Warm Weather Doesn't Cool Cataloger's Sales
"We're generating better dollars per book than we expected and it's resulted in a low double-digit percentage increase over plan in terms of sales this year based on the holiday catalog performance," said Mark Gallo, senior vice president of marketing at The Territory Ahead, Santa Barbara, CA. "The warm weather back east is normally something that would go against us, but we have a particular strength on the West Coast and in the Rocky Mountains.
"We're seeing improvement over last year on our average order amount, and we're getting a response rate that's comparable to last year. We're basically an exclusively sourced marketer providing unique product that you can't get anywhere else. High-end buyers respond to that."
Gallo described The Territory Ahead's typical customer as age 35-55 with an average household income approaching $100,000.
Despite the soft economy, the company did not hesitate to continue its aggressive mailing plan. A low double-digit percentage increase in recent years has been used to boost circulation among prospects and the company's house file. Overall annual circulation is more than 30 million, with more than half mailed during what the company defines as its fall-holiday season.
Also unchanged is the strategy of dividing the holiday mailing into two drops. This year's first drop went out in mid-October while the second reached recipients toward the end of November. The first drop is slightly larger.
"One of our key goals is acquiring new customers," Gallo said. "We're going after mid- to high-ticket apparel and mid- to high-ticket home catalog buyers. At this time of year we can go a lot deeper into those files and go after 12-month buyers, and we can even go beyond 12-month buyers and look for those who have spent over $100 in their last purchase."
He said 50 to 100 lists were used to obtain prospects.
"We are also able to mail deeper into our house file during the holidays," he said. "We go back and look at customers' purchasing histories over several years during the holidays. We mail to more than half of our house file during this time of year."
Gallo reported no significant changes in the merchandise mix this year, and prices remained stable. The 72 pages is unchanged from last year, and is up from 64 pages produced for the holiday 1999 book. Lower paper costs partially offset higher postage expenses this year.
About 75 percent of catalog sales are generated via the company's toll-free number. The Web site accounts for 20 percent, and the percentage of orders mailed and faxed in is negligible. Web sales have risen 40 percent over last year.