Catalogs Withstand Time, Economic Challenges

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From Simplicity to Sears, flipping through the inked pages of a new catalog has been a popular way to shop since the Victorian era. In this age of browsing the Net, e-mail and channel surfing, people still look forward to pulling the latest L.L. Bean catalog from their mailboxes.


Who would have guessed when Gutenberg mass-produced the Bible in the 15th century that print would still be the reigning consumer medium 600 years later?


According to the 2001 study "The Health of Print Media" by Wilkofsky Gruen Associates Inc., New York, print has remained the No. 1 consumer choice by unequivocally adapting to technological change. When television challenged newspapers as the primary source of current information, newspapers and newsmagazines repositioned themselves as the ultimate providers and trustworthy interpreters of the news. Later, the computer age spawned yet another renaissance in the printing industry, creating a new marketplace for manuals, how-to guides, specialty magazines and online shopping.


Information varies as to the exact number of catalogs and catalogers. However, according to the 2000 Graphic Arts Marketing Information Service Report, "The Future of Catalogs," about 10,000 companies produce 14,000 individual catalog titles. Of these, it is estimated that primary catalogers, which conduct commerce exclusively through catalogs, make up 4,275 companies and generate about 6,580 catalogs, almost half of all titles. About 1,900 secondary catalogers -- which conduct commerce through catalogs and retail outlets -- distribute 2,380 titles, representing 17 percent of mailed titles, while business catalogers, at 3,325, mail 5,040 individual titles.


In 1998, the U.S. Postal Service estimated that 14.5 billion catalogs were mailed to consumers and businesses nationwide. The USPS' published projections through 2008 call for a significant increase in each calendar year.


However, the catalog industry has taken its lumps. Given the degree of economic concern, postal increases, tighter budgets and increased Internet usage, many catalogers are decreasing circulation and focusing on their top, secondary and third-level customers.


This means many catalogers are reviewing circulation and prospecting efforts and are honing their databases. They are trying to measure buying trends and increase both purchase frequency and average order size. In other words, they are seeking to get more out of their existing customer base instead of securing incremental sales from new customers.


The demise of the dot-coms has many traditional catalogers refocusing and developing new business plans. The Web has not produced the cost-reducing windfall that many had predicted; in fact, it has proved to be a somewhat expensive lesson in marketing for many catalogers, most of which are building business plans around multichannel marketing.


In addition, increasing costs, especially a significant increase in postage projected for next year, are driving catalogers to revisit lighter basis weight stocks, lesser grade sheets and page circulation reductions.


Postage issues aside, the "power of print" still seems to do its job well. The United States has a time-honored cable industry, a solid home video base, is the birthplace of the Internet and dominates the world market in the film industry, yet Wilkofsky Gruen said American consumers still spent more on print in 2000 -- nearly $52 billion -- than on any other medium.


Catalogers are not concerned about the Internet. At first, catalogers resisted the Internet and e-commerce, but now they are embracing online sales because the institution of multichannel operations has proved effective. Catalogers now see e-commerce as an added sales tool to their print catalogs, not as a substitute.


After much ado about catalogs and catalogers, industry research shows that in the next decade the number of catalogs printed will continue to grow modestly.


The USPS anticipates a surprising 25 percent increase in circulation between 1999 and 2010 based on current mailing patterns, and industry experts speculate that the total number of catalogs circulated will increase by 41 percent from 1999 to 2010, or a compounded rate of 3.5 percent annually.


Whether there is a small or significant increase in circulation, it all boils down to the number of pages. Everyone agrees that page circulation growth appears to be slower than the book circulation growth rate, mostly because of the projected reduction in the number of pages per book by the larger companies.


While the number of pages per book may be down, catalogers anticipate that this will be more than offset by the increase in book circulation over the next eight years.


Conversely, as the subject of catalog trends continues to heat up, you have to wonder: Do consumers really care about any of this as long as they get what they want? And should catalogers worry as long as profits continue to sizzle?


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