Forget last fall’s double-digit circulation increases and expectations of equally heady sales boosts. Among the marketers interviewed by Catalog Age in late May through mid-June, just one in four plan to increase fall/holiday circulation this year. In fact, one-third expect to cut circulation.
Business-to-business multititle mailer Masune First Aid & Safety, for instance, is slashing fall circulation 10%. Motivational tools manufacturer/marketer Successories, which suffered a 10% decline in first-quarter sales, is planning to pull back circulation, though at press time president/CEO Gary Rovansek wasn’t certain by how much.
And kitchen goods cataloger/retailer Sur La Table will cut its fall mailings 5%. Although Sue Ghilarducci, director of catalog for the Seattle-based company, says she’s optimistic that the economy — and sales — will pick up during the fall/holiday season, “from an economic standpoint [circulation cuts] seemed necessary in order for us to mail smarter.”
Indeed, the general slowdown in spending isn’t the sole reason catalogers are reducing circulation. The January and July postage rate increases have led many to rethink their mailing plans. Tim Baker, general manager of Valencia, CA-based Mail Order Medical Supply (MOMS), cites both those reasons, as well as difficulty in finding suitable prospect names, when explaining why he is reducing circulation “a bit.”
MOMS sells medical supplies to at-home caretakers and other consumers, “and it’s difficult for us to find a large universe of names,” Baker notes. “We’re going to do more-selective prospecting.” This will include focusing more heavily on alternative media, such as magazine advertising.
MOMS’s forecast still calls for a 25% revenue increase over last fall’s sales, but that’s not as large as the 40%-50% sales growth of previous years.
Even those catalogers that are increasing fall circulation are erring on the side of caution. Burnsville, MN-based Northern Tool & Equipment enjoyed a “significant” lift in response earlier this year, says vice president of marketing Jay Berlin, following an increase in the ratio of house-file mailings to prospect mailings.
Nonetheless, “we’re not going to go hog wild” when it comes to boosting fall circulation, Berlin says. As of early June, the $347.8 million mailer, which sells to both businesses and consumers, had yet to decide how much it would increase circulation.
Wine cataloger Geerlings & Wade will be increasing circulation “fairly aggressively,” says vice president of marketing Eric Welter, though he won’t reveal an exact amount. But that increase includes a prospecting mailing that the Canton, MA-based marketer delayed from earlier in the year, in a bid to bolster profitability.
The well-trod middle ground
Most mailers contacted by Catalog Age are keeping circulation the same as last fall — even those who expect the economy to turn around.
John Kuehl, senior catalog manager for Chippewa Falls, WI-based Mason Shoe Manufacturing, is one cataloger who is expecting “a bit of an upturn” despite a soft first quarter. He bases his optimism on an uptick in sales that began in April. “We expect that turnaround to continue through the end of the year,” says Kuehl, whose company includes the Maryland Square, Massey’s, Mason Direct, Stuart McGuire, and Wissota Trader titles. As a result, despite flat circulation he’s projecting a 5% sales increase for fall.
Also optimistic about a sales resurgence is Jo-Von Tucker, chairman/CEO of Chatham, MA-based Clambake Celebrations, a cataloger of seafood gifts. “The fall/holiday will turn out to be a good season for us — the economy will improve significantly,” she predicts. “We had our best sales week of the year in late May. So not only will our sales continue that pace, but I just don’t think things as portrayed in the media are that grim.”
Nonetheless, Tucker appears to be hedging her bets by keeping circulation flat. The company plans to stick to tried-and-true strategies, such as mining its house file and advertising in magazines rather than renting lists.
Ron Rowen, president/CEO of Van Nuys, CA-based luxury car parts cataloger Performance Products, is still projecting a 10% rise in annual sales despite flat circulation — and disappointing spring sales.
The company exceeded sales plans in January and February, but then came up short from March through May. “Our sales hit an invisible wall,” Rowen says. “It was as if everybody took a look at their tax returns and saw what was going on in the economy and brought their spending to a grinding halt.”
Fortunately for Performance Products, sales rebounded in June. Now Rowen believes that the upturn will continue throughout the year. And rather than renting lists to prospect, Performance Products is counting on the Web to generate new customers. Performance’s Website now accounts for 50% of the new names the company captures.
Like so many other catalog companies, women’s apparel mailer Peruvian Connection is neither increasing nor decreasing circulation throughout the rest of the year. “Our spring was only O.K., but in comparison to what others in the industry have been telling me, we did better than most,” says John Vesbach, chief operating officer/vice president of finance for the Tonganoxie, KS-based company. “And now I hear expectations that it’ll bound back this fall. But I’m not sure.”
In fact, Vesbach is laying off making predictions altogether. “I’ve worked in this business for nearly 25 years, and it seems like every time I think I know what’s going to happen, it usually ends up 180 degrees from that point.”