Meeting Today’s Challenges

Charlie Silver has been in the direct marketing and catalog industries for his entire career. But his education was in accounting and finance. His first job upon graduating from Rutgers University in the 1970s was as a budget accountant at Scholastic magazine.

“I liked the analysis part of my job more than the accounting,” Silver recalls of his days at Western Publishing. When Western moved in 1978, Silver took a post at Berkey Photo as a senior financial analyst. Later, he was promoted to marketing manager. “I liked the marketing. It was exciting to me to come up with new ideas and see them tested in the marketplace.”

Silver’s first taste of the catalog business was at Lillian Vernon. After a year and a half, an opportunity presented itself at a start-up catalog: J. Crew. For Silver, it was a pivotal time in his career. “It was a great learning experience. When I got there,” he says, “I was the marketing department.” During the seven years he spent at J. Crew, the catalog’s revenues grew from $4 million to over $200 million.

In the 1990s, Silver worked at Walt Disney Co., and was involved in repositioning its catalog from a $10 million business that was losing money into a $100 million business making 15 percent EBIT. A position at Time Warner’s Music Sound Exchange catalog followed. Later, when Time Inc. consolidated with American Family Publishing and closed the music catalog, Silver bought the assets and sold them to Genesis Direct. He went to Genesis to start the Gift and Collectible business, which included The Music Stand and Command Performance, among others.

In January 2000, Silver joined Bloomingdale’s by Mail as vice president of marketing, his current role. Recently, we spoke about today’s business challenges and how Bloomingdale’s is tackling some of these issues.

How to Grow the Business

Pursuing growth, but keeping costs in check is the biggest challenge for catalogers today, says Silver. “Given a tough retail environment, given the mark up in costs it is difficult to grow the business,” he says. “In the catalog field, costs have continued to go up. Postage and shipping prices continue to rise. This makes cost control in other areas critical.”

At the same time, he says, “More catalogs are competing for a retail dollar that is not growing.” This is somewhat less true for Bloomingdale’s due to its high-end customer base, but it’s still an issue, says Silver, adding that when postage goes up, it goes up for all catalogers. So one of today’s big challenges is prospecting at a reasonable cost. For catalogers, he says, “It’s a very intense time due to the economic pressures.” With so many catalogers facing many of the same business challenges, he urges others to get involved, particularly when it comes to postal issues. Silver is on the Catalog Council Operating Committee, and was chair of the committee from 1998 to 2001.

New Challenges

• Discounters: The proliferation of the discount retail chains is having an impact on the catalog industry. Speaking of the super discounters such as Wal-Mart, Silver says: “They have more square feet of selling space than ever before. And they’re often the best at promotion in their sphere.” Even upscale retailers like Bloomingdale’s get some competition from the discounters, Silver admits. “Sure, the Targets of the world get some of the same customers as us. People today shop at both.” The result of the added competition, says Silver, is that catalog retailers must be more value-conscious. “And for us, it means offering the right product at the right price.”

• The Web: Turning to e-commerce, Silver says that it’s taken a while for catalogers to figure out where the Web fits into their businesses. Catalogers are coming to the realization that the Internet is just another channel for doing business. Look for further integration of Web retailing with catalog selling, predicts Silver.

• Branding: In this highly competitive market, Silver believes branding—and how to make brands relevant—is more important than ever. “I think there’s going to be consolidation in the industry,” Silver cautions. “And the ones that focus on their brands and on forming strategic partnerships will survive.”

Alicia Orr is the editor in chief of Catalog Success magazine.