Sector Report: Kids’ Catalogers Assess Their Prospects (and Prospecting)

Dec 01, 2001 10:30 PM  By

The $155 billion youth market is growing. According to a March 2001 report from the U.S. Census Bureau’s Department of Commerce, 72 million students were enrolled in school nationwide in 1999, up more than 1 million students in ’94. Among the 72 million, 33 million students were enrolled in elementary school, compared with 32 million five years earlier. (In both ’99 and ’94, 15 million of the students were enrolled in college).

And the youngsters just keep on coming. According to the U.S. Department of Health and Human Services, more than 4 million people were born in the U.S. last year, up 3% from 1999 — and the highest number of births in this country in more than a decade.

Clearly there’s a market for children’s apparel, furniture, toys, and other merchandise. Catalogers that sell children’s products typically target families by renting lists, running space ads in parenting magazines, and participating in affiliate marketing programs with family-oriented Websites.

“Almost all of our circulation goes to prospects,” says Gerald McKee, president of Harrisburg, PA-based Gifted Child, a cataloger of educational toys and gifts. The company targets largely middle-class and upper-middle-class, college-educated catalog shoppers. To that end, Gifted Child typically seeks out the lists of other catalogers that market to upscale parents and grandparents. “Last year for our Christmas catalog we rented from the Museum of Fine Arts, Boston and Pottery Barn Kids,” McKee says. Gifted Child mailed 200,000 catalogs in 2000, its first year. McKee says he hopes to have mailed 500,000 books by the end of this year.

While prospecting is obviously crucial to the growth of start-ups, it is also essential to even established catalogers of children’s products. Whereas a woman could well be a Talbots customer for all of her adult life, that woman’s daughter will only be able to buy clothing from Talbots Kids for several years. Customer churn is continual and inevitable.

To help children’s products catalogers obtain a maximum of viable prospects, Fran Golub, senior vice president of list management for Pearl River, NY-based list firm Walter Karl, advises looking beyond lists of other children’s catalogers. “We overlay all of our file demographics using Donnelley Market Demographics to find households with the age and gender of the children, as well as how many children are present in the family,” Golub says. “A lot of catalogers may have only a page or two of children’s products in their books, but [parents and gift-givers] are buying those products.”

For example, high-tech gifts marketer Sharper Image has a big toy segment and scooter segment. “One might not think of The Sharper Image as a toy or children’s products cataloger,” Golub says, yet that file has an affluent parent demographic.

Golub estimates the base price for lists targeting buyers of children’s products at $95/M-$110/M. By contrast, she says, the standard base price for list rental is around $75/M. And lists of prenatals, or expecting parents, can cost more than those of young children. “Often women who are pregnant or who have recently had a child are ready to buy everything,” Golub notes.

Doubling their efforts

Although kids’ lists abound and are, says Golub, “always hot,” some niche children’s products catalogers can have a tough time finding files for their target market. Case in point: Dublin, OH-based Twins Help!, a cataloger of apparel and accessories for twins, triplets, and other multiples.

“There are 50,000 sets of twins born each year in this country,” says Twins Help! cofounder John Zimmerman. Thanks to the increased use of fertility drugs, the number of multiple births has risen during the past several years. But that doesn’t make finding those names a simple task.

In fact, Zimmerman says that the names of twins are often deduped from lists before his company can rent them. If twins Jimmy and Johnny Smith are both on a list, often one name is deleted as a suspected nixie and to avoid mailing duplicates to a single address.

To best target its market, Twins Help! often rents lists from organizations for the parents of multiples. “We rely on the National Mothers of Twins Organization and other national clubs,” Zimmerman says, noting that there are more than 400 such organizations throughout the United States. Annual circulation for Twins Help!, which launched in June 1999, is about 225,000, with 90% of the catalogs going to prospects. According to Zimmerman, a typical mailing to such lists generates response rates of 1%-3%.

Magazines ads: Read all about ‘em

While catalogers can also try renting the lists of magazine subscribers with a presence of children in the home, the results can vary. Gifted Child’s McKee, for one, generally shies away from renting the names of magazine subscribers.

“As a start-up, we are interested only in proven catalog buyers,” McKee says, adding that there is no guarantee that a subscriber of a parenting magazine will buy from a children’s products catalog. Down the road he says the company might explore renting lists of subscribers, “but right now we’ve very conscious about going after only proven catalog shoppers.”

Indeed, “Subscription lists don’t work well for us,” says Tracy Schneider, marketing associate for Children’s Wear Digest, a cataloger of kids’ apparel based in Richmond, VA. “We’ve tried them every which way possible, but we can’t seem to generate any sales from them.

