Catalogers Struggle to Make Mail Plans
"My clients' plans are generally flat [compared] to last year, and across the board it seems like it's flat," said Susan Giampietro, senior client management director of the brokerage division at ClientLogic Specialists Marketing Services, Weehawken, NJ. She works mainly with consumer catalogers. "In terms of response, things are a little on the soft side, but I think mailers are making their plans. I only have one client that is not making plan right now, but it has been a struggle to make plan."
From a list management perspective, one executive said things were status quo.
"Consumer [list rental] is steady," said Fran Golub, senior vice president of list management at Walter Karl, Pearl River, NY, a Donnelley Marketing and infoUSA company. "I don't see huge increases. If anything, it's flat to slightly up." But she noted a surge in e-mail and postal list rentals for corporate gift offers.
And despite the Nov. 14 passage of rate increases by the U.S. Postal Service Board of Governors, mailers have not added circulation to beat the increase. Postal rates and fees rise an average of 5.4 percent Jan. 8.
"Mailers knew the postal rate increase was coming, but I did not see -- as I had in years past -- a surge in mailing before the increase," Giampietro said. "I think that is indicative of the times right now and the economic condition of everyone's businesses."
That seems to be the case from the management side, too.
"No, I haven't seen any circulation increases to beat the postal rate increase," Golub said. "Unfortunately, I haven't seen any huge orders coming in."
Another consumer catalog professional said that though circulation for his clients was up a tiny amount, mailers were hoping for better sales than last year but haven't quite gotten there yet.
"I think most of our clients had their sales expectations up from last year," said Bill LaPierre, vice president of catalog brokerage at Millard Group Inc., Peterborough, NH. "What we're hearing is that many clients are performing at about last year's sales levels."
Weather has been a large part of the problem.
"At least in the apparel market, when the weather did finally get a little cold, sales increased, but the weather warmed up again," Giampietro said. "There was a very clear trend: When it got cool, sales went up."
LaPierre agreed, saying that early October sales were strong for many catalogers but did not continue through the month.
"We've been hearing that quite a few clients have experienced soft sales, and we think it's largely [because of] the abnormally warm weather that has affected most of the country for the last couple of weeks," he said. "An awful lot of our clients would like to see a good chunk of the Northeast and the Northern Plains states get cold and have some snow. No one is buying sweaters with record heat."
Another trend that list companies are tracking this season is the increased use of incentives to get consumers buying.
"Five or 10 years ago, if you hit that sort of a skid, there wasn't much you could do about it other than maybe try to do some additional upsell on the phone," LaPierre said. "Now a number of marketers are putting free shipping offers onto their Web sites and into their e-mail marketing."
Giampietro cited the highly publicized free shipping offer from L.L. Bean, which never has been big on incentives, as clear evidence of the trend.
"They aren't my client, but L.L. Bean never used to offer anything, and now they are offering free shipping," she said. "If they're doing it, it's got to mean something. If you're not incentivizing the customer, it's very, very difficult to get new ones and keep the ones you have. Customers who are used to buying direct are trained to look for these offers."
Typical incentives include free shipping, dollars off orders of certain amounts and percentages off.
LaPierre attributed some of the softness to a lack of product innovation.
"There's not a whole lot of what I would consider to be new or exciting product out there," he said. "It's really just a regurgitation of what everybody else has had."
Of course, mailers and list professionals alike look forward to the holiday shopping push after Thanksgiving and well into December, thanks to the Internet.
"Once Thanksgiving passes, that's when you start to see sales picking up, and by mid-December that's when orders are really coming in," Giampietro said. "With free shipping and express shipping on the Web, everybody is just coming in later and later."
Some of ClientLogic's clients have started mailing a little later because they want to hit people when they are ready to buy and not too early.
Based on matchbacks that mailers do to assess the percentage allocation of catalog sales on the Web, Giampietro said the average seems to be 35 percent to 40 percent.
"Those numbers are growing," she said. "If you talked to us a year or two ago, we probably would have said 25-30 percent, and it will likely be higher next year."
Though LaPierre agreed that an uptick would happen in December, he estimated that as of early last week his clients already had 40 percent to 50 percent of their holiday sales.
Kristen Bremner covers list news, insert media, privacy and fundraising for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters