Lists and Prospecting: Holiday Prospecting–Ho-Ho-Ho or Ho-Hum?

List brokers contacted in September said that catalogers are prospecting more this holiday season than they had during the past two years — though not much more. And given that during the past two years prospecting was the exception and mailing deeper into house files was the rule, list companies and owners aren’t celebrating just yet.

“This holiday, catalogers are trying to replenish their house files,” says Millard Group president Ben Perez, who reports that the number of orders for outside lists from customers with his firm at least a year have increased “just under 5%. They appear ready to roll the dice a bit, having laid back in the past few years because of the hard economic times.”

Steve Tamke, senior vice president, list brokerage for Mokrynski & Associates, also reports a 4%-5% increase in orders for outside lists from customers that the Hackensack, NJ-based list firm has worked with for at least a year. With house files eroding over the past two-plus years due to a lack of prospecting, “catalogers are trying to prudently increase circulation,” Tamke says. “It’s a real recognition of having to start growing their house files again.”

As Kayle Plotkin, vice president of Danbury, CT-based list firm Statlistics, points out, “I don’t think any mailers are getting aggressive this holiday. But some believe there’s more business to be had. They also believe that ‘we’re in the mailing business; you have to mail to make money, and if you don’t mail, you just die.’”

Not all list firms are reporting even incremental increases. Andy Ostroy, chairman/ CEO of New York-based ALC of New York, reports that while he’s accepting roughly the same number of orders as last fall, the number of names rented is down about 10%. “The overwhelming majority are not prospecting more, due to budget cutbacks and declining response,” Ostroy says.

Hotline files drying up

But in keeping with the decrease in prospecting during the past two years, the number of available hotline names has declined. For example, in May 2000, the Bloomingdale’s Direct (then known as Bloomingdale’s by Mail) masterfile contained 600,000 12-month buyers. This past September the same file had 458,425 12-month buyers. Similarly, in May 2000, the 12-month buyer file for jewelry, home decor, and apparel cataloger Sundance exceeded 220,000. But as of this past August, the file had fewer than 175,000 12-month buyers.

Mike Hayden, senior vice president of Peterborough, NH-based Millard Group, estimates that overall 12-month buyer file counts have dropped 10%-15% during the past two and a half years. Most recently, he adds, the number of three-month buyers has dropped on average 5%-10%, and “in some cases more than that.”

Fran Wollman, vice president of Fasano & Associates’ list brokerage division in Pompano Beach, FL, says that she believes the average number of available hotline buyers is down as much as 20% from three years ago. “Some, such as Victoria’s Secret, are up,” she says. “But the bulk of the industry’s list count numbers are down.”

Wollman’s catalog clients, in fact, are “not only digging deeper into their house files, but also deeper into the co-op databases,” she says, “particularly the newer ones, such as NextAction, Opus, and Prefer Network. The co-ops are less expensive, running $65/M on average compared with $120/M on average for outside rental lists.”

To overcome the lack of available hotline names, Plotkin of Statlistics is advising catalog clients to consider renting the names of 13- to 18-month buyers. She also suggests that catalogers consider renting the names of Internet or retail buyers. “Catalogers can use enhanced retail lists with information like age and mail order buying habits,” Plotkin says.

Proceed with caution

“Going into fall, I’d have said I was cautiously optimistic” over the prospects of a strong holiday sales season for catalogers, says Mokrynski’s Tamke. “But now I am a little less optimistic and would only say I’m hopeful.”

That’s because although catalogers and retailers overall did well in May and June, “we’ve seen a noticeable weakening in demand for catalog apparel and hard goods in July and August,” Tamke says, “which is surprising considering the positive signs in retail sales as well as the positive economic numbers out there.”

Indeed, the National Retail Federation in September reported that based on U.S. Department of Commerce figures, overall retail sales (which include catalog and Internet sales) jumped 5.1% in August over August 2002. The organization also anticipates holiday sales to grow 5.7% from last year.

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