Some children’s products catalogers say space ads in parenting magazines are more effective than renting the subscriber lists. “Classified ads are, for us, the most inexpensive form of advertising,” says Twins Help! cofounder Zimmerman. Even so, the cataloger’s response rates from such advertising hover around 0.5%.

“And it’s tricky, because we don’t know how many people visit our Website to request a catalog or shop as a result of the ad,” Zimmerman adds. To try to measure that, Twins Help! offers site visitors a free gift if they tell the company how they found the site.

Orient Expressed, a cataloger/retailer of upscale children’s apparel, eschews list rentals altogether. “We’ve done some exchanges, but they were not very profitable,” says catalog director Mary Malone. This year, the New Orleans-based company started using advertising as a primary method of generating business, not only for its catalog but also for its store. “Just this year we took out several advertisements in the magazine for [women's organization] the Junior League, as well as in regional magazines such as Southern Accents and Coastal Living,” says Malone, who adds that it is too early to determine the effectiveness of the ads. The company has no plans at this time to expand its advertising to include national publications.

Other small catalogers, such as Finleyville, PA-based Lilliput Play Homes, have targeted upscale parents and grandparents with ads in magazines such as Martha Stewart Living, Child, and Parents. But Gifted Child’s McKee says his company has not yet advertised in publications, though he has not ruled out the possibility. “If we did, we would buy ads in publications such as The New Yorker or Harper’s,” McKee says. “The readers of those magazines are typically upscale, educated people who don’t look to the TV to give them ideas about what gifts or toys they want to buy the children in their lives.”

Other methods of acquisition

The high cost of printing and postage has led some marketers to look beyond the traditional prospecting methods. Twins Help!, for one, has had success with monthly postcard mailings. “We can’t afford to send catalogs to all of our prospects,” Zimmerman explains, “but we’ll send a postcard to qualify our leads.” The postcards include the toll-free number and the Website’s URL, so that the prospects can request a catalog or shop online. Zimmerman estimates the cost at $0.30-$0.75 a postcard. Response rates for the cards are about 0.5%.

Orient Expressed sends e-mail promotions featuring contests that reward winners with discounts and other incentives. The company also uses home shows, in the vein of Tupperware parties, to sell its merchandise. “We have trunk shows, in which someone hosts the party in her home, where people can buy our products,” says Malone.

Schneider of Children’s Wear Digest says that e-mail marketing has helped generate business for the catalog. The company sends occasional e-mails to customers who have opted in to receive e-mail communications. “But we have not started prospecting [to other e-mail lists or customers who did not opt in] with e-mail,” she says. The cataloger also began working with affiliate marketing company Commission Junction several months ago, but at press time it was too soon for Schneider to specify Children’s Wear Digest’s programs.

Not all children’s products catalogers make an effort to ferret out households with children as part of their prospecting efforts. “We do not market our Lilly’s Kids catalog any differently from our other titles,” says David Hochberg, spokesperson for multititle gifts and home products cataloger Lillian Vernon. “We are presently not advertising in space ads, co-ops, inserts, or package inserts. Our marketing for our brand is all done through the catalogs themselves, and our secondary advertising involves a Lilly’s Kids page in the SkyMall catalog, in addition to the Lillian Vernon section within that catalog.” Rye, NY-based Lillian Vernon also conducts e-mail marketing campaigns to opt-in customers.

While Hochberg would not disclose the cataloger’s annual circulation or the percentage of catalogs that are mailed to prospects, he says that 15% of Lillian Vernon’s total sales come from the Lilly’s Kids title. All of the Lillian Vernon titles sell some children’s merchandise.

Spinning off into the children’s market

A brand as venerable as the 50-year-old Lillian Vernon may not have to prospect as intensely as a younger company. What’s more, the Lilly’s Kids catalog benefits from sharing a database with the other Lillian Vernon titles. These synergies, along with the size and growth of the children’s market, no doubt explain why, during the past few years, such big-name catalogers as Williams-Sonoma (Pottery Barn Kids), Hanover Direct (Company Kids), and Talbots (Talbots Kids) have branched out into the children’s market.

New York-based apparel cataloger/retailer J. Crew launched its J. Crew Kid catalog this past fall. According to J. Crew spokesperson Karina Sokolovsky, the company tapped its database of buyers, who are typically 22-42 years old, to find prospects. “We focused mainly on finding existing customers with children,” for the launch, she says, rather than seeking outside lists or advertising opportunities.

In fact, you should probably comb your database for buyers with children prior to seriously considering a spin-off in order to determine if your merchandise or brand has an affinity with the children’s market. If you don’t have that information on file, begin to compile it; ask your customers when they order by phone or Internet if they have children, or invest in demographic overlays.

