Catalogers’ Profits Are Being Squeezed. Part 1 of 2

A look at the circ trends for the first quarter of 2008 shows a shift toward deeper housefile penetration at the expense of new customer acquisition. “Circulation volume has decreased 7 percent in Q1 2008 compared to Q1 2007 with volume cuts in prospecting,” the Abacus report states. The report points outs that a decline in prospecting will inevitably lead to a shrinking house buyer file, thus making it harder for catalogs to achieve their annual revenue goals. While this long-term perspective is true — cutting prospecting inevitably slows sales in the long term — catalogers face the immediate issue of declining profits. The relatively small cuts in circ mean profit margins are being squeezed.