Editor’s Take: On the Great Postal Disaster of 2007

With the much dreaded postal rate increase taking effect this month, hopefully by now most catalogers have made at least some of the adjustments needed to continue to grow — or at least survive. As we’re in the heart of the industry’s conference season, many have been feasting on scores of postal cost-cutting tips coming from presentations, special emergency sessions and the media.

For our part, after breaking the news on our Web site (www.CatalogSuccess.com) about the Postal Regulatory Commission’s punishing catalog rate increase that was more or less hidden in its rate recommendation to the U.S. Postal Service’s Board of Governors, we doled out several tips articles right off the bat on our site and in our two e-newsletters, Idea Factory and The Corner View. For a quick and easy way to access our coverage, go to www.CatalogSuccess.com/search/category/postal.bsp. Or if you don’t feel like jotting that down, find our Communities department on our homepage, then click on Postal.

Now comes the aftermath. How’s this industry going to thrive when its dominant cost center is going through the roof? Certainly your printers, list reps, consultants, industry associations and media partners like us have laid it all out for you by now. Here’s a brief summary:
■ reduce your paper weight;
■ cut your catalog’s trim-size;
■ rely more heavily on the Web and e-mail;
■ overhaul your address hygiene practices;
■ seek out more co-mailing opportunities;
■ try add-a-name; and
■ re-evaluate your contact strategy.

But whatever you do, don’t reduce circulation, or you’re doomed for failure.

There are plenty of other strategies, and I strongly urge you to keep in close contact with any and all experts you know for further advice. The process of finding a more affordable way to grow is ongoing.

Pros & Cons

For this commentary, I’d like to take both a glass-half-full and a glass-half-empty look at this development.

On the half-full side: Can anything positive come out of this? I’m dating myself, but in the late 1980s, the catalog business, by and large, had become fat and bloated. There were numerous redundant titles out there (remember The Sporting Edge? Inmac?), and many were either just getting by their break-even points or losing money. Then, following the huge postage increases of ’88 and ’91, the industry suffered some rough times. In particular, the undercapitalized, poorly managed catalogers either went out of business or were absorbed by healthier companies that only were interested in their lists.

In the long run, however, the strong that survived grabbed hold of better and more efficient ways to sell by catalog and other channels, using variations of some of the tips listed above. And by the late ’90s, the industry was thriving again. (How much was business booming? Personally, I’ll never forget being part of the 266-page June 1998 issue of the old Catalog Age. The thing must’ve weighed 5 lbs., easily.)

So, one can always hope that the catalog/multichannel business will pull through the tough times ahead as a more viable way of doing business.

On the glass-half-empty side, however, this whole thing stinks, doesn’t it? This business, which has thrived through past postal adversity, certainly doesn’t deserve postage increases running as high as 40 frickin’ percent, due to a seriously flawed postal rate-making system.

Sorry, I’m venting here, but it also seems unfair that publications like ours need to be publishing articles like the one we ran in our January Understanding Postal column by Gene Del Polito (“Spare Your Bottom Line: Convert Your Catalog to Letter-size”). Don’t get me wrong, Gene wrote a great article that addressed postal regulation changes in the postal rate case, and I highly recommend you read it if you haven’t already.

But, where’s the justice here? Do real estate developers impose restrictions on retailers so they suddenly need to drastically alter the physical shape of their stores, or otherwise be subject to doubled rent? Does the price of highway tolls suddenly get doubled, forcing a severe hardship on truckers? No.

Well, it’s always wise to thrive on the half-full side of things, so enough venting; it is what it is. You have your work cut out for you, and we’ll do our best here to continue delivering useful content, both in print and online, that’ll help you emerge from this situation successfully.

Paul Miller, Editor in Chief
(914) 669-8391, pmiller@napco.com