Live from Catalog on the Road: Be Hesitant in 2007

Cambridge, MA–During his 30 years in the list industry, Millard Group president Ben Perez has approached the catalog market with a glass-half-full attitude. But this year he’s taking a different approach: He’s wary and bracing himself for what may go wrong.

“This year is much more of a challenge for multichannel merchants,” Perez said Tuesday at the DMA’s Catalog on the Road event here. “We all need to think about things going the way they are not expected to.”

Energy prices are still rising, and Perez believes that consumers will respond by spending less. Add in a more competitive retail landscape, with mass-market retailers such as Target cutting into niche-catalogs’ sales, and a drop in the real estate market, and there is a chance sales will not rise as much as they have in years past.

The National Retail Federation is predicting retail growth of less than 5% in 2007, Perez said, but that does not necessarily relate to multichannel merchants.

“When the value of homes drops upward of 20%-25%, that’s a fact multichannel retailers have to deal with,” Perez said. “When a postage increase gets factored in, and there is a war that is costing the country $120 billion a year, that’s a fact. It’s time to be pessimistic, but to keep your approach optimistic.”

That means catalogers will need to look deeper into their house and prospect files, and approach data mining and modeling with an edge, he continued. They’ll also need to go back to basics and renew their focus on merchandise.

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