YOUNGSTERS ON THE SCENE

Bombay Kids

Home furnishings retailer The Bombay Co. is using catalogs and the Web to go after the children’s market. The Fort Worth, TX-based company launched Bombaykids.com in August and mailed its first Bombay Kids catalog in September to several hundred thousand rented and house file names. The catalog is also available in Bombay’s 360 U.S. stores. Bombay Kids sells beds, bedding, and accessories for children ages 4-12. The product line, which started at 200 SKUs, and is expanding, has an average price point of around $50, says vice president of marketing Cathy Pringle. The average order is more than $200.

Response to the catalog started slowly, since it launched a week after the Sept. 11 tragedies: “It was too late to pull the book back,” Pringle says. But by mid-October catalog response and site traffic had picked up and were on plan.

To help promote the Website, the company held an online sweepstakes in September, with the grand prize of $3,000 worth of Bombay Kids product. Bombay advertised the sweepstakes on Web portal MSN and on its core site, and with an e-mail campaign to customers that included a coupon for $10 off a purchase of $50 or more.

The company planned to mail a second catalog edition in October, with double the circulation as the first mailing, and more SKUs. Bombay Co. does not plan to sell the kids furnishings in its stores right now, but if the business takes off, the company will explore that option, Pringle says.
Ellen Hansen

SearsRoomforKids.com

In June, Sears Shop at Home Service, the catalog and Internet unit of Hoffman Estates, IL-based Sears, Roebuck and Co., launched SearsRoomforKids.com. The Website is the younger sibling of the two-year-old Room for Kids print catalog.

Both the Website and the catalog sell bedroom furniture, bedding, and accessories for youngsters ages five through late teens. Room themes available include star prints, butterflies, and the Wild West. Selling more than 800 items, the Room for Kids site carries products not available in the catalog or in the stores such as swing sets and inflatable trampolines. A link for the Room for Kids site is available on the company’s core Website (sears.com).

Nicole Westenberger, home fashions manager for Sears Customer Direct, won’t provide specifics about the site’s average order size and initial response, but she says both the catalog and the Website have exceeded expectations. The catalog mailings and e-mail campaigns target women ages 35-50 with children and other households with the presence of children, from the Sears master database of 40 million active credit-card holders.

E-mail campaigns sent throughout the year to a portion of the company’s house file included a coupon for 10% off any Room for Kids purchase. Westenberger won’t release Room for Kids’ circulation, but the company’s annual circulation of its 13 specialty titles is more than 140 million copies in all.
EH

A sample of prenatal and baby lists in the market

AAA EXPECTING AND NEW MOTHERS FILE

Summary: Pregnant women and recent new births

Universe: 4,409,911 names

List owner: ActOneLists.com, 800-228-5478

AFRICA-AMERICAN NEWBORNS AND PRENATALS

Summary: African-American women who have recently given birth or are expecting a child

Hotline: 124,998 names

List owner: ALC of New York, 212-924-1300

E-MOMS

Summary: New or expecting parents who have registered online with various sites to receive coupons, special offers, and educational materials related to births

Universe: 121,000 names

List manager: Partners Marketing, 847-695-5466 ×13

FIT MATERNITY & BEYOND

Summary: Buyers and requestors from catalog companies selling fitness wear, books, and videos for expectant and new mothers

Universe: 27,207 names

List manager: Fasano & Associates, 323-874-4400

GERBER BABIES

Summary: Households with children (selectable by age) who responded to rebates, coupon redemption, premium offers, and promotional tie-ins

Universe: 5.6 million names

List manager: Partners Marketing, 847-695-5466 ×13

HISPANIC NEWBORNS AND PRENATALS

Summary: Hispanic women who recently gave birth or are expecting a child

Universe: 179,992 names

List owner: ALC of New York, 212-924-1300

HUGGIES HAPPY BABIES!

Summary: Promotionally responsive households with children.

Universe: 3,300,000 names

List manager: Partners Marketing, 847-695-5466 ×13

LITTLE TIKES

Summary: Catalog requestors of toys and other products for newborns, infants, and toddlers

Universe: 4.6 million names

List manager: Partners Marketing, 847-695-5466 ×13

NEW PARENTS DATABASE

Summary: Families who are expecting or have recently had a child

Universe: 1.5 million names

List owner: Experian, 800-541-0524

RINGLING BROS. AND BARNUM & BAILEY CHILDREN & FAMILIES

Summary: Parents and grandparents who buy tickets for Feld Entertainment Shows and parents who responded to an offer for a gift certificate good for a newborn’s first visit to the circus

Universe: 4,225,100 names

List owner: Walter Karl, 845-620-0700

Source: SRDS

Total U.S. population ordering by mail, phone, or Internet
Spring 2000
(in millions)
Spring 1999
(in millions)
All: 79.80 77.48
Without children: 46.28 43.78
With children under 2: 5.71 5.24
With children 2-5: 11.28 11.80
With children 6-11: 16.37 16.29
With children 12-17: 15.89 15.34
Source: MediaMark 2001, via the DMA Statistical Fact Book
Percent of household dollars spent per age group on children’s merchandise
AGE 18-25 26-35 36-45 46-55 56-65 66-75 76-100 18-100
% 3.7 10.6 9.0 3.3 2.8 2.0 0.9 5.2
For the 12 months ended May 31.
Source: Abacus, a division of DoubleClick, via the DMA Statistical Fact Book

A sample of children’s lists in the market

AFRICAN-AMERICAN IMAGES/AFRO-AM DISTRIBUTING CO.

