To get a sense of how 2007 could play out on catalogers’ pocketbooks and growth aspirations, Catalog Success asked a few catalogers what they expect for the coming year.
Catalog Success: How will your implementation of multichannel marketing strategies change this year compared to last?
Tim Kiss, director of enterprise direct marketing, HoneyBaked Ham: We’d like to test dual channel offers. Most of our catalog and Web customers buy HoneyBaked as a gift. We’ll test discounts for money off when you buy for your family at one of our stores and send HoneyBaked as a gift.
Phil Minix, president, Astral Direct: Our multichannel strategies probably won’t change at all. We’re a typical, two-channel business: catalog and Web. We’ll still be doing catalogs and outbound e-mail. If we do get a full customer database going, we’d like to better tie our mail file to outbound e-mail campaigns. We’d like to do “look for your catalog in the mail soon” e-mails. Right now, we don’t send those kinds of e-mails because those data sets don’t exist in the same place.
Gary Chinn, president, Garrett Wade Co.: We don’t have the brick-and-mortar channel, but our sense is that people are more used to working on the Web. Our potential initiatives this year include improving our site by making it easier to use and search through — and with more information on it. But these are costly. We know we have to go that way; it’s just a matter of pace.
Catalog Success: How in tune with the shift to multiple channels are your customers, and how significant is that to your business?
Kiss: Many of our customers perceive us as a multichannel company that allows them to provide meals for their families and gifts for their friends and family. Typically though, customers shop for themselves in the retail stores, and shop for others through the catalog and Web.
Our direct business is significantly smaller than our retail business, so this has been a key area of focus for us. We’ve done a lot of work to cross-sell customers, including gift recipient marketing programs, in-store catalog displays, retail blow-ins in catalogs surrounding the store, driving retail customers to the Web, and cross-selling them to send hams as gifts.
Minix: Most of our customers still order by phone; about 20 percent order on the Web. If we’re able to launch new sites for our three catalog brands this year, I hope to increase that to 30 percent.
Chinn: We don’t know. We participate in a Web survey that [list firm] Millard does quarterly that gives us feedback on how people are using the Web site, and how we rank against our competition. I don’t see any big changes there yet. We’ve always done fairly well in that respect.
As to how customers more broadly perceive Garrett Wade, that’s something we’ll be doing specific research on this year.
Catalog Success: How will the postal rate increase affect your budgeting and mailing plans for this year?
Kiss: It’s caused us to rethink our mail plan, but we still feel that it’s important to have catalogs in the mail. We’ve done some comingled mailings over the past several holidays and found them to be a great way to save money and still allow us to mail more effectively.
Minix: It’s going to be a really difficult year for folks who want to maintain or increase profitability. I’ve been with two companies working on budgets for 2007, and there’s no way to make the profit numbers without cutting the circulation. We’ve been over-prospecting for a few years, so we’re going to cut circulation by about 50 percent, which reduces the marketing budget by a similar amount.
Chinn: For us, postage costs are roughly half of the in-the-mail cost of producing the catalog; the rest is printing, prep and paper. This is going to make it more than half. It makes it harder when you look at your RFM cells, because your cost per piece is going to determine how deeply you can mail. We may cut the size of the book in the middle of the year, which is a slower time for us anyway, so we can mail more deeply into our housefile.
How do you feel this year will pan out? What’s your plan? Do you agree or disagree with what these catalogers had to say? E-mail us your thoughts and we’ll publish them in an upcoming issue. Send to email@example.com with “Outlook feedback” in the subject line.