May 2008 Issue
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Access Technology Solutions Direct Selling Services 34 Randall Decker (801) 420-9225 www.accessts.com Associated Global Systems Fulfillment 62 Sales (516) 627-8910 www.agsystems.com B&W Press Printer/Specialty Mailer 23 Paul Beegan (978) 352-6100 www.bwpress.com Belardi/Ostroy ALC, LLC Lists 22, 39, 60 Andrew Ostroy (212) 924-1300 www.belardiostroy.com BowTie Inc. Lists 6 Kristina Grubb (949) 855-8822 x3420 www.bowtielists.com Brown Printing Printer 41 Jill Tobin (212) 782-7857 www.bpc.com Catalogs America Printing BC Dan Sayin (727) 864-2000 www.catalogsamerica.com Catalyst Direct Marketing Lists 32, 65, 67 Fred Litzky (201) 405-1414 www.catalystdm.com Chilcutt Direct Marketing Lists 52 Jane McCoy (405) 478-7245 www.cdmlist.com Commerce Register Service Bureau 48 Bob Schweighardt (201) 445-3000 www.comreginc.com Creative Automation Direct Marketing 55 Bob Rajan (800) 773-1588 www.cauto.com Cyber City Teleservices Telemarketing Services IBC Erv Magram (201) 487-1616 www.cctll.com Datamann Software 24 Kathy Reagan (802) 295-6600 www.datamann.com Direct Tech Inventory Management 21 Jack Mahaffey (402) 895-2100 www.direct-tech.com DM Transportation Group Transportation Management 56 Bill Wilson (717) 258-0611 www.dmtrans.com DoubleClick Performics Search/Affiliate Marketing 35 Robin Simkins (312) 739-0682 www.performics.com Dydacomp Development Software 8 Rob Coon (973) 237-9419 www.dydacomp.com Edith Roman Associates Lists 3 Kevin Collopy (845) 731-2684 www.edithroman.com Endicia Mailing Software 57 Sales Department (800) 576-3279 www.endicia.com Foster Manufacturing Production Equipment 6 Ted Borowsky (800) 523-4855 www.fostermfg.com Iverson Language Associates Translation
0607_CalProd_Beautiful (MUST USE)
Escheat.” The very word sounds sinister, and for good reason — direct marketers beware! But how do state escheat laws, which are often known as “abandoned property laws,” work? And what risk do they pose to multichannel merchants? Defining ‘Unclaimed Property’ Unclaimed property is a liability that a company owes to an individual or other business that has remained outstanding beyond a specified period of time. Every year, billions of dollars of economic entitlements go unclaimed, including obligations of retailers to their customers and suppliers. Depending on the particular state, these include: ● unredeemed gift certificates and gift cards; ● uncashed refund and rebate
0607_CalProd_PCA (MUST USE)
»Seeing Is Believing P.C.A. Calendars & Diaries’ World Scenic Double View Desk Calendar must be seen in order to be believed. The item’s unique construction allows the same month to appear on both sides of the calendar at the same time. It measures 71⁄2x5" and can be imprinted in silver on a 61⁄2x15⁄16" area with a maximum of five lines. English or bilingual copy can be used. (514) 493-1405 Circle 212 on Info Card or visit www.pmdm.com/infocard
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The virtually simultaenous bankruptcies of The Sharper Image and Lillian Vernon shouldn’t have surprised anyone. The rules of the game have changed. It started with merchandising. Once the merchandise in these catalogs went stale, both companies entered a dangerous spiral, losing demand per book while driving up marketing cost as a percent of sales. Once demand started to decline, the only lever left was price and reduced marketing costs, both of which lowered gross margins. Starving Margins Gross margins are more important this year than in the past because the Internet has flattened competition among retailers, making the marketplace more efficient every
10 Steps to a Successful Redesign
A catalog redesign has a lot in common with a midlife crisis makeover. There comes a time in every catalog’s life — if it’s lucky to survive long enough — when it looks around at the competition and feels ugly, frumpy and over the hill. And though there’s no single redesign shape up solution that fits everyone, we all travel the same path. So here are 10 steps to a “new you.” 1. Do you really need a whole new you, or just a haircut? Before you start looking at new fonts and cover treatments, determine the purpose of your redesign. • Is it
A Chat With May’s Profile, Suzanne Vlietstra, president of Hobby Horse Clothing Co.
Catalog Success: Where’s the company headquartered? Suzanne Vlietstra: Chino, California. That’s about 30 miles east of Los Angeles. CS: What are your catalog’s customer demographics? SV: Our customer is female; 30 to 50 [years of age]; college-educated; hundred thousand dollar household income, or greater; owns two horses; and horses are her passion. CS: When was the company established? When did you begin mailing catalogs? SV: I started the company when I was in junior high school. It was incorporated in 1987 while I was in high school. I didn’t mail a catalog until 1991. I always wanted to. When I was
Audio: A Chat With May’s Profile, Suzanne Vlietstra, president of Hobby Horse Clothing Co.
