Catalog Marketing Strategy for the New Year

Consumer catalogs performed well this past holiday season. However, it was another "late" buying frenzy and catalogers were aggressive with promotions. Consumers benefited by taking full advantage of free shipping, merchandise discounts and other offers. We did see a shift in business with a greater percentage of revenue falling into December. For example, December accounted for approximately 40 percent of total revenue this holiday season (Sept. 1 through Dec. 31) based on data we compile at Lett Direct.

December represented approximately 25 percent of total annual 2013 revenue. In 2012, for these same catalogs, December accounted for approximately 35 percent of sales for the holiday season. This 5 percent shift in revenue in the month of December is significant considering there was one week less between Thanksgiving and Christmas this past year. September through December accounts for approximately 62 percent of annual sales. According to Bloomberg, total holiday spending was up 3.5 percent compared with the prior year. Online sales increased 10 percent. Consumers spent $42 billion this past holiday season. On Cyber Monday, one-third of total sales were via smartphones or tablets.

While the best marketing strategy for 2014 is to leverage all channels, here are a few print catalog recommendations for the new year:

1. Grow your 12-month buyer file. Continue prospecting and focus on generating repeat purchases from your own customer file. Good sources for file growth are pay per click, search engine optimization and traditional catalog prospecting methods. Growing your 12-month buyer file isn't just about prospecting; it also includes strategies to reactivate "older" buyers and bringing them into the zero to 12-month recency cells.
2. Maximize your housefile. It's difficult to overmail some segments of your housefile. Therefore, consider adding a mailing to at least your top-preforming segments based on RFM (recency, frequency and monetary value).
3. Maximize your page count. Consider adding more pages to your catalog (depending on merchandise availability). Postage is going up, and it already represents at least 50 percent of the total cost to print and mail catalogs. Leverage postage costs, especially if your catalog weighs less than 3.3 ounces (postal piece rate threshold). Sales will increase by approximately one-half the percent increase in page count. For example, if you increase page count 16 percent, revenue should increase by approximately 8 percent.
4. Use promotions. Promotional offers increase the rate of response, especially free or flat shipping. A free shipping offer can increase your "lift" by approximately 20 percent to 25 percent. Plan your promotional strategy to certain segments of your housefile and to prospects by season (spring, summer, fall and holiday).
5. Convert one-time buyers to two-and-more-time customers. Isolate your one-time web-only buyers from PPC, SEO and affiliate programs and develop a repeat purchase strategy. Often these buyers can be "item" purchasers vs. catalog shoppers. You might find that this group of "new" buyers doesn't need to be mailed as frequently.
6. "Flag" holiday 2013 buyers. Use a cooperative database to flag marginal buyers from the holiday season. Suppressing these buyers from a spring/summer mailing can boost overall performance of the buyers who are mailed. This is one way to help manage circulation.

2014 should be a good year for catalogers and online retailers. Paper prices seem stable, but postage costs are going up. One of the best strategies to help offset the increase in postage costs is to increase (certainly not decrease) page count. If your catalog weighs less than 3.3 ounces and mails at the postal piece rate, add pages to leverage postage costs.