Q&A: Children’s Wear Digest on Catalog Circulation Cuts and New Web Promotions

In light of the forthcoming postal rate increase, some catalogers, such as children’s apparel merchant Children’s Wear Digest, are cutting catalog circulation and adding Web-exclusive promotions. This enables them to better serve an increasingly multichannel customer base.

Tracy Schneider, vice president of marketing and operations for the Richmond, Va.-based cataloger, explains the rationale behind this decision, as well as a new promotion that shows promise for the company.

Catalog Success: What’s your take on the catalog marketing economic climate?
Tracy Schneider: We’re seeing in our business that the catalog is beginning to take a back seat to the Web site. If we’re just looking at print catalogs, that’s declining. But overall, our business will continue to grow because more people are shopping online. We’re making up for the print decline elsewhere, and I think that trend is happening throughout the industry.

CS: So you’re focusing more efforts on the Web in 2007?
TS: Yes. We cut some catalog circulation this past year, and actually did as well as we had the year before based on sales dollars. Based on that, we’ll continue cutting catalog circulation and saving on printing and postage. We’ll put that budget into things like pay-per-click search and other Web marketing. It’s not as expensive, and we see a good return as well. We’ll probably cut catalog circulation by about 6 percent in the spring and an additional 6 percent in the fall.

CS: Any Web initiatives this year?
TS: We’re planning a new offer this year. We tested it twice this past year. We’re calling it “Vendor of the Month,” a discount on one particular vendor’s merchandise for an entire month. That will only be available through our Web site, and we’ll provide, via e-mail, a promotion code to receive the discount. Each month will be a select vendor, and customers can receive a 10 percent discount on that merchandise. We’ll do that every month this year.

CS: How did you test that in 2006?
TS: In July and November of 2006, we talked to select vendors and worked with one in particular to run the tests. From those results we determined it would work well. Customers responded positively to it, and it helps bring in sales during months that aren’t usually as big for us. It’s a unique program, perhaps unique to our business because we do advertise the vendors that we sell. A lot of other catalogers do their own private labels or keep their various brands equal in customers’ minds.

CS: Will you use unique vendors each month?
TS: We may revisit one or two vendors throughout the course of the year. We do have one vendor, Sarah’s Prints, that does pajamas, and we’ll use that vendor in the spring and fall. But most will be one time only.

CS: Did you negotiate with each vendor for additional discounts?
TS: Our buyers did negotiate individually with each vendor, and the vendors had to agree to be part of the program.

CS: And you’re promoting it via e-mail exclusively?
TS: We have up to this point, but we’re planning to alert our affiliates to the promotion, as well as our pay-per-click search firm. Both groups are aware of the promotion code, so they’ll be using that in their own promotions. But it’s exclusively for the Web. We won’t offer it to customers who call in their orders.

CS: Are you segmenting the e-mails you send for the program?
TS: We do segment our e-mails generally. But for this program, everyone who has an e-mail address will receive this offer. Some offers are for select customers, but this is for everyone. And we have e-mail addresses for about 85 percent of our customers

CS: By what percentage do you expect sales overall to change in the coming year?
TS: We’re hoping for a 5 percent increase. We’re pretty conservative in our estimates.

CS: How in tune are your customers with the multichannel shift?
TS: We have very few customers who shop by catalog only. We have more customers who are Web only shoppers, who still receive the catalog, by the way. We’re getting fewer customers who shop only by phone. Most of the people on our file are multichannel. Whatever happens to be most convenient for them is what they do.