Reports Document Economic, Catalog Slowdown

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BOSTON -- Two industry trend reports released last week revealed what catalogers already knew: The economy is slowing and consumer catalog spending has declined.

However, the reports also shed light on what other catalogers are doing to reach consumers and which areas executives should focus on.

The Direct Marketing Association released a preliminary preview of its annual State of the Catalog/Interactive Industry Report, while Abacus released its Spring 2001 Catalog Industry Trend Report at the 18th Annual Catalog Conference & Exhibition.

Multichannel was the buzzword at this year's conference, as catalogers seemed to gobble up information on how to make their catalog, Internet and retail divisions work together.

Their interest was evident during a Tuesday afternoon session when direct marketers packed a room to hear a preview of the DMA's report. More than 150 people gathered to hear industry executives debate how the economy, multichannel marketing and the Internet have affected the industry.

The report found that nearly half of all respondents considered themselves multichannel businesses; that the top challenge was rising costs for catalog and package delivery; and that most companies have strategic plans for three years or more.

"It's a much more difficult time," Michael Sherman, president of Fingerhut, said at the start of the conference. Sherman also was a panelist discussing the report. "You have to have a strategic plan, and many companies are realizing just how important those plans are becoming."

George Ittner, president/CEO of Newport News, said it is critical for catalogers to focus more on customer retention than on acquisition, adding that companies should not forget loyal customers who are more likely than prospects to come back.

Abacus' trend report, which tracks consumer catalog spending for its 1,800 Abacus Alliance members, showed that spending declined by 4 percent to 5 percent from 1999 to 2000 but grew 8 percent from 1998 to 2000.

"With the level of depth that [our] report provides, marketers can greatly benefit in terms of making improved strategic decisions that can help elevate the industry," said Brian Rainey, president of Abacus, a division of DoubleClick.

Rainey revealed that the cooling economy has coincided with a boost in online vitamin purchases and that hot categories catalogers could take advantage of are gifts and home décor.

Like the DMA report, Abacus' trend report also showed that catalogers are doing more online. One client reported that 50 percent of its sales come from the Internet, Rainey said. He declined to identify the cataloger.

Abacus' biannual report tracks historical catalog buying behavior and analyzes the growth and decline of catalog categories compared with the previous year, as well as dollar spending and household trends.

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