List Watch: List Roundtable

Most of the list professionals contacted by Catalog Age report that spring list orders are comparable to last year’s or up somewhat. What’s more, they remain optimistic that despite the economic slowdown, business will remain solid, if not increase.

Howard Kupfer is senior vice president of brokerage for Hackensack, NJ-based list firm Mokrynski & Associates.

We have seen an increase in spring list orders over spring 2000 by 10%. Some of that increase was due to new business, mostly from catalogers, rather than increased circulation by catalogers. It’s also from some dot-coms that are using direct mail or catalogs to promote their Websites or generate business. We have also noticed a slight shift in prospecting away from cooperative databases toward list-specific use.

Spring is a strong season for apparel mailers, so there is heavy use of clothing lists in this season. That’s no different from prior years. We see the same types of lists being used as before. Many catalogers have a core of bellwether lists that keep working for them over time. Then again, as time goes by, some of these lists start to fall off.

Although catalogers are always looking to test new lists, there really isn’t anything new being used out there except some selections, such as the postal addresses of Internet buyers. More companies are looking to target consumers who have bought through the Net but are also mail order buyers.

This year, we have a weak stock market, lower consumer confidence, and a postage increase. We see some leveling off in prospecting from last year by some of the larger catalogers that expanded prospecting and increased circulation in 2000. Typically, we see a year or two of big increases by larger mailers, followed by a leveling-off period, because they’ve generated a lot of new buyers and can now focus on selling to those new buyers. On the other hand, with emerging companies, you don’t see that, because they have to expand their circulation constantly to grow their business.

Should the spring/summer season be stronger than expected, then we speculate that catalogers will increase circulation for fall and especially the holiday season, because they’ll be more confident. On the other hand, if spring/summer sales are weak, they’ll tend to hold back fall/holiday circulation to optimize profitability.

Geoff Batrouney is executive vice president of New Rochelle, NY-based list firm Estee Marketing Group.

Although the postal increase caused quite a few spring 2001 orders to mail in December 2000, the list industry will thrive in 2001 for several reasons: First, the catalog industry business model, when coupled with Internet-based selling, works. Many Internet companies have recognized the need to have a dual-channel-of-distribution model in which their customers are sent a catalog referencing a Website, enabling consumers to order through either channel. And that means lists are an important and essential part of the marketing mix they employ.

Second, I do not believe we will see a dramatic slowdown in catalog companies’ growth, because they have always been resilient in dealing with pricing pressures. It might be that pricing negotiations will make a dent in some list owners’ rental income, but I expect list orders to be maintained.

Third, while I don’t expect it to be strong in every sector, as mailers consolidate, they will be more likely to chase market share more aggressively — and that translates into renting more lists and mailing more books.

Finally, our gifts and home catalog clients, such as Encore and Trademark Collection, have experienced a strong fourth quarter. This translates into a larger universe for mailers to rent. Home ownership — and the demand for home goods — is at an all-time high. As a result, our clients that focus on selling merchandise targeting the home-centered buyer are renting more home lists.

Other strong categories for this year will be apparel and leisure, and possibly golf, which has just become America’s most popular national sport. So overall, I see a healthy 2001 ahead of us.

Jeff Kelley is senior vice president of The Millard Group, a list firm based in Peterborough, NH.

Looking at January mail dates, there appears to be more list exchanges by catalogs — even among historically conservative catalogers — to reduce costs. Exchanges for some clients are up 50% over last year, while rentals are up only 10%, in terms of overall volume. Also, January is typically a strong season for mailing apparel and accessory books. Many clothing catalogers had good holiday seasons, coming off a softer-than-expected fall. And I hear many mailers talking of being more selective and mailing to the strongest outside files.

The biggest rental gains for spring are in women’s apparel, followed by gifts and home, because this is a strong season typically for these kinds of catalogers. The biggest falloff in rental volume is coming from renting publishing lists, but we haven’t seen any big falloff among catalog lists at this point.

If you look at the mixed results in profits that the public catalog companies are reporting, you can see that while sales may be strong or on plan, costs and other factors are making it harder to drive profit to the bottom line. As a result, in renting out their lists, catalogers seem more willing to explore the revenue opportunities within their list assets.

Also, we are seeing large publishers exploring alternative media, including catalog list rentals both for subscription growth and incremental revenue. Some of these programs are taking on the appearance of partnerships and barter arrangements. For the first time, catalogers and publishers are starting to approach each other to develop synergies that will benefit both parties. This is clearly a reaction to the decline of the sweepstakes mailers and the impact those programs had on subscriber growth rates.

Mark Ryan is owner of Plainfield, IL-based Quality Mailing List Services.

As a processor of lists after they have been rented (at the merge/purge stage), so far we are seeing volumes similar to last spring’s. We saw no apparent push to mail prior to the new postal rates on Jan. 7.

Also, e-commerce is helping to boost the number of available mailing lists. Many of the former Web pure-plays are putting their mailing lists on the market. And within the past year, several online marketers have introduced print catalogs. Since many marketers realize that direct mail is the ideal complement to Web-based marketing, it’s making catalog lists more valuable to them.

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