Yes, Holiday 2000 Is Around the Corner

It seems like we just finished dissecting the 1999 holiday season and its impact on cataloging when it’s already time to prepare for the 2000 holiday season.

While almost every company has its fall book in the mail and is finishing last-minute merchandising and marketing on its holiday book, the real work is just beginning – filling the orders and making every customer a happy one.

However, this year the holiday selling season will be like no other. Therefore, it might be wise to review what will happen and what a company should be prepared to face.

The election. It is easy to forget, since it only occurs every four years, the impact of the presidential election on shopping habits. This is especially true if it is a heated race. Even in the best of election years for catalogers, there will be a definite slowdown in sales from about 10 days to 14 days before the election to right after it.

Everyone, especially in forecasting inventory, should be sure to temper his order curves accordingly. If possible, assuming your company is more than 12 years old, revisit your experiences in 1992 and 1988. Because in those two years, the presidential election was more hotly contested than in 1996. The hotter the election, the more consumers’ attention is diverted from shopping to the political contest.

In business-to-business cataloging, the election impact is not as great unless there is a feeling that one of the candidates is so anti-business that his victory would be a real problem, which is not likely this year.

Another possible postelection impact would occur if there were a split between the party that wins the White House and the one that controls Congress.

If there is a shift in control – Bush winning the presidential race and the Democrats winning control of Congress – consumers might be more cautious in spending until they see what will happen in spring 2001. If this happens, then the slowdown in spending might last until January or February.

I am not predicting a total stop in spending, but if the economy has been growing at 4 percent a year, it might slow down to a 3 percent compounded rate.

The challenge is to have enough inventory to cover your orders, but not so much that you have to take major markdowns later.

The Internet. If you’re like many catalogers and were surprised, pleasantly, at the positive impact of e-commerce on the 1999 holiday season, this year will be even more positive, especially for catalogers.

In 1999, many consumers were burned when they tried to buy holiday gifts on the Web from companies that did not have experience in pick-and-pack fulfillment. These were not only the dot-comers, but also established companies such as Toys ‘R’ Us.

However, while consumers had negative experiences and were upset, they still liked many aspects of shopping electronically, such as order confirmation and shipping data.

This year, more consumers have access to the Net than last year, up 20 percent over 1999, from 50 percent of the population to 60 percent. So in addition to those who shopped on the Net last year being more adept at e-commerce, the universe of shoppers is expanding.

Moreover, it seems the negative experiences and the publicity around certain companies will drive consumers to companies with which they have had positive experiences – those that can handle a Web order properly, i.e., catalogs.

How big will e-commerce be for catalogers this holiday?

The respondents to this year’s annual study, The State of the Catalog and Interactive Industry Report, conducted by the Direct Marketing Association and W.A. Dean & Associates, said that in 1999, 5 percent of catalogers’ net sales were from their Web sites. It seems that last year – in the first half of the year – their e-commerce sales were much lower than later on. Thus, 1999 holiday Web sales probably were 10 percent of all holiday sales.

This year, the respondents predicted that more than 10 percent of their annual sales would be from their Web sites. Based on last year’s experience, it is safe to assume that many companies will see holiday e-commerce sales of 15 percent to 18 percent.

Therefore, every company should prepare accordingly, especially with an ability to respond to e-mails rather than phone inquiries on order status.

Preparing your staff. This year, it will be harder than ever for many catalogers to staff for the holidays because of low unemployment nationwide.

Many temporary employees who used to come back every year now are probably employed full time. Thus, the temps hired this year will be unfamiliar with cataloging and the nuances of this channel vs. others. The need to train these new employees will extend beyond their specific function to also understanding cataloging and how they impact the customers’ shopping experience – good or bad.

Many leading catalog companies have taken to regularly bringing in an industry expert in late October and early November to talk to all employees about the upcoming season and their importance to customer satisfaction.

An expert can provide an overview of the state of cataloging, how the consumer thinks and buys, and how that company can make the shopping experience one that keeps customers coming back.

The 2000 holiday season is shaping up to be one of the most exciting that catalogers have ever seen. The impact of the Internet, the election and a strong economy will bring both sales and challenges to ensure that you satisfy your customers. If you are successful, your customers will keep coming back. If not, you’ll never see them again.

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