Circulation strategies 2001 Postal rate hike not keeping catalogers from mailing more In a snapshot poll that Catalog Age conducted in September on its Website (www.CatalogAge mag.com), 53% of respondents said they plan to mail more catalogs in the coming months. And while 47% said they would mail the same number of catalogs as a year ago, none of the respondents said they planned to mail fewer books. Although this unscientific poll didn’t break out consumer and business-to-business catalogers, most of the b-to-b mailers contacted in September also intend to boost circulation.
Considering that the U.S. Postal Service rate increase slated for January could boost postage as much as 14.8% for some mailers, one would expect b-to-b marketers to keep circulation conservative for next year. “The postal rate increase will be factored into our plans,” notes Shelley Boxer, vice president of finance for MSC Industrial Direct, a $678.8 million cataloger of maintenance, repair, and operating supplies. The Melville, NY-based MSC has not determined its mail plan for next year, because its annual full-line catalog doesn’t mail until September.
Yet despite the pending postal rate hike, most b-to-b catalogers contacted plan to mail more in 2001. Dog Outfitters, a $13 million Hazelton, PA-based cataloger of supplies for pet stores and groomers, is among a number of b-to-b catalogers planning to mail about 10% more books in 2001 than this year. The postal rate hike will have some impact on the cataloger’s circulation plans, says Dog Outfitters president Mike Kelly, “but we’re going to have to live with it, maybe by taking a page count reduction.” Buyers from the company’s Website account for most of the 10% increase in circulation.
From an overall perspective, Steve Roberts, president of Edith Roman & Associates, says that all of the Pearl River, NY-based b-to-b list firm’s catalog clients plan to mail about 25% more books next year. Catalog circulation planning is not so much determined by the cost of postage, but rather “a function of cost per order or cost per lead,” he says. As long as business mailers can generate increases in response and average orders that will offset the postage rate hike, they won’t feel the need to cut circulation.
Postage increase `overstated’? Like Dog Outfitters, Braintree, MA-based educational supplies cataloger J.L. Hammett Co. plans to mail 10% more books next year, says director of marketing Dave Merigold. Having already captured the names of the nation’s school districts, “we’ve identified a number of before- and after-school programs that we hadn’t reached before,” he says.
Merigold notes that the number of before- and after-school programs has increased dramatically during the past few years, opening up new opportunities for the $200 million J.L. Hammett. In 1998, U.S. schools and YMCAs ran some 22,000 programs nationwide. This year, the number of programs will reach more than 80,000, says Merigold, citing a 1999 Quality Education Data research report. “Our product line adapts easily from classroom to after-school program,” he says. And more and more of these programs “are using core educational materials, from arts and crafts to play balls and physical education supplies.”
Milwaukee-based National Business Furniture also plans to mail 10% more catalogs in 2001, says president/CEO George Mosher. “This year, we cut back significantly [10%-15%] because we felt we were getting a hidden duplication in mailings.” After merge/purging and otherwise cleaning up its house file, National Business Furniture discovered that individuals from companies that were already receiving its catalogs were being mailed prospecting books, “Our catalogs tend to get passed along within companies,” Mosher points out, so the marketer didn’t want too many books going to more than one person within a target company.
Having straightened out its prospecting problem this year, National Business Furniture hopes to return to the circulation level it reached in 1999, Mosher says, despite the pending postal rate hike. “The postage increase has been overstated,” he contends. “We believe it will have a minimal impact on our business, because the larger rate increases will affect mailers that don’t do a lot of presorting. Although some of our catalogs will be affected more than others, for the bulk of our mailings we’re looking at only a 3% rate increase.”
Beauty salon supplies cataloger Nailco Salon Marketplace won’t be boosting circulation next year, but not because of the postal rate hike. President/founder Larry Gaynor expects his postage costs to increase 8%-12% next year, “but we find that insignificant,” he says. “Instead, we look at our response rate. If response stays high, we keep mailing to prospects; if it dips, we cut back.”
In 1999 the Farmington Hills, MI-based cataloger reduced circulation 10% “because we decided that, instead of targeting certain types of businesses in our prospecting, we’d target certain regions,” Gaynor says. “We cherry-picked states where we thought response would be weaker and did not send catalogs to salons there.” Though the strategy was intended to cut costs, it also cut response, so this year Nailco went back to mailing to all possible prospects and is sticking to that strategy. And because Nailco targets licensed beauty salons, its prospecting universe is limited.
The Net no threat Just as the postal increase appears to have little effect on b-to-b circulation plans for 2001, neither does the Web.
Although National Business Furniture is in the process of putting all its catalog pages on its Website, “we have no long-term aspirations of scaling back our print catalog” in favor of the Internet, Mosher says. “The catalog does so much better in print than it does on the Internet.”
At one time, the $54 million Nailco expected customers to migrate from the print catalog to its Website, allowing the company to reduce circulation, but that doesn’t seem to be the case. “Response remains strong in our print book,” Gaynor says. “So we have to maintain the catalog.”
As for maintenance products mailer MSC, “I point to one large apparel cataloger that built up its Website while neglecting its direct mail program,” says vice president of finance Boxer. “Then the company found that if it didn’t mail, it didn’t make any money. So we’ll promote our Website, but we have no overall plan to phase out our print books.”
While few business catalogers seem to be planning major circulation changes for next year, a number are planning to make production changes. For instance, National Business Furniture this year mailed a 132-page catalog and a 196-page edition. Next year, however, the company plans to test a 64-pager and a 220-pager in addition to the 132-pager.
Salon supplies cataloger Nailco plans to add 40 pages to its two primary mailings next year, says president/founder Larry Gaynor. “We just added a 20-page section of such items as pens, pads, clocks, shirts, and caps, and we’re finding incredible success with that category.” In addition, Nailco plans to increase the number of inserts in the catalog from two this year to three next year. “This year, we had inserts for jewelry, and our jewelry sales increased 300%. We couldn’t believe it,” Gaynor says. “Our inserts seem to attract more attention than our regular catalog pages.”
Educational supplies mailer J.L. Hammett Co. plans to send more of its smaller specialty catalogs to prospects next year than it has in the past, rather than hitting all prospects with its 800-page-plus core book. “Our long-term hope is to cut back the big book,” says director of marketing Dave Merigold. “We’ve created four specialty catalogs – art, office furniture, classroom furniture [including sporting goods], and early-learning equipment – during the past year so that we could be more targeted in our prospecting approach. This way, prospects don’t have to wade through the big book, and we are able to cut our catalog costs somewhat.”