Corporate Gift Giving Bolsters Capalbo's Sales

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Businesses are cutting back in many areas, but not in gift spending, judging from early holiday results at Capalbo's Gift Baskets.

So far the cataloger has seen an average order of $314 per account, up from $226.94 per account in the 2001 holiday season. This year's effort has produced an 8 percent response so far based on customers targeted, which is "neck and neck" with last year's pace, said Susan Capalbo, vice president of the Nutley, NJ, cataloger.

Final totals last year were a 16.8 percent response rate per customer targeted and 44.9 percent for "priority" customers.

Capalbo cautioned that more businesses than consumers have placed holiday orders so far, so the average order may drop as consumer orders rise. Still, she expects this year's book to at least match last year's holiday catalog.

"A large portion of our business is corporate, and essentially they can't afford not to give because their customers are used to receiving gifts year after year," she said. "Economizing would not be a great reflection on the company."

The holiday 2002 book had a press run of 190,000, about the same as a year ago, spread among 58,000 consumers and 17,000 businesses from the company's house file.

"The corporates will be mailed to three times because that's the cream of our business," she said.

The first drop went Priority Mail with a price list, discount sheet and order history to 3,500 of the company's best corporate customers.

"That's $3.85 just to put that in the mail in late September and early October," Capalbo said. "At the same time, the remaining corporate customers received their catalogs in an envelope with a letter from us, and also between 40,000 and 50,000 consumers just received a catalog."

Corporate customers received a second catalog in mid-October and will get a third just after Thanksgiving. Another consumer drop of 68,000 takes place soon after Thanksgiving, mainly to the 40,000 to 50,000 who got the first mailing as well as others pulled from deeper within the house file.

The rest of the catalogs will accommodate requesters and another 1,500 corporations targeted as prospects. Prospecting is limited largely because 90 percent of orders come from the New York metropolitan area.

"We deliver to 300 towns in north Jersey and locations in New York with our own vans, and nationwide with UPS," she said. "We can do same-day delivery or next-day with our trucks.

"We don't do much prospecting because, with gift baskets, the sender will not see the gift for the most part. I think most of our customers are coming to us through word of mouth or radio advertising on talk shows [broadcast from New York radio stations].

"From among the corporations that place orders, we have a lot of doctors and lawyers as well as construction, financial services and manufacturing firms who buy for their clients, customers or patients. On the consumer side, they tend to be 35 to 60 years of age and mostly female."

The 32-page format, with a four-page holiday insert, is unchanged from last year. The 65 SKUs have remained constant in recent years with 10 percent of holiday catalog merchandise changing annually. The average price of $50.95 per gift basket also is unchanged.

Large photos of the baskets are the rule as the Italian-Style Treasures page is the only one containing three gift baskets.

The holiday 2002 and spring 2003 catalogs were printed simultaneously to save on costs. They're identical except for the covers, three inside pages and that the spring book will not have the four-page insert or the order form.

During the holidays just over half of orders are taken by phone and just above one-third come via fax, with and mailed-in order forms at 4 percent and 1 percent, respectively.


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