2007 was the year the catalog nearly faced extinction. The newly passed Postal Accountability and Enhancement Act was not yet in force, and the Postal Service used its old powers to levy a crippling price increase on catalog mailers. Within three years some 7,000 catalogs ceased publication and mail volume took a nose-dive from 25 billion pieces a year to under 4 billion. The reason: Catalogers had little to no juice on Capitol Hill.
At yesterday’s annual forum of the American Catalog Mailers Association, which was born out of that troubling time, its chairman cautioned catalogers not to be lulled back to sleep and surrender the foothold they’ve secured on the Hill. “We face a [postal] board of governors inclined to capitulate to increases across all classes of mail. With the Marketplace Fairness Act, we’re outgunned and outfunded by Amazon and Walmart,” GiftTree.com president Martin McClanan (below) told the group. “Look for causes and opportunities to get involved. The industry was asleep in 2007, and it’s incumbent upon us to remain awake, remain vigilant, and the easiest way to do that is to have some engagement [with legislators].”
In another forum session, Robert Webb, SVP marketing of multi-title cataloger Potpourri Group, told how he helped his company secure the industry’s only Negotiated Service Agreement by setting Postal Regulatory Commission accountants straight on the issue of elasticity in direct mail. The PRC, which must approve all NSAs proposed by the Postal Service, was under the impression that the catalog business’s price elasticity of demand (PED) was -0.8. After spending most of a day at the PRC presenting his company’s circulation planning strategy, he convinced them that Potpourri’s PED was in fact -1.4. A PED of -1 or more indicates high elasticity, meaning that price increases will significantly affect demand for a good or service.
“We need to inform [Washington] of the fundamental elasticity of catalogs and how undermining our category of mail will undermine the entire health of the Postal Service,” McClanan said. “I know and you know that the catalog combined with a smart digital or retail strategy is all the more resonant in today’s world. People are busy and they come home and see that printed word on paper and it makes other communications more effective. So, we need to focus on policy makers making mail affordable.”
If they wanted to be heard in the corridors of Congress above the din created by postal unions with 10 times their resources, catalogers needed to find their legs and lose their cynicism, McClanan counseled. “Walking on the hill makes you realize how much power 22-year-old Congressional staffers have, but it also makes you realize that voices are heard,“ he said. “I go in cynical and I come out with my hope renewed that people really are trying to make the right decision on Capitol Hill.”