry Patch, though, the Wilson, WY-based cataloger’s sales gain follows a jump in circulation – in the case of Cattle Kate, a 50% increase, to 150,000 catalogs for the year.

Charlotte, VT-based Hearthside Quilts did not increase circulation, and it’s not seeing an increase in sales. “Fall sales are about the same as last year, and we had expected them to stay about the same,” says George Wachob, president/owner of the quilts catalog.

Jewelry/gifts/tabletop mailer Ross-Simons also kept circulation flat this fall. The $222.5 million cataloger’s plan, however, called for a single-digit sales gain over last fall, says president Darrell Ross. A 4% increase in the average order size, largely due to price increases, is driving the sales gain.

Beyond the fall Fall sales performance isn’t necessarily a harbinger of holiday tidings. But several catalogers feel confident that their holiday sales, like their early autumn sales, will meet, if not beat, plan. Key West Aloe’s Hecht, for one, is looking forward to a “great” season.

But Todd Slater, retail analyst for New York-based investment house Lazard Freres, contends that catalog sales “are in a deceleration period. This fall, you have higher interest rates and higher gas prices.” Then, too, the subdued stock market – at least compared to last year – may be putting fewer dividends in consumers’ pockets. “The real discretionary product categories, such as apparel, jewelry, and perhaps electronics, will be harder hit than consumables,” Slater says. And, he notes, “companies have to go up against extremely tough comparisons from last year’s big numbers.”

That sort of reasoning isn’t enough to discourage some catalogers’ optimism, however. “There’s still full employment,” says Ross. “In fact, as I drove to work this morning, I heard more radio ads for employment than I did for selling products. Customers are still responding.”

Indeed, “there’s this underlying theme that the economy might be slowing down,” says Paul Reulbach, general manager of Ridgefield, CT-based list firm D-J Associates. “But we’re not seeing signs of it yet.”

The Confidence Board’s monthly Consumer Confidence and Consumer Expectations indices can present seemingly contradictory results. For example, the percentage of its August survey participants who expected business conditions to improve during the remainder of 2000 grew slightly from 17.2% in July to 17.4%, and those expecting conditions to worsen fell to 5.5% from 6.1%. And 27.9% of respondents anticipated an increase in their income in August, up from 26.4% in July. On the other hand, those expecting fewer jobs to become available rose a full percentage point, to 11.2% from 10.2%.

Just as the man who wears two watches never knows the time, the man who consults two research firms never knows the size of the e-commerce market. Jupiter Communications predicts online holiday merchandise sales of roughly $9 billion, with travel-related purchases accounting for another $3 billion. PricewaterhouseCoopers is more bullish: It expects online holiday merchandise sales of about $10 billion. Forrester Research also expects online holiday sales of $10 billion, with 16.6 million U.S. households shopping online during the final six weeks of the year. And GartnerGroup expects consumers in the U.S. and Canada to spend about $10.7 million online.

Interestingly, the research firms don’t even agree on how much was spent online during holiday 1999. Forrester Research pegs the amount at $5 billion, compared with GartnerGroup’s estimate of $6.3 billion.

Overall, PricewaterhouseCoopers expects the holiday season will not be as merry as marketers would like. While the total retail sector, excluding automobile and gasoline sales, grew 8.4% last holiday season, this holiday it is forecast to grow just 4.5%. PricewaterhouseCoopers expects online sales to nearly double, though even then they will make up just 1.2% of total retail sales. Conversely, sales at chain department stores are expected to fall 1%. Among merchandise sectors, it is expecting the largest growth to be in home furnishings and consumer electronics, with sales up almost 6.5% from last holiday.

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