JCPenney pioneers postal intelligence

JCPenney’s postal affairs manager Ty Taylor discusses the retailer’s catalog and mail strategy

Q: Can you explain how postal rate increases affect JCPenney’s business?

A: Everyone in the marketing department is looking for budget dollars [across marketing channels], and an increase in postage will affect other buckets, such as radio, TV, newspaper, direct mail and e-mail. If there’s an increase in paper or printing or postage, that affects the others. Postage is such a big bucket that it really can hurt.

Q: You discontinued your two biggest catalogs last year (sent to 9 million customers twice a year and weighing in at more than 2 pounds each). What was the strategy behind the decision?

A: We were the last big book retailer [to produce large catalogs] and they cut those out. In 2010, we will not have those books any more. We’ll conserve some trees and go green. The environmental impact did play into our decision, given the use of paper, ink, binding and glue [to produce them]. Cost was also a big issue. We have some catalogs we produce now with 100% certified recycled paper. We do a lot around green efforts. We also wanted to keep up with the consumer; the big books may not have been as relevant as our specialty catalogs and niche books. Targeted marketing makes more sense now. If you’re interested in things for your home, we won’t send you books with baby products.

Q: How is JCPenney’s mailing strategy expected to change this year?

A: We will probably be flat, if not down a little bit. The economy obviously is a big part of that. With the decline in newspapers and the increase in other buckets, such as printing and paper, while postage didn’t go up, we’re still feeling pain from these other line items. We might mail the same quantity, but we may have to reduce a book by a certain number of pages to break even.

Q: If the postal service were to cut Saturday delivery, how would that affect JCPenney’s strategy?

A: Whatever happens, we’ll have to plan for it, obviously. If it does go into play, we’ve got to look at what we would like to do with that day we won’t have anymore.

Q: You were an early user of the US Postal Service’s Intelligent Mail services, such as its Intelligent Mail Barcode and Intelligent Mail Full Service. What are the advantages to these services?

A: IMB gives us greater visibility of our mail within the US Postal Service’s network. We want to be able to track and trace and pinpoint an issue at a certain postal facility. We can use the IMB to help us track pallets and trays, whatever the container might be. It helps us plan better. For example, if you have a facility flowing mail too fast, we can slow it down. With this tracking, we can plan. We have good visibility on letter mail on the piece itself. We don’t get the same visibility on containers or flats, such as a catalog. As a cataloger, you want visibility on all your mail, especially your catalog. l

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