Live from the Annual Catalog Conference: Cataloging Still Growing, Says DMA

Boston–During Tuesday morning’s Annual Catalog Conference opening session, Direct Marketing Association president Robert Wientzen managed to rally the troops with statistics indicating that “despite an economic slowdown, the catalog industry continues to grow.”

Wientzen cited figures and projections from the DMA’s upcoming state of the industry report. “Catalog sales are projected to reach $119.9 billion this year, up from $69.5 billion in 1996,” Wientzen told the crowd. And that growth will continue, though at a somewhat slower pace; by 2006, the DMA forecasts catalog sales to reach $160.2 billion.

Web-driven sales have also grown, from a scant $172 million in 1995 to $28.04 billion in 2000. But we ain’t seen nothing yet: Web-driven sales are expected to soar to $181.4 billion by 2006.

Catalogers’ advertising expenses will also grow, of course–from $14.3 billion this year to $18 billion in 2006, Wientzen said. The good news is that return on investment is projected to rise as well: “We are becoming more efficient at what we do.”

According to the DMA, 95% of catalogers consider themselves multichannel marketers, with only 3% seeing their business as catalog-only. Slightly more than half (53%) of the companies that participated in the DMA survey sell through catalog, Internet, and retail channels, while 42% sell through both the catalog and the Internet.

In addition to sharing statistics from the DMA report, Wientzen discussed the three key challenges that catalogers face today: privacy, taxation, and postal rates. Regarding the postal rates, he said that catalogers are facing “nothing short of a crisis.”

The rate hikes, said Wientzen, are “just a short-term fix for the Postal Service,” which is in dire need of an overhaul. “It was born in the 18th century, it became a 19th-century monopoly, and it is governed by 1970s rules,” he said. Without change, he warned, “the USPS is on a death spiral.”

Following Wientzen’s address, two catalogers received Robert Rodale Environmental Leadership Awards: Dell, for Recycler of the Year, and Norm Thompson Outfitters, for Environmental Mailer of the Year.

Bran Ferren, cochairman/chief creative officer of Glendale, CA-based Applied Minds, followed the awards presentation. “Brace yourselves,” he told attendees. “This isn’t the talk you were expecting.”

Entitled “The Art of Storytelling,” Ferren’s address focused largely on how companies manage during times of enormous change. “Many companies are obsessed with getting the right answers, but they’re asking the wrong questions,” he said.

Ferren suggested that companies follow six points of reference to survive and thrive. “If you don’t remember these six things,” he cautioned, “you run the risk of failure”:

1) Vision. “Understand how people change, and accommodate that.”

2) Talent. “If you don’t have top talent, you’ll fail.”

3) Trust. “You need a trusted brand, trusted service, and a trusted identity.”

4) Complexity. “Complexity is your enemy. Point of view is critical.”

5) Viscosity of information. “Ask yourself, How quickly does information flow through my business to my customers?”

6) Education. “If you don’t have educated consumers or employees, you don’t have a business.”

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