Economic Outlook: Turning the Corner in Catalog Sales
I think most catalogers are relieved with how the holiday season ended. It appears we have turned the corner.
The first three quarters of 2009 were very difficult. This is my 38th year in the business of catalog marketing and without question, the most difficult one I have ever seen. Cuts in prospecting and more reliance on housefiles have resulted in significant reductions in circulation overall. That means 12-month buyer counts are down. Circulation in 2009 was down 20% to 30% or more. And the reduction is not necessarily from a cut in marginal circulation. Rather, it is from cutting prospecting and a shift to using the housefile more as a way to save money short-term. However, short-term gain can cause long-term pain.
We forecasted flat sales for most of our clients for the holiday season. I am pleased to report that we have met or exceeded those exceptions. Sales and response rates for November and December for most clients were above plan. While the year will not be great for most, the last quarter showed signs of improvement, giving hope.
There was much to be gained in December. The big question is inventory levels. Because catalogers planned very conservatively, many were cut short of having enough inventory to fulfill the demand.
A lot of the demand was generated through promotions and e-mail campaigns. Free and flat shipping attracted many and drove a lot of shoppers to place orders online.
There’s no doubt that 2009 was a difficult year. But I think we can move into 2010 with more optimism than we had six or eight months ago.
Stephen R. Lett ([email protected]) is president of Lett Direct, Inc., a catalog consulting firm.
