Is Glass Half Full or Half Empty for Bud's Catalog?The good news for Budweiser's fall/holiday book is that people are spending more. The bad news is that fewer people are ordering.
"Given the initial results, we will be below plan on response rate," said Mary Houlihan, director, promotional products group, Anheuser-Busch Inc., St. Louis. "The higher average order amount is helping, but will not make up the difference. But it will definitely reduce the gap."
With two of the four drops for Budweiser's fall/holiday books in the mail, the average order amount is more than $90, up over last year at this time and up 9 percent compared to plan going into the current season. The response rate is below plan.
Overall fall/holiday circulation is flat compared with last year's 1.8 million. The two drops so far, at the end of August and week of Sept. 28, represent about half that total. The Holiday Preview book goes out at the end of the month, and the holiday catalog mails in mid-November.
"It could be the economy or the merchandise mix. Our catalogs have been trending way up this year, so this could be a surprise," Houlihan said. "I don't know if it was the 9/11 anniversary. It could be people delaying gift purchases because a lot of the catalog is gift buying. The catalog is consistent through the mailing cycle, and year over year it's pretty much the same merchandise mix. Sometimes we carry items designed to enhance brand image and not always with a profit motive."
About half of the catalogs will go to prospects, taken from catalogers with similar merchandise. The house file represents buyers ages 35 to 55 and primarily male, though Houlihan said there are many women who buy items for men.
This year's 60-page book is up four pages from last year. The cost per book rose "marginally" despite postal increases and the book's increased size.
"We had a strong year last year, and we wanted to add merchandise to the book," she said. "This year we added more of the hard goods, including neon signs for the home bar and things that Anheuser-Busch uses to market its beer in on-premise accounts like taverns and restaurants. There are more mirrors, bar signs, neon clocks and pool table lamps. They are all doing well.
"These items tend to have higher price points, which has helped drive up the average order amount this year."
The 7 percent increase in page count resulted in a corresponding rise in the SKU total, which is above 300.
"Basically, we repeated what we did from a creative approach and just added some merchandise," she said.
Items celebrating parent company Anheuser-Busch's 150th anniversary are producing impressive sales, as three of the book's top six dollar-volume-producing items so far are in that category. They include the 150th anniversary die-cast trailer ($45), stein ($75) and the collector's hat ($25).
"Last year we had the 125th anniversary of Budweiser," she said. "Recognizing anniversaries is always very good for us."
The company produced nine catalogs last year and will print 10 this year. A Holiday Preview book was not produced last year.
About 30 percent of orders are placed through budshop.com.