Lists and Prospecting: Fall Forecast: Some Sun Ahead

Just as some observers estimate spring’s arrival by whether the groundhog sees his shadow on Feb. 2, many in the catalog industry view list rental activity as an early economic indicator. If this spring’s rental activity is any sign, the upcoming fall season should be at least a slight improvement over last year’s.

Spurred by better-than-expected early spring sales, suggestions of an economic turnaround, or plain old optimism, some consumer catalogers are ordering up to 20% more names for their fall mailings than they had a year ago.

Ellen Blumenkrantz, vice president of Cresskill, NJ-based list firm NRL Direct, estimates that the home goods and apparel catalogers that she works with are ordering 5%-20% more names than last year. Most of her catalog clients “seem to have recuperated from last year,” she says. So not only are they ordering more names to rent, but they also have a fair amount of hotline names to rent out to other catalogers.

This influx of new names may, in fact, encourage more catalogers to increase their rental orders as the season progresses. Clients looking to boost prospecting this fall, Blumenkrantz explains, “won’t have to go to poorer-performing lists or segments.”

Jim Hall, vice president of brokerage for Oklahoma City-based list firm Chilcutt Direct Marketing, is also seeing an upturn in rental business. “I definitely have several mailers increasing the number of lists they’re renting this fall by 10%-20%. And some mailers want to test new files, which is a good indicator.”

But Hall believes that the number of hotline names is smaller than it was last year. “A lot of acounts are down,” he says. “And that’s hurting average list order sizes.”

Likewise, John Papalia, president/CEO of Danbury, CT-based Statlistics, says that list quantities available for the upcoming fall season appear to be down “slightly” from last year.

And Ben Perez, president of Peterborough, NH-based list firm Millard Group, has seen a single-digit decline in list activity this spring. Perez had hoped for a 4%-6% uptick in fall prospecting, “but we’re not seeing that.”

Perez says that many clients are still suffering from soft sales; as a result, “they’re concentrating more on their bottom lines with less testing, less experimenting, and staying a little closer to home and their house files to maximize their circ dollars.”

Nonetheless, rental activity “does look better than it did for last fall,” Perez says. But among those mailers that are placing fall list orders, Perez says that he’s seeing continued pressure on negotiation of prices and nets and single- to mid-double-digit decreases in pricing.

Papalia contends that an uptick in rentals is inevitable. “Many mailers have maxxed out their cutbacks in prospecting,” he says, “and they’ll come back for holiday. A lot of catalogers who cut back earlier this year are looking to get back in the game.”

Maybe, maybe not

Berne, IN-based Dynamic Resource Group, a $15 million multititle mailer, isn’t one of those catalogers that will be renting more names for the fall. For starters, says catalog marketing manager George Hague, fall is traditionally a weak season for the company’s House of White Birches, Annie’s Attic, and Clotilde crafts catalogs. Another reason: “It usually pays to be careful after a postage increase,” Hague says, referring to the upcoming June 30 rate hike.

But Hague adds that for the Clotilde title, which the company just acquired this spring, he plans to test the House of White Birches file. Such database crossover potential “is one of the benefits of the acquisition,” he notes.

The June postage hike is also keeping Rye, NY-based Lillian Vernon Corp. from renting more names. David Hochberg, spokesperson for the gifts and home products cataloger, says that the company will prospect at similar levels to last fall.

But Steven Hawco, vice president of Enfield, CT-based Lego Direct, says that the catalog division of the toy manufacturer might “look at testing the prospecting market via list rentals” this fall for the first time.

Millard Group’s Perez sums up the wary optimism with which many catalogers and list firms are approaching the fall mailing season: “Our clients have been pretty resilient through this period, but there hasn’t been any strong indication that we’re headed quickly into a boon. But catalogers will need to bring in some new customers at some viable economic equation.”

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