Heating Up in a Cooling Economy

Want to do well in a recessionary economy? Hit your customers where they live. In other words, sell them products or activities that they can use or do at home. Not just home decor items, but projects and pastimes that provide enjoyment without huge expense.

Indeed, while consumers may be spending less overall, market niches that stay close to home are not merely surviving, but thriving.

Crafts: As Joan Litle, owner of Chelmsford, MA-based merchandising consultancy The Catalog Connection, explains, “During a recession, many people stay home and do crafts or play family games.” George Hague, marketing director of Berne, IN-based needlecraft supplies mailer House of White Birches, agrees: “The crafts market has traditionally held its own during a recession.” For House of White Birches, whose titles include Annie’s Attic and Quilter’s Catalog, profits are up this year, and the catalog company is on track to meet projected sales.

Another needlework catalog, Beaver Dam, WI-based Nancy’s Notions, has seen sales rise about 8% during the fourth quarter of 2000 and the first half of 2001. That figure is more than double the 3%-4% sales growth that owner Nancy Zieman initially forecast.

Other types of crafts catalogers, such as woodworking products mailers, are also doing well. For instance, Casper, WY-based Woodworker’s Supply catalog is enjoying more than 25% sales growth so far this year, says president John Wirth.

And while Medina, MN-based cataloger Rockler Woodworking and Hardware has not seen significant sales gains so far this year, CEO Ann Jackson says that the company was unaffected by the recession of the early 1990s, so it’s not panicking about the rough economy.

Pet supplies: Dan Dye, cofounder of Kansas City, MO-based pet treats purveyor Three Dog Bakery, reports that his catalog’s sales and average order size are up, though he won’t provide specifics. “Pets are part of the family,” he says, “and people want to buy them goodies and treats.”

Sales at Drs. Foster & Smith, an $80 million pet supplies mailer based in Rhine-lander, WI, are up significantly over last year’s as well as up about 8% over this year’s projections. “We’ve seen a slight increase in average order size, from the low-$60s range to the upper $60s,” says cofounder Dr. Race Foster.

Foster says that most families will cut corners for themselves before skimping on purchases for their pets. And, he adds, “if the recession does reach our niche, it will likely be in the toys category. Hopefully the food and medicine categories would help sustain us.”

Cooking accessories: Sales at Waukon, IA-based kitchen products marketer The Foodcrafter’s Supply Catalog are up approximately 25% over last year’s. Business is so good, in fact, that vice president/general manager Dan Sorensens plans to increase the catalog’s prospecting efforts by the fourth quarter.

Business is also booming for Norwich, VT-based baking supplies manufacturer/marketer King Arthur Flour. Its catalog sales are up about 12% this year, “and we are beating our own expectations by about 2%-3%,” says vice president of operations Sandy Sapp. “People are tight with their money during these times, and rightfully so. Our catalog enables them to scale down their finances by cooking at home.”

Adult entertainment: In a down economy, “customers are looking for value in something they can use again and again,” says Jim Dillingham, president of the Brisbane, CA-based Xandria Collection catalog of adult-entertainment products. And many adult-entertainment items, such as sexual aids, videos, and lingerie, fit that bill.

San Francisco-based adult-entertainment cataloger Good Vibrations has seen business pick up since the fourth quarter of 2000, says catalog manager Sarah Burgundy. And at Hillsborough, NC-based Adam & Eve, sales are up 5%, and the average order value is steadily climbing, says president Phil Harvey. Adam & Eve sells fantasy, he says, and “that is exactly what Americans want during bad times to cheer themselves up.”

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