SIZING UP YOUR CATALOG

Jul 01, 2005 9:30 PM  By

With the volatility of the paper market (see “Labor woes push groundwood prices up, page 24) and postal costs expected to increase during the next two years, many catalogers are on the hunt for ways to save money. Tinkering with trim size — shaving an eighth of an inch from the width, perhaps, or a quarter of an inch from the height — can slim down your paper and postage expenses.

At the same time, other merchants want to take advantage of an uptick in business and consumer spending by enlarging their catalogs. Expanding from a slim-jim to 7-1/2″ × 10″ size, for instance, can give your brand a more upscale appearance and serve as the cornerstone of a new marketing strategy.

Before making any changes, however, you must consider whether your book is a good candidate for such alterations, whether the new size will make a difference to the bottom line, and how a change might affect response.

RESIZED EQUALS RECOUPED Beverly, MA-based women’s apparel cataloger/retailer Appleseed’s was able to save $180,000 during its fiscal year 2004 by taking an eighth of an inch off the width of its book during spring 2003, says director of print production Maura Lyons. The company, which printed 27 million catalogs during fiscal 2004 (as opposed to 31 million this year), did not experience a decrease in response after making the change. Generally speaking, says Lyons, consumers don’t seem to register changes of less than an inch in trim size.

But the catalog’s merchants were initially loath to part with that eighth of an inch. “I went into a meeting with them, took our regular books [with the old trim size of 7-3/4" × 10"] and took the same book with an eighth of an inch trimmed off the width, and said, ‘This is what will save us $180,000 a year.’” After the demonstration of how such a slight change could save the company so much money, they were sold, she says.

For Appleseed’s, the savings came not just from the use of less paper but also because the smaller catalog weighed less, resulting in reduced postage costs. Postage accounts for more than half of a catalog company’s production costs, says Janie Downey, president of Cumberland, ME-based production consultancy PublishExperts. Paper accounts for another 30%, with printing making up the rest of a cataloger’s expenses. If shaving the trim size of your catalog reduces its weight to 3.3 oz. or less, the book can become eligible for the U.S. Postal Service’s cheaper flat-piece rate.

ON A ROLL Since not all mills make the paper you desire in the roll size that suits your trim, changing the book’s dimensions slightly sometimes means the ability to switch to a cheaper paper stock, which in turn results in further savings. Charlottesville, VA-based consumer electronics merchant Crutchfield Corp. was able to switch to a lighter basis weight after changing its trim size from 8″ × 10-1/2″ to 8″ × 10-1/4″ seven years ago, says director of customer acquisition Michele Rick. The company had wanted to use 30-lb. coated #5 Advocate from Stamford, CT-based International Paper Co. and ConsoPress from Wisconsin Rapids, WI-based Stora Enso North America. For the trim size Crutchfield requested, however, only rolls of 32-lb. paper were available.

The lighter basis weight meant Crutchfield could add 12 additional selling pages to its catalog for the same amount of money it had paid for producing the book prior to the trim size reduction. “While we used it [the money saved] to add pages, other companies can use it to add savings to the bottom line,” says Rick.

GOING BIGGER When the roll size in the paper type you need doesn’t exist, another way to get more for your money is to increase your trim size. “Since you’re just cutting and throwing away the paper, you might want to go up a size to use the paper you’re already buying,” says Appleseed’s Lyons — so long as the larger size doesn’t bump up your postage costs dramatically.

Opting for a larger trim size can also better serve a company’s marketing needs, says John Gibbens, president of Eugene, OR-based design and marketing consultancy G2 Catalog Design. Business-to-business merchants, for instance, can benefit from a trim size larger than the standard 8-1/2″ × 11″ to better distinguish themselves from competitors. Upping the size from standard to, say, 9″ × 12″, for instance, could turn your book into a standout piece.

But, of course, it will cost you. “Just that little bit of a trim increase could increase the cost of your print job by 10%-25%,” Gibbens says.

And just as slicing your trim size can save you postage, adding to it can mean larger postal fees. Slight increases, though, shouldn’t be a problem, says Gibbens, if your catalog is no more than 32 pages and doesn’t use an exceptionally heavy stock.

A 32-page catalog with a trim size that was increased from 8-1/2″ × 11″ to 9″ × 11-1/2″, for instance, would most likely not see increased postal costs — but a 48-page catalog making that same trim increase probably would, since an 8-1/2″ × 11″ book with 48 pages is typically just at the 3.3 oz. mark.

If you’re wondering whether you can increase your trim size without incurring additional postal costs, have your printer calculate the prospective postage for you. “Printers are very good at calculating piece rates,” Gibbens says, “so run a hypothetical for them to calculate the weight for you, and let you know before get into a print job.”

