Catalog industry gathers to discuss postage increases
CAMBRIDGE, MA - A late afternoon town meeting-style session was called on Thursday to discuss the recently announced postage rate case. Catalogers, printers, list brokers and others openly discussed the many ways they are looking at addressing increases that could be as high as 25 percent.
"This is all pretty scary," said Russ Gaitskill, president of Garnet Hill, who led the meeting. While the increases could be crippling for a company that's not completely established yet and is still in growth mode, there are a lot of steps to explore for mitigating the hit, he said.
Some of the strategies that Garnet Hill is looking at include adjusting the trim size and paper weight of its children's catalog. Adjusting trim size was one strategy that came up repeatedly because it not only saves costs, but may also open a catalog to more co-mailing partners. However, several catalogers expressed concern about switching to a slim jim format because of branding issues.
Co-mailing was another strategy that came up repeatedly. One cataloger mentioned that his company used co-mailing for 70 percent of its circulation last year and expects to achieve 100 percent this year by being flexible in its trim size and mail dates. In other words, the cataloger tells its printer it is willing to print within a certain trim size range and wants to be in-house during a specific range of dates and has the printer find a co-mailing partner.
Fine-tuning merchandising also can help save money, Mr. Gaitskill said. For example, a cataloger could completely remove an entire category from its catalog for certain drops and heavily promote that category on the Web during that period instead.
One person suggested asking customers how they want to be communicated with and developing a long-term strategy based on new contact strategies.
Other strategies mentioned included address hygiene, add-a-name, drop-a-name, improving matchback analyses, using letters for clearance items since the increase isn't as big in this category and eliminating the mail-order form from the catalog.
One strategy Mr. Gaitskill cautioned against was cutting circulation. "It may become an absolute raw necessity for all of us, but it is the beginning of the death spiral," he said, adding that cutting circulation leads to less prospecting and less reactivation.