Click here to listen to our full interview with May’s Profile of Success, Suzanne Vlietstra, president of Hobby Horse Clothing Co.
Beyond the Spreadsheet
Whether you pursue a small niche or the broad mass market, there are few decisions more vital than choosing your merchandise suppliers. Often businesses treat sourcing as an arm of product development; something to be simply spreadsheeted out by a team of analysts who report back to managers on which suppliers will be best for the lines the company plans to offer. That’s not to say a spreadsheet won’t come in handy, but it’s no substitute for digging deeply to figure out what you need from your suppliers and what they can do for you. First and most importantly, define the critical factors that
Bruce_Karp
“Dear Michael and Steven, You should both know that despite all of your fathers rants and raves, he loved you both very much. You should know that both of you were talked about without any prompting or probing. No matter what you guys were up to, he was proud of his sons. Shelly, he knew you were a Jewish saint.” - Franklin Karp, COO, Audio Video Systems
Catalog Doctor
PATIENT: Doc, 20 years ago, I launched a new catalog successfully. Now I’m thinking of launching another one. But I’ve been out of the business for a while. A lot must have changed in the last 20 years. What’s different about a launch or spin-off today that I need to know? CATALOG DOCTOR: Many of the old prescriptions for a launch or spin-off still work. But there are also new, complex combination treatments because of today’s postage costs, paper costs and the growth of the Web. Kitchen Table Still Usable? Launching a brand-new catalog from your kitchen table is still a theoretical possibility. Then
Cataloger Spotlight
Why would Redcats USA, the parent company of the former Lane Bryant catalog, abandon such a recognizable name last November by changing it to Woman Within? Plain and simple: The company’s hand was forced. As part of its licensing agreement with Limited Brands, the former owner of the Lane Bryant company that sold the catalog division to Brylane (renamed Redcats several years ago), Brylane agreed to stop using the Lane Bryant name for its mail order catalog 15 years after the acquisition, which was last October. What You Can Learn After unsuccessfully trying to renegotiate the licensing agreement with the management of Charming
Copywriting for the 21st Century
During a recent conference, I spent many an hour critiquing catalogs for managers hungry for ways to make their catalogs work smarter. I noticed one prevalent flaw: Most of the catalogs were written and designed for a customer who disappeared 10 years ago. As surely as our world is changing, so is the public, particularly catalog prospects and customers. Today’s customers are: • overloaded with information; • time-impoverished; • overstimulated by world events; and • feeling a financial pinch. What’s more, customers are jaded from being force-fed hyperbole. And while catalogers have little control over the four issues above, they're often
Creative Cut
A beautiful front cover shot beckons the recipient of Fancy Flours’ Holiday 2007 catalog to open up and browse. Most bakers would be drawn to these cookies, frosted and decorated in the holiday spirit. It has a Martha Stewart feeling, with the soft photography and the celadon coloration. Unfortunately, after the photography, it’s all downhill. First of all, where’s the name of the catalog? Oh, there it is, on the bottom of the cover, in small, hard-to-read script type. Logos belong front and center. A cataloger’s name should be the first thing customers see, hopefully peaking out on the top. In the glut
Get a Grip on Your D.C.
Most fulfillment processes are largely manual in nature, as only the very largest companies can justify advanced automation. Looking at the total cost of back-end order fulfillment — including direct and indirect labor, occupancy, and shipping supplies — total labor generally makes up 60 percent to 65 percent. That excludes any shipping costs because they distort the comparisons. Benchmarking ShareGroups, a proprietary program in which participants share benchmarking data, reveals that labor rates were typically around $7 an hour five years ago. Today, they’ve reached $12 to $13 an hour for many direct marketing businesses, plus a 20 percent benefit rate. But overall productivity
HD DVD Review: One Six Right
Can’t Get Enough? … There’s Much More on Our Web Site! Go to our Web site for more money-making ideas and information about the catalog/multichannel business. You’ll find even more to read on CatalogSuccess.com. We go well beyond merely posting the entire contents of the print edition. We offer all sorts of Web-only features and other useful information. > Catalog Success 200 Online! It’s the definitive ranking of the true movers and shakers of the catalog business, and just a click away. You can access this ranking of the 200 catalogs with the fastest-growing housefiles over the past year
IndustryEye
PacBlue Digital Imaging, a Van-couver, British Columbia-based digital printing firm, drew more than 20,000 attendees to its recent Vancouver Sun EPIC Sustainable Living Expo. The three-day green exposition enabled consumers and merchants to come together in support of environmentally friendly products and companies. The event touted the use of waterless printing and its benefits to the environment. The process involves using heat, rather than water, to transfer ink to the substrate. A conventional press the size of the waterless press used by PacBlue Digital uses as much as 12,000 liters of water per year. In contrast, PacBlue’s waterless press eliminates 98 percent of
Legal Matters