CHANGING WITHOUT CHANGING BRAND A change will often do you good, but companies need to consider how they can make the transition to the new trim size as painless as possible. “Because trim size is part of brand, it’s something you really want to look at and test,” PublishExperts’ Downey emphasizes.

You probably don’t need to produce two sizes of catalogs for an A/B-split test if you’re changing the trim size by no more than an inch, she says, but you should test prior to rolling out a more drastic change, such as going from digest to full-size.

“If you’re going to a full-size book, you’ll have a whole different look, going from three items on a page to five,” Downey points out. A change that dramatic should be tested because there’s a chance that some of your customers might not even recognize the new book.

When testing, be sure to mail both versions to proven buyers, says Ellen Hurwitch, vice president, print production and procurement for New York-based marketing consultancy MRM Partners Worldwide, a division of McCann Erickson Advertising. That way, she says, you’ll be assured that any change in response is due to the trim size and not the products, which these buyers have a record of responding to.

“You want to know whether size affects the purchase of products by people who would have purchased anyway,” Hurwitch says. “I wouldn’t start with prospects, because you have no point of reference. You don’t know whether they’re not buying because of the product or the trim size.”

It also might be worth testing a different trim size again if it’s been more than a few years since the last test of its kind, says Downey. New press equipment may have been introduced since the last time you tried a different trim size, or your mill may now be able to offer rolls of the paper you favor in the trim you desire.

“Some people will say that they tested a different trim size, and it didn’t work, but they say it didn’t work five years ago,” Downey says. “They have to test it again.”

To reduce the likelihood that shoppers will turn away from the new look, Gibbens recommends making big trim changes in incremental stages. He says that acclimating customers to the catalog’s new look is akin to implementing other marketing changes such as a modified corporate logo. A catalog that mails quarterly, for instance, might produce a book that is midway between a slim-jim and full-size catalog for one mailing to serve as a transition. A catalog that mails more frequently, such as every five or six weeks, would run slightly smaller (or larger, depending on the change being made) books over the course of a few drops.

Trimming well on press

To make sure you’re getting the most out of the paper you’ve purchased, Janie Downey, president of Cumberland, ME-based production consultancy PublishExperts, says to ask your printer how well your catalogs are trimming on press. In other words, you need to understand how well the size sheets you print on fit the printing company’s presses.

Most often, catalogers printing on web offset presses will want to aim for a length of 10-1/2″. That’s because when two catalogs of this length are stacked one on top of the other, they add up to 21″, the approximate size of the metal plate on an offset press that the catalogs to be printed are placed on.

It is harder to predict the most efficient trim size for those printing on a gravure press because those machines use cylinders instead of metal plates, and these cylinders can differ widely in size.

Regardless of the type of press your book is printed on, keeping an open dialogue with your printer is essential. Downey says that unless a cataloger specifically asks, many printing companies will not think to point out to the client how much better its catalog would fit on the presses if the trim size were altered slightly. “Some printers will figure you know what you’re doing and won’t question you because you’re the customer,” Downey explains.

“The goal,” she continues, “is to fit as much on the [press's] space as possible. The press is going to run whether it’s fitting or not.”

All new press equipment is designed to accommodate paper sheets with a length of 10-1/2″. But Downey says there are still presses in use that can efficiently handle other trim lengths.

For example, one of her clients recently found help for its 10″ trim size with Sussex, WI-based printing company Quad/Graphics, which happened to have a press that could easily print up sheets with a 10″ length. “People should be talking to their printer about this all the time,” says Downey.
MW

QUARTERLY PAPER UPDATE

Labor woes push up groundwood prices

The continuing strike at Helsinki-based UPM-Kymmene Group’s lightweight coated paper mill in Miramichi, Canada, isn’t the only labor action to cause paper prices to rise again this year. On May 18, talks between the Finnish Paperworkers’ Union and the Finnish Forest Industries Federation (FFIF), representing mill employers such as Stora Enso and UPM, stalled. The FFIF reacted by implementing a lockout on May 18, which as of early June was expected to remain in place at least through June 29.

According to Bedford, MA-based forest industry research group RISI, Finland accounts for 22% of the North American and European capacity for coated groundwood and 14% of the capacity for coated freesheet. The Miramichi strike has already taken out about 7% of the North American supply for coated groundwood.

So although demand has not increased, a number of North American mills in early June announced price increases for coated groundwood that were to go into effect July 1. The hikes call for an increase of $1.75/hundredweight (cwt) for coated groundwood grades with basis weights of 36 lbs. and lighter, and an increase of $2.25/cwt for heavier coated groundwood grades.

Michael Wade, director of sales and marketing for Deerfield, IL-based paper distributor Wade Paper Corp., expects the increases to stick. “I think North American mills are going to have no problem pushing through recent increases on groundwood,” he says. “Pretty much all the major groundwood mills have announced increases.”

