Industry Eye: Shop Talk

Understanding Postal: Response Testing and the Total Picture
With all the USPS changes in catalog design rules this year — not to mention those we may see in 2010 — you must test designs and response rates for all catalog mailings. What seems like an expensive design option may be the right choice if it elicits a better response rate than a cheaper design.

Consider how catalog mailers are responding to the USPS rules taking effect in September, which change how slim jims (i.e., small catalogs mailed at automation letter-size prices) can be designed. They include rules about tabbing/sealing, cover stock, paper weight and dimensions.

Catalog mailers are considering whether to redesign small books to meet the new rules or explore other design options. To effectively evaluate design options, look at production and postage costs and, most importantly, the impact on response rates.

Several catalog mailers are moving their booklet-size catalogs into envelopes to avoid the USPS' new requirement to put three tabs on the books. They didn't want to move to full-size catalogs, partly because of production and postage costs, but also because the booklet size is tied to their brand identities and healthy response rates. They experimented with different envelope paper and graphics, and found response rates far outweighed the additional production expenses.

Other slim-jim mailers are moving to full-size catalogs because of the rules. But that's not before testing to determine the impact on response. In many cases, response rates for the full-size catalogs justify the additional costs because response to the three-tabbed, booklet-size catalogs was very low. Those moving to full-size catalogs are mitigating postage costs by co-mailing.

—Kathy J. Siviter, president, Postal Consulting Services (kathys@postal
consulting.com).

Legal Matters: Maryland Bars Resale Price Maintenance
On Oct. 1, a new statute goes into effect in which Maryland will amend its antitrust laws to make all minimum resale price maintenance agreements unlawful.

Maryland's approach is in direct contrast to the 2007 U.S. Supreme Court decision, Leegin Creative Leather Products Inc. v. PSKS Inc., which held that resale price maintenance agreements don't automatically violate federal antitrust laws.

Instead, such arrangements are subject to a "rule of reason." Here, each agreement is separately evaluated to determine whether the pricing restriction's anti-competitive effects outweigh its pro-competitive benefits.

As might be expected, the reaction to Leegin has been mixed. Though most manufacturers welcomed the decision, many retailers and politicians have been highly critical. But proposed federal legislation, the Discount Pricing Consumer Protection Act, would amend the Sherman Act to make minimum resale price maintenance agreements, per se, unlawful. The attorneys general of 35 states have signed on in support of this bill.

So, do manufacturer-imposed minimum resale prices aid or hinder competition? Manufacturers argue that resale price restrictions encourage retailers to invest in advertising and provide after-sale services to consumers, which help manufacturers compete against other companies. They also argue that pricing floors enhance the image of their products and enable them to attract higher-quality dealers.

On the other hand, many online and discount retailers, along with consumer groups, argue that minimum resale price restrictions result in higher costs to consumers and inhibit competition among retailers.

—George S. Isaacson, senior partner, Brann & Isaacson (gisaacson@brannlaw.com).

Catalogs Grab Gold Ink Awards
The 22nd annual Gold Ink Awards, jointly presented by Printing Impressions, Publishing Executive and Book Business (all sister publications of All About ROI) in July, recognized the year's best projects in the printing industry.

This year's big winners include Cole Haan 2009 Spring Catalog, Gold (consumer catalogs, web printing); Emporio Armani Accessories, Gold (consumer catalogs, sheetfed printing); 2009 Pontiac Full Line Catalog, Gold (business catalogs, web printing); and Polytrade Paper Guide 2009, Gold (business catalogs, sheetfed printing). 
For the complete list of winners, go to 
www.goldink.com.