Escheat. The very word sounds sinister, and for good reason — direct marketers beware! But how do state escheat laws, which are often known as “abandoned property laws,” work? And what risk do they pose to multichannel merchants? Defining ‘Unclaimed Property’ Let’s start with unclaimed property. This is a liability that a company owes to an individual or other business that has remained outstanding beyond a specified period of time. Every year, billions of dollars of economic entitlements go unclaimed, including obligations of retailers to their customers and suppliers. Depending on the particular state, these include: • unredeemed gift certificates and gift cards; •
Multichannel Marketing: Channel Surfing
As the number of channels through which catalogers promote their products increases, so, too, does the need for consistency among an organization’s marketing materials. If you want both existing customers and prospects to recognize your brand, the elements that are used in your catalog must appear on your Web site, in your e-mail campaigns and, if applicable, at the retail level. It sounds like common sense, but if your creative processes aren’t streamlined, consistency can be difficult to achieve. “Some companies, like Harry and David, are really good at keeping it all aligned: their Web sites, e-mails and stores,” notes Carol Worthington-Levy, partner
Profile of Success: Best in Show
WHAT GOT HER HERE: Childhood ambition. Growing up as a self-proclaimed “horse girl,” Vlietstra had a number of goals in mind for her future. “I wanted a horse-related business, a supply-type business,” she says. “And I wanted to have a catalog. Because when I was a little kid, I remember seeing some horse catalogs. And to me, they were like the Sears Wish Book.” A teen sensation of sorts, Vlietstra incorporated her company in 1987, while still in high school. She mailed the first catalogs in 1991. Today, Hobby Horse sells products through its catalog and Web site as well as through 130
Stayin’ Hollywood
Take a stroll down Hollywood Boulevard today and you’ll find it’s not as sleazy or creepy as it once was. Urban renewal has been in full force with the rise of the Kodak Theatre (home of the Academy Awards) and the Hollywood & Highland Center shopping complex adjacent to the reinvigorated and timeless tourist attraction, Grauman’s Chinese Theatre. Like the boulevard it resides on, Frederick’s of Hollywood has been undergoing a makeover of sorts. But for the 61-year-old cataloger/retailer of racy women’s lingerie, the past decade has been a rough ride. It began in 2000, with a two-and-a-half-year reorganization under Chapter 11 bankruptcy
Strategy: Catalog Cost Cutting ’08, Part 2
Catalogers always need to know how to maximize their printing, paper and mail distribution programs, especially now that we all face seemingly continuous paper and postage cost increases. In our April issue (pg. 34), I exposed 10 places where expensive fat is hiding in your paper and its printing process. This month, we're going to do the same for your postal expenses. More than 50 percent of the cost to print and mail a catalog is postage. Therefore, the manner in which you distribute your catalog into the U.S. Postal Service mailstream is critical to containing postal costs. In this column, I’ll
The Editor’s Take
Overall retail sales are down, and the catalog/multichannel sector is no exception. The housing market stinks. And while in the past you could often find promising trends in sales of home furnishings when housing sales were down and consumers reverted to nesting, that’s not the case now. That’s reality, and I’m afraid we can’t mask all this bad news with a runaway success story on the cover this month. But there are plenty of things you can learn from Frederick’s of Hollywood about weathering tough times. Although there are bigger success stories out there, Frederick’s has been trying to dig itself out
The Symphony Changed Keys
Most B-to-B marketers today are conductors of their multichannel orchestras. But conducting requires more than a baton, as it’s become far more complex with many new “instruments” at our disposal. Most of the money in our marketing budget used to be spent in the mail or on the phone, but in the past five years, online investments and marketing activities have skyrocketed. Consider the range of activities that we, as B-to-B marketers, may be involved in. Offline • direct mail; • telesales; • account-based relationship sales; • public relations; • sponsorships; • dealer networks; • retail stores; and • DRTV. Online • organic search/search
Valuations & Acquisitions: The 5 Cs for Better Gross Margins
The virtually simultaneous bankruptcies of The Sharper Image and Lillian Vernon shouldn’t have surprised anyone. The rules of the game have changed. It started with merchandising. Once the merchandise in these catalogs went stale, both companies entered a dangerous spiral, losing demand per book while driving up marketing costs as a percent of sales. Once demand started to decline, the only lever left was price and reduced marketing costs, both of which lowered gross margins. Starving Margins Gross margins are more important this year than in the past because the Internet has flattened competition among retailers, making the marketplace more efficient every
Whatever Happened to Precise DM Measurement
In ancient times — say 10 years ago — catalogers prided themselves on having a precisely measurable medium. They were the scientists of the marketing world. Most catalogers took the majority of their orders by phone and spent a great deal of effort capturing source codes and order IDs from every call. As computer technology and database expertise became cheaper and more widely available, we were not only able to measure precisely which customers responded to our mailings, but also what they bought and from which editions of our catalogs. We measured the performance of every square inch of every edition and smugly thought
