Live from the ACC: The Pros Speak, Part III

Chicago–In each issue of the Annual Catalog Conference Show Daily, we’ve presented opinions of a panel of experts on the state of the catalog industry. Yesterday, they discussed the Internet as a complementary marketing channel. Today, they’re discussing the future of the industry.

Our panel of pros: Reggie Brady, president of Reggie Brady Marketing Solutions; Steve Jones, vice president of marketing for multititle mailer Norm Thompson Outfitters; George Kiebala, vice president/senior account executive, Experian; and Allen Rosenberg, executive vice president, Marke Communications.

Q. Do you see any signs of the catalog business turning completely around?

Brady: I think 2002 will be a tough year for catalogers and for direct marketers in general. The news on all fronts continues to be glum, with consumers reacting to the current unsettled economic global climate. Catalogers have reduced spending on hiring, operations, capital budgets, and circulation. We’ve seen several catalogers go out of business or put all mailings on a temporary hiatus. The summer and early fall will continue in the doldrums, and catalogers will pin their hopes on the fourth quarter.

I wish I had a crystal ball to predict when the industry will turn around. My guess is that we’ll see the beginnings of a turnaround in the fourth quarter but that it will be next year before things really start to get better. An improving economy and a lessening of terrorist threats will inspire consumer confidence.

Jones: I don’t think the catalog business will turn completely around. We’ll evolve and move forward to a new place, incorporating what we’ve learned this year, as opposed to moving back to some place we’ve been in the past. This has always been a hallmark of our industry.

Each month we see improvement in the economic indicators and in our businesses. The recovery is happening, but I think it’s a long road out, with incremental rather than exponential progress. Next holiday will be a good bellwether for the industry, barring any catastrophic world events.

The world is growing more complex by the day, it seems, and as direct marketers, we have the ability to address our customers’ desire for a little more calm and simplicity in their lives, at least when it comes to shopping. The fact that they can order from anywhere in the world, any time day or night, with or without a catalog, makes it a little easier to get their shopping needs taken care of. This paired with a stronger economy can help pave the road to recovery.

Kiebala: The catalog medium remains an important component of the marketing mix. Its role has changed over the past few years, but it remains vital to any direct marketing strategy. Ten years ago the catalog was a driving force for customer acquisition and retention strategies in both the mail order and retail channels. Today, it complements all three channels in the multichannel marketing mix. The ways consumers are purchasing are changing–marketers need to link multiple channels together to better understand and drive purchasing behaviors across multiple contact strategies. So while the catalog business is changing, it’s such a critical component of the marketing mix there’s no doubt it’s here to stay.

Rosenberg: Most of our clients are finding it challenging just to meet 2001 sales figures and maintain current sales positions. Several have seen their spring direct business improving to meet plans. But all have cut circulation plans for spring 2002, kept inventories lean, and used fewer catalog promotions. All are counting on no outside activities, such as an anthrax scare, to keep consumer confidence high going into the fall.

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