Thoughts about 2000

This month’s question

What do you think will be the biggest issue facing small catalogers in the next year?

Competition with bigger companies, rising production costs, and that little bug called Y2K will all be important issues to grapple with in 2000, our group of small catalogers notes. And then there’s the explosive growth of e-commerce. Two of the catalogers we spoke to this month believe that unless they make an effort to serve both their print and online markets, they are at risk of losing customers in the future.

Cynthia Riggs is the president of Making It Big, a Cotati, CA-based cataloger of natural-fiber clothing for large women. Annual sales, $2.5 million; annual circulation, 120,000.

I can’t think of any other issue to start with than the Y2K computer threat. Since we don’t know what will happen with Y2K, it’s hard to get past Jan. 1 in thinking about 2000.

We may experience so many problems that we’ll be scrambling to make heads and tails of it all, or ifwe’re lucky, we will have only minor setbacks depending on our preparedness. I am glad to be a relatively small company, because we started out manually and can revert to manual procedures in a pinch. But I fear that any problems will be out of our hands, and we will have to wait for outside companies and systems to get back on track. I also wonder what will happen if all of our hard work and preparation for Y2K falls flat or doesn’t work, or if the one thing that no one thought of undermines everything else.

Lonny Paul is vice president of digital sales and marketing for World Wide Pet Supply, a Naugatuck, CT-based cataloger/retailer of pet and aquatic supplies. Annual catalog sales, $1.5 million; annual circulation, 25,000.

Print-only catalog companies will be required to reevaluate e-commerce as it takes over a larger percentage of the mail order business. Many consumers still prefer to shop from a print catalog, but e-commerce is expanding. Most mail order companies will be forced to have both a print and an electronic catalog to meet the needs of their markets and not lose any customers.

We developed our Internet site so that we would be better able to quickly make changes to respond to consumer demands. It’s more difficult to meet those demands with a print catalog when you deal with production cycles, print, and mail scheduling.

The flexibility of the Internet also allows us to more easily liquidate stock from our print catalog and gives us the opportunity to feature real-time inventory for our customers. Finding a balance between the print and online businesses should be at the top of catalogers’ to-do lists in 2000.

Jan Creidenberg is vice president of direct to consumer for Three Dog Bakery, a Kansas City, MO-based cataloger/retailer of baked treats for dogs. Annual catalog sales, less than $10 million; annual circulation, less than 500,000.

The most critical issue catalogers will face in 2000 is undoubtedly the need to strike the right balance between the traditional printed catalog and the Internet, and then realizing the synergies between the two media. Catalogers will need to find a way to leverage their traditional catalog to drive more customers to the Website.

Over the long term, catalogers will need to ensure that their printed catalogs are sustainable economically, considering the costs involved in getting a catalog into customers’ mailboxes. Will you be able to justify the investment in a printed catalog in the foreseeable future – say, in a two- to three-year horizon? At the same time, mailers can reach a total universe of customers with their Websites, as opposed to the select markets they reach with their printed books.

Leveraging each medium and finding the synergy to maximize the total return are imperative. You can’t look at the printed catalog or the Website in isolation anymore. You must look at both and address one large target audience.

Kimber Bishop-Yankee is the owner of Inspired By…, a Berkley, MI-based catalog of products to promote positive self-esteem for girls and women. Annual sales, $40,000-$60,000; annual circulation, 5,000-10,000.

Competition with larger, more economically viable companies is a major concern to small catalogers. The amount of money required to develop and maintain a catalog is overwhelming to a start-up. The trend in the print catalog market of large companies with large marketing and advertising budgets edging out the smaller companies is already happening on the Internet, and at a much faster rate. While opportunity does exist for smaller players to succeed on the Internet, the costs to market a Website, while they may be less than mailing a print catalog, can still be high.

Several other issues will continue to seriously concern small catalogers in 2000: standing out among the high volume of catalogs mailed to prospects; budgeting for printing and mailings; offering unique product; creating a presence on the Internet; and securing adequate funding to grow the business.

Eileen Spitainy owns Fairytale Brownies, a Scottsdale, AZ-based catalog of brownies and dessert gift boxes. Annual sales, $2.2 million; annual circulation, 20 0,000.

I think the most critical issue is going to be implementing and maintaining a continual mailing plan, including list maintenance and list hygiene. We’re still a small company, but we’ve got nearly seven years’ worth of names that we need to sort and organize. Right now we’re considering hiring a direct marketing consultant to help us use our house file data as best we can.

But I don’t think there is just one issue that is going to be critical to small catalogers in the upcoming year. Any changes in postal rates, paper costs, or the economy in general will affect the industry. Ultimately, it’s important to have a solid business plan so that you can measure yourself against something. I think the small catalogers need to be aware of what needs to be done in order to meet the goals of their businesses.