You don’t need to be a Mensa member to have figured out that last week’s postal rate increase is a pressing concern for catalogers—and for attendees of this year’s Annual Conference for Catalog & Multichannel Merchants (ACCM). In fact, many of those planning to attend no doubt are doing so in part to find ways to minimize the rising postal costs and other media and means of reaching their target market.
As Brad Connor, a sales representative for Menomonee Falls, WI-based printer Arandell Corp., says, “With the rate increase having gone into effect May 14, catalogers would like to know to what extent their options are to mitigate these large increases.”
In an April survey of subscribers, MULTICHANNEL MERCHANT found that the vast majority are indeed considering making creative, production, and marketing changes in response to the rate hikes. Seventy-three percent were looking into catalog creative or production changes, such as reducing page count or changing the paper stock or trim size. Four out of five were considering catalog circulation changes, ranging from cutting overall circ to using more list hygiene and addressability tools. Three-quarters of the respondents are considering increasing their use of e-mail as a marketing tool, while nearly 60% are thinking of increasing their search engine optimization efforts.
“Since postage costs are such a huge component of catalog costs, we are forced to reconsider all of our marketing activities,” says David Kaplan, vice president of marketing for North Wales, PA-based Tafford Uniform. “We will certainly be reducing our mailings of catalogs and are looking to find ways to more efficiently recruit and retain customers through the Internet, e-mail, and other direct channels. It’s ironic that an attempt to increase revenue by the Postal Service will likely lead to an overall reduction in our USPS spending.”
“We’re a small company,” says Wiley Fisher, general manager of Kansas City, MO-based Fiorella’s Jack Stack Barbecue, “so when we get a catalog request, we put a stamp on it and mail it out. We went to the post office Wednesday and the stamp for a catalog rose from 87 cents to $1.14. That’s not a one- or two-cent increase. So that’s my concern now: What do I do with catalog requesters?… I have to train my staff to steer people to the Internet, but not everyone who requests a catalog is going to be Internet savvy.”
In addition to the front end, the postal increases are of course taking a bite out of the back end as well. Of the survey respondents that use USPS for parcel delivery, 46% will be increasing their shipping and handling charges, and another 28% aren’t yet sure.
But raising S&H isn’t a surefire solution to the problem of increased parcel costs: “Will the customer pay increased [shipping and handling] charges because you have to pass the increases along to the customers?” asks Susan Isley, vice president of marketing and inventory management for Ridgefield, CT-based home decor merchant Petals.
More results from MULTICHANNEL MERCHANT’s exclusive postal survey will appear in the June issue of the magazine.