Summary: Catalog buyers of toys, games, prints, puzzles, books, teaching aids, and other items related to the African-American experience

Universe: 102,372 names

List manager: George-Mann Associates, 609-443-0397

AMERICA’S BEST — FEMALE SHOPPERS WITH CHILDREN

Summary: Credit-card buyers of dolls, toys, videos, clothing, books, and other items for their children

Universe: 4,097,275 names

List manager: Convenient Name Bank, 215-699-7551

BACK TO BASICS TOYS

Summary: Catalog buyers of children’s toys, games, and hobbies

Universe: 385,953 names

List manager: Catalyst Direct Marketing, 201-405-1414

CATALOG BUYERS OF KIDS’ STUFF

Summary: Database of combined catalog mail order buyers of children’s products

Universe: 10,365,773 names

List manager: ALC of New York, 212-924-1300

FAMILIES WITH CHILDREN

Summary: Families with youngsters that have responded to mail order offers

Universe: 6.5 million names

List manager: Acme List Management, 847-587-1160

FAMILIES WITH KIDS @ E-ADDRESS

Summary: Direct mail buyers who have opted-in to receive children’s offers via e-mail; in addition to being mail order buyers, they have bought online or stated that they will do so in the near future

Universe: 250,000 names

List manager: The elist Xperts, 727-669-2500

HANOVER DIRECT FAMILIES WITH CHILDREN

Summary: Families with children who have purchased from one or more of Hanover Direct’s catalogs.

Universe: 928,750 names

List manager: RMI Direct Marketing, 203-798-0448

HOUSEHOLDS WITH CHILDREN

Summary: Households known to have children

Universe: 17,894,000 names

List owner: Equifax Direct Marketing Solutions, 248-728-7000

PARENTS WHO LOVE TO SHOP BY MAIL

Summary: Parents who use direct mail to buy apparel, toys, and other items for children

Universe: 4,755,000 names

List manager: Media Horizons, 203-857-0770

TOTS TO TEENS

Summary: Parents who have children through the age of 17

Universe: 14,032,000 names

List manager: List Connect, 256-852-0936

Source: SRDS

Parenting and family Websites that may be suitable for advertising or affiliate programs

BabiesOnline.com

This online destination for new and expecting parents has advertising opportunities in its monthly newsletter, which is sent to more than 200,000 subscribers. It also sells banner ads, button ads, and contest sponsorships. Visit BabiesOnline.com for advertising contact information, or send an e-mail to affiliates-join@ls.babiesonline.com.

BabyCenter.com

Part of ParentCenter.com, a Website for expecting and new parents. For information about advertising on BabyCenter.com, contact advertising@babycenter.com or call 203-291-5858.

DadMag.com

An online magazine specifically for fathers. Contact Commission Junction at 805-560-0777 for information about setting up an affiliate program.

ePregnancy, ChefMom.com, and GeoParent

These parenting Websites sell traditional banner advertising, smaller ad button placement, sponsorships, and ads in the sites’ weekly newsletters. For more information, contact ads@myria.com, or call 800-357-9025.

FamilyCorner.com

This online parenting magazine offers banner ad and button programs, newsletters, and sponsorships. For information about advertising, contact advertising@familycorner.com.

ParentsPlace.com

This parenting site is part of Web portal iVillage. For information about advertising, contact the sales department at 212-600-6518.

A sampling of magazines to target for space ads or list rentals

American Baby (sister publication is Healthy Kids): Jeff Christian, 212-204-4052

Compleat Mother: Greg Cryns, 815-678-7531

Exceptional Parent: Anthony Cugini, 201-489-4111

FamilyFun: Mary Beth Wright, 212-635-5939

Mothering: Beth Stephens, 505-984-6295

Parenting (part of The Parenting Group, whose other titles include Family Life and Baby Talk): Ruth Nightengale, TPGADS@parenting.com

Today’s Parent (and Today’s Grandparent, both of which are Canadian): Joe White, 416-596-8675 × 270

Twins: Joel Gregg, 800-328-3211 × 139

Did you miss a previous Market Sector Report?

You can find it — along with other articles from past issues and the latest industry news — on the Catalog Age Website at www.CatalogAgemag.com