Sizing Up Fall Circ

Strong spring sales, the absence of a presidential election, and the looming postal hike for early 2006 are encouraging catalogers to increase their fall circulation. “Catalogers are feeling fairly optimistic because results in general have been pretty good so far this year,” reports Bethany Beach, DE-based catalog consultant Steve Lett.

And whereas during the past few years the focus was on reactivation rather than prospecting, this year more mailers are intent on adding customers to their house files.

Estee Marketing Group, for instance, has seen a 25% increase in fall list orders and order sizes compared with last year, says Geoff Batrouney, executive vice president of the New Rochelle, NY-based list services firm. “Business conditions are good, as evidenced by the number of catalog companies sold in the past three months. Those buyers are wanting to ensure each investment with more mailings.”

But merchants aren’t relying solely on list rentals to grow their files. In fact, for some companies, rented lists account for the smallest portion of their prospecting efforts.

Medford, OR-based Musician’s Friend is a case in point. A division of Westlake Village, CA-based retailer Guitar Center, the direct marketer of musical equipment will increase its November circulation by 15%, split evenly between prospects and buyers. Then in December, Musician’s Friend will increase mailings to its house file another 5%, says senior director of marketing Michael Eisenberg.

Eisenberg says that finding effective lists is difficult, given Guitar Center’s niche market: “If [prospects are] not musicians involved in the recording or stage aspects of the industry, they can match up demographically right down the line but won’t be buyers.”

So instead, Musician’s Friend will continue to concentrate its prospecting efforts on the Internet, specifically via online affiliates and search engines. Secondarily, it prospects through space ads in industry magazines such as Guitar Player, and Electronic Musician. “In all, magazines drive approximately 20% of our prospecting program,” Eisenberg says. About 14% of new names come from mailings, and the rest come from the Web.

Make room for co-ops

Musician’s Friend is somewhat unusual in that cooperative databases don’t play a significant part in its circulation strategy.

Estee Marketing’s Batrouney estimates that names from co-ops account for 50% of catalogers’ prospecting efforts, up from about 40% two years ago. “The trend is for the database alliance companies to design and develop models based on SKU-level information, which results in more-powerful, moreproductive, and less wasteful mailings,” he says. And names from the co-op databases tend to cost less than those from traditional rented lists, he adds. Co-op names typically run $90/M-$100/M, compared with $130/M for a rented response list.

According to Chris McDonald, executive vice president/general manager for the data division of New York-based marketing services provider DoubleClick, mailers are pulling 10%-15% more prospect names from the firm’s 1,800-member Abacus Alliance co-op this year than they had last year.

Upscale toys merchant FAO Schwarz, for one, will be using co-op databases alongside list rentals, says Kim Richmond, executive vice president of marketing. “Since we are always looking for new households with children, we use a combination of rental lists as well as the co-op databases like Abacus and I-Behavior,” she explains. New York-based FAO Schwarz intends to increase circulation and prospecting this fall and holiday season, though Richmond won’t cite specifics.

The company, which operates stores in New York and Las Vegas as well as a direct division, will also test mailing catalogs and sending e-mail messages to retail buyers. “Since the majority of our visitors are tourists,” Richmond says, “it represents a tremendous opportunity to acquire a customer in one of our stores, and then retain them via our direct channels.”

The co-op databases are a significant part of Woolrich’s prospecting efforts. The Woolrich, PA-based apparel manufacturer/marketer has used co-ops since launching its direct-to-consumer division four years ago.

“We’ve been able to work really well with the databases to model the rentals that yield a pretty good response rate for us,” says catalog and Internet manager Mark DiMarzio. Woolrich plans to increase circulation by “double digits” for its fall/holiday catalog, of which prospecting will also increase by double digits.

In addition to working with the co-ops and renting lists, Woolrich started prospecting online this year, via affiliate marketing, pay-per-click advertising, and banner ads. “It’s paying off quite well for us,” DiMarzio says, adding that the company saw a return on investment almost instantly.

Small companies, big increases

New York-based gifts merchant Uncommon Goods is not only increasing circulation of its holiday catalog by more than 25%, it’s also adding a fall catalog to its lineup, which includes spring, summer, and holiday editions. The fall book will mail in July primarily to house file names. The goal, says marketing coordinator Brett Couric, is to help smooth out the sales cycle and encourage some holiday shoppers to buy earlier in the season as well as to boost overall sales for the four-year-old cataloger/retailer.

The holiday edition will drop four times throughout October and November, just as last year’s had. The later drops perform better, Couric says, “but from the operational perspective, it’s best to link them to the season” and drop holiday catalogs in October. Uncommon Goods has not yet determined the exact mix of how much of the increase will be prospecting vs. house file names, nor has it finalized its prospecting plan.

An even younger company, San Rafael, CA-based Viva Terra, is readying an even larger circulation hike. The cataloger of environmentally friendly home products will nearly double its fall circulation from the 250,000 copies it mailed of its October launch issue. In addition to mailing two drops of a fall/holiday catalog in July, says partner Bob Perkowitz, it will mail a holiday edition in October, November, and December drops. About 90% of the catalogs will be mailed to prospects, gathered from catalog lists, nonprofit lists, and co-op database Abacus.

Meanwhile, Shafter, CA-based Insect Lore plans to roughly triple its fall/holiday circ to 300,000-350,000 copies, says marketing director John White. The seller of insect paraphernalia doesn’t plan on renting names, though: Its new names come primarily through word of mouth, contests at trade shows, referrals from stores that carry its products, and online visitors.

New York-based Garrett Wade Co. is increasing fall/holiday circulation 20%-30%, reports vice president Craig Winer. Prospecting will account for most of the $10 million woodworking tools cataloger’s circ increase, he says, with co-op databases and rented lists supplying the names.

Even catalogers that don’t count fall/holiday as their primary season plan to boost circ. Though its fall season runs secondary to spring, Boca Raton, FL-based women’s apparel mailer Boston Proper plans on increasing fall circulation about 5%, split evenly between customers and prospects, says chief financial officer Ken Fischer. For spring, Boston Proper has boosted circulation 17%.

“We’re generally less aggressive in the fall, but if we see productivity and strength early in the fall season, we might boost circulation above the 5% level,” Fischer says.

Keeping prospecting to a minimum

Having suffered a 22% jump in its catalog paper costs during the past 12 months, Streetsboro, OH-based Creative Irish Gifts is proceeding cautiously. In addition to testing a lighter-weight paper for fall, the cataloger hopes to keep costs down by keeping prospecting to a minimum, says vice president Rob O’Connor.

Creative Irish Gifts will increase circulation, but only by about 5%, and most of that will go to its house file by way of reactivation. As for the rest, thanks to its new list broker, Greenwich, CT-based Direct Media, the mailer is testing names from Catholic Digest, six-month donors from Salesian Missions, and Irish credit-card buyers from Federated Department Stores.

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