THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Sunday, December 3, 1995 TAG: 9512020672
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY LON WAGNER, STAFF WRITER
LENGTH: Medium: 97 lines
Ten thousand mail-order catalogs circulate in the United States, and it probably seems like every one of them found its way into your mailbox in the past two months.
Though mail-order companies will continue to deluge home shoppers during the holiday season, the flow throughout the rest of the year may soon ease. The costs of mailing and printing catalogs have soared, prompting industry watchers to predict a shakeout in the catalog business. But after 10 years of steady growth that might take a lot of shaking.
Mail-order retailers saddled mail carriers with 12.8 billion catalogs in 1994, a 50 percent increase over the 8.7 million mailed in 1983, according to the U.S. Postal Service.
The price of paper will likely slow further increases in mailings. Paper costs rose 50 percent to 60 percent this year, and postage rates for catalogs increased about 15 percent on top of a 40 percent jump in 1991.
This year's increase in paper prices cost Hanover Direct an extra $30 million. Even though Hanover reduced its circulation for the first nine months of the year by 14 percent, the added costs - and disinterested consumers - meant the company's revenues shrank by $14 million.
That doesn't mean mailings will decrease, but they will be more targeted.
Like other industries in the 1990s trying to do ``more with less'' because of work-force cutbacks, the mantra for catalogers this year has been to ``mail smarter,'' said David Hochberg, spokesman for Lillian Vernon, a New York catalog company with a massive distribution center in Virginia Beach.
``If you're a marginal customer and haven't ordered in a while, you're getting a lot less books,'' he said.
Lillian Vernon does 60 percent of its sales from September through December, Hochberg said.
``So Lillian Vernon says, `Why do I need to mail many catalogs early in the year?' and she's right,'' said Kenneth Gassman Jr., a retail analyst with Davenport & Co. in Richmond.
Like Vernon, many mail-order companies do a sizeable chunk of their business during the last three months of the year.
The days of the scattershot approach of mailing a catalog to everyone in a company's database are ending. That's partly due to the new pressures on the industry and partly to the increased accuracy with which databases allow them to target their most likely customers.
Some of the bigger catalogers will continue to solicit in staggering numbers: Spiegel Inc. mailed 235 million copies of its 50 different catalogs; Hanover Direct shipped 377 million; Lillian Vernon sent 179 million copies of its 26 catalogs; Fingerhut shipped 558 million in the form of 154 different catalogs and promotions.
In order to soften the blow of paper price increases, Spiegel reevaluated all its printing contracts, trimmed the size of its catalogs and experimented with using lighter weights of paper, spokeswoman Debbie Koopman said. The Chicago-area company also consolidated three specialty catalogs into one book, which made the catalog big enough to be classified as fourth-class postage, a cheaper category than the third-class stamped on smaller catalogs.
``The problem we have in the catalog industry is barriers to entry are very few,'' Gassman said. ``You and I could start a catalog up next week in our basement.''
Omni Presents, a Norfolk cataloger, is one of the smaller mail-order companies trying to gain a niche in the industry that generated $57.4 billion in sales last year. Omni Presents, with only half a dozen or so employees, takes orders for corporate clients - ``Now'' and ``Later'' silver note clips for $40 - and other specialty requests.
They sent out 1,000 catalogs last year, 3,000 this year and plan to mail 10,000 next year, Chairwoman Clay Barr said.
``We don't send them willy-nilly,'' Barr said. ``We target who we send them to. Our catalogs are very expensive.''
Though the industry will continue to streamline its operations - and some operators will likely go under or be bought out by competitors - the conditions that made the business boom should allow it to keep flourishing.
The main target of Spiegel's catalogs is the ``busy working woman with disposable income,'' Koopman said, and more and more women are working these days. News reports of crime in urban shopping areas and even at suburban malls have also made consumers more likely to stay in the safety of their homes and shop by mail, Hochberg added.
For whatever reason, more than half of the adult population does at least some shopping my mail or phone, according to the Direct Marketing Association in New York.
The proliferation of personal computers have also given mail-order retailers other avenues to solicit orders. Sites on the Internet allow shoppers to call up photographs of items and ``catalogs'' on CD-ROMs and let catalogers avoid paper costs all together.
That's a long way from the first known catalog: shortly after Johann Gutenberg invented moveable type in 1450, a man in Venice began circulating a catalog offering 15 books by Greek and Latin writers. ILLUSTRATION: JIM WALKER photos/The Virginian-Pilot
ABOVE LEFT: Clay Barr, chairwoman of Norfolk cataloger Omni
Presents, says that her company carefully targets its audience.
``Our catalogs are very expensive.'' ABOVE RIGHT: Helen Jane
Friedman checks orders at Omni Presents.
by CNB