Hanna Anderson Rolls out Second Japanese Book, Worries about Economic Fallout

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PORTLAND, OR - Hannah Anderson rolled out its spring book-the company's second Japanese language catalog -- at the end of January with "pretty good results," manager of international operations Richard O'Donnell said.

He conceded that response was "a little bit under target" but that given the state of the Japanese economy "we are quite pleased. We've heard of some big names that were double digits off their plans."

O'Donnell explained that a children's cataloger was shielded from economic fallout of Japan's current recession by cultural conditioning. "The husband goes first, then the mother and the kids get hit last."

He noted, however, that the mail order business in Japan has changed radically from the years "when business fell into your lap. Today there is no found business."

The Japanese know it too, he added. "The direct marketing industry is beginning to develop lists and a database infrastructure so that we will be able to mail to acceptable lists at acceptable costs. We're not there yet but Japan is moving that way."

Still, lists remain too expensive although some have come down in price. Most, however, are double and quadruple the US price range, give poor segmentation and "are very compiled. So that makes it scary.

"We tried a couple of lists two to three years ago without much success. Everybody did then. I met with some list companies late last year and we're in the process of investigating some of them.

"A few small leads sound promising but we haven't found anything great so far. We believe that publishing in Japanese should boost the responsiveness of Japanese lists in the long run, but the time is not yet.

"My guess is that there is an opportunity for reaching out to the Japanese middle class that has not bought from foreign catalogs or is familiar with credit cards and other western ways, but I think that's still three years off.

"We have to start acting more as if we were in Rome. The Japanese are used to doing things a certain way and we have to take up that challenge. In order to grow we will have to go after that next layer of Japanese consumers.

"This is a transition time. We have to see what our competition is up to. It's hard to get inside our customers so we don't know what they compare us to. Garnet Hill and Cyrilus, the French cataloger, are competition.

"Not serious competition, but our customers do shop them and we don't have customer profiles in Japan the way we do in the US."

Marketing the catalog has changed also, O'Donnell said. "We saw that response from magazines that reported on foreign catalogs was falling off just as the catalog bubble was ending.

"So we shifted our ad dollars away from catalog magazines to lifestyle books geared towards women in their mid-thirties with some discretionary income and they have been more successful.

"We do some credit card marketing that is unique to the Japanese environment where card companies publish monthly magazines for gold card holders that feature ways of spending money using the card."

Card issuers also use statement stuffers with similar content as the magazines with some catalog shopping material in the back "where they have mentioned us."

Prestige, the call center that handles Hannah Anderson customers in Japan, "has a division associated with those credit card companies and they made the introduction for us."

DRTV has not been part of the media mix, although N-tv, a large Tokyo station has featured catalog programs "and we had some minutes on that."

The company has tested one national newspaper but has no plans to try again, even though other catalogers rely heavily on them. "I don't know if we're ready to move into that yet."

But O'Donnell has few illusions about staying protected against economic fall out. "As unemployment goes up or government raises taxes again the climate could become more challenging than it has been.

"That means people would become more reluctant to spend. Some already are spending less. They are worried about the stability of banks. There is flow of money from banks to post office accounts."

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