And if the Finnish labor problem isn’t resolved by the end of the summer, there’s a good chance that prices for groundwood grades will rise again, says Doug Steinberg, president of New City, NY-based print production consultancy Graphic Search: “If the strike is prolonged, there may be another increase in October. Since historically catalogers gear up in the third and fourth quarters, mills could make a strong case for raising price points again.”

Gary Davis, executive vice president/general manager of Miami-based printing company St. Ives Avanti, says that demand doesn’t have to be any greater than it was last year for a fall price increase to go into effect. “Since the economy seems to be generally okay, we’ll be looking at a fairly typical retail season,” Davis says. “If the labor actions are still going on, then the availability of paper manufacturing may be less than it was last year. So whether demand is up or even the same as last year, there will be less supply, and so more price pressure.”

Medfield, MA-based Support Plus isn’t taking any chances. The foot-care products provider is budgeting for an October price increase of $3/cwt on the coated groundwood #5 sheets it uses for its cover and inside pages, says marketing director Jake Hall. He says he’s following the advice of Support Plus’s printer, Menasha, WI-based Banta Corp., from which it also buys paper.

The cataloger is looking at ways to offset the added paper costs, such as comailing with other catalogers the 6 million books it mails seven times a year. And if the paper market doesn’t stabilize by January, Hall says, Support Plus may consider reducing circulation.

As well as prices, lead times for coated groundwood grades have increased. Steinberg says they are four weeks longer than they were a year ago, and companies purchasing paper that needs to be shipped from Europe now have to order as much as three months in advance.

“There’s a possibility of companies not getting their full shipments of groundwood,” Wade adds, “so I would recommend that catalogers confirm with their suppliers what exactly they have allocated for them.”

Faint rays of sunshine

Coated freesheet hasn’t been as hard-hit by the labor actions. Even the across-the-board $3/cwt increase announced in April is not in danger of sticking. “The mills are struggling to keep prices up. They’re still fighting to keep the April price increase intact,” says Wade. “I would highly doubt another coated freesheet price increase will take place” this year.

And even for coated groundwood, pricing will most likely stabilize, if not come down a little, in 2006, says Steinberg. Since the increases this spring and summer have come as a result of strikes and lockouts, he explains, the current shortage of groundwood is a matter of “false demand.” Once the labor issues are resolved, prices should come down.

Steinberg points out that between May 31, 2004, and June 1, 2005, there have been four groundwood price hikes totaling a 25%-30% increase in price from the previous 12-month period, a trend that cannot continue without sharp demand. “The demand factors are not there. Ad pages are down, and no one sees any reason to estimate that demand will grow by significant rates,” Steinberg says. “There will be a combination of static or stable pricing, with some mills rolling back some of the increases of 2005, trying to level off prices. I predict that either prices will be flat, or more probably, prices will go down when the strike issues are resolved.”

Port Huron, MI-based needlework supplies cataloger Mary Maxim expects its paper prices to remain steady. At the beginning of the year it absorbed a 16% increase on the price of the 35-lb. supercalendered-A paper it uses, notes president Rusty McPhedrain.

But even if prices rise again, McPhedrain says the company will most likely not switch to a cheaper grade. “We’ve tested lower-weight papers,” he says, “and they don’t run as well, so we’re pretty much just observing [the market] right now. That’s all we can do.”
MW

Same size, different look

Say you want to change the look of your catalog but changing trim size isn’t an option — because you can’t afford to increase it, for instance, or you can’t decrease it without having your paper purchasing adversely affected. John Gibbens, president of Eugene, OR-based design and marketing consultancy G2 Catalog Design, advises considering a change in orientation, rotating the dimensions of the book by 90 degrees so that the binding occurs along the short, rather than the long, end. Because most catalogs are bound along the long end, creating a “portrait” orientation, rotating the dimensions into a “landscape” view makes the book stand out from other catalogs in the consumer’s mailbox.

“It doesn’t cost much more,” says Gibbens of making this change. He says that the printers that have suggested such an alteration to him, such as Salem, OR-based Lynx Group, charge only “a few hundred dollars” to reconfigure the press’s folding mechanism, that part of the machinery that folds the catalog into its final shape for binding. “Now you have a unique catalog with almost no additional cost,” he points out.

The one problem with altering orientation, however, is the challenge of finding a printing company with the capability, says John Patneau, executive vice president of Montreal-based printing company Quebecor World. “We’ve got some [printing press machinery] capable of producing that size, but for the most part our presses and binders are set up more to produce the standard format,” says Patneau, who points out that in the past five years only a few catalogs on its presses have been produced with a landscape orientation. “It’s a matter of the equipment that’s available,” he explains. “There are limited assets available to produce it.”
MW