It's snowing catalogs this season
Earlier this year Kathy Simmons, a New Yorker, bought a running suit from Land's End, a Wisconsin-based mail-order company. Although she later returned it, she has since received 24 more catalogs from stores and shops she had never ever heard of. Companies from as far away as Seattle have included her on their mailing lists this fall.
What happened to Ms. Simmons is not unusual. According to Donna Sweeney, a spokewoman for the Direct Mail-Marketing Association, "If you send away for one catalog, other catalogs will eventually start to sell to you. It's just that it's happening at a faster rate now." Ms. Sweeney estimates that the direct-mail marketing business is growing at a 12 to 15 percent annual rate, compared with an estimated 6.5 percent for conventional retail sales. Another indication of the increasing interest in direct- mail advertising is the fact the association's membership is up about 400 members, or more than 10 percent, over the past year and a half. Included in the growth, she says, are a lot of industries and companies that have never before sent out catalogs, such as some furniture manufacturers and oil companies. And earlier this year Ford and Chrysler sent out mailings to prospective customers, showing their new lines of cars. Museums and colleges are likewise using mailings more often.
Michael Manzari of Kleid Company, mailing list consultants, says a lot of major department stores "are taking mail order seriously." Mr. Manzari says even Bloomingdale's, based in New York, which spends a lot of money on producing its catalogs, has decided to make its mail-order business into a separate profit center. A Blommingdale's representative was not available for comment.
Behind the surge in mailings has been a variety of factors. First is the rising cost of gasoline. This has made shopping by car a little more of a luxury. And when gasoline lines are in evidence, it also makes ordering by mail less time consuming. Second, says Ms. Sweeney, with the rise of women in the workplace it has become more difficult to find the time to shop. This is definitely the case of Kathy Simmons, who received the 24 catalogs. "If it was possible, I'd do all my shopping by mail," she says.
It's difficult to determine if prices in the catalogs are any lower or higher than those in the stores. One person involved in the business, who did not wish to be named, pointed out that everyone from discounters to exclusive stores uses catalogs, so it's hard to do comparison shopping. On a recent visit to Macy's, another major retailer, however, a shopper compared the prices of electronic equipment in the store with those of Markline, a direct mailer. In an electronic chess game called Challenger 8, Macy's and Markline were within 50 cents of each other. But a slightly less sophisticated model was $10 cheaper in the catalog. A Business Analyst 2 calculator from Texas Instruments was only a nickel cheaper than Macy's.
With food, it was nearly impossible to compare Macy's gift packages with those offered in the Swiss Colony, a well-established Wisconsin mail-order house. Cheese selections were completely different, as were weighs and qualities. The same was true of the fruit baskets and sausage selections.
Mail order has become so popular that some companies have totally stepped out of the commercial retailing business and now concentrate solely on selling through catalogs.
Robert Swift, the president of one such company, the Country Loft, in Hingham , Mass., says he decided in 1976 to sell entirely through the mail because of greater growth possibilities. "There is a large untapped potential for customers," he says, adding, "Some studies have found that only 25 percent of the potential buyers shop through the mail." To locate those potential customers , Mr. Swift, like others, rents lists from other catalog companies or from a "list broker," such as Mr. Manzari. Rentals cost $35 to $70 per thousand for a one-time use. Through an exchange of lists with Land's End, his company obtained the name of Ms. Simmons, he notes.
Because the mail-order business looks like a gold mine, a lot of people are entering it. Mr. Swift says new entries have been fostered by advertisements in magazines, which picture people with a pile of mail and a stack of checks. The implications are that the mail order business is a "get rich quick" scheme. But he says that "the business is very involved with detail and it takes a lot of time and money to do it and succeed."
Not only is it getting more competitive, but it is also faced with rising expenses. The post office is talking about raising postal rates on bulk-rate, presorted mail from 8.4 cents apiece to 10 or 11 cents, and the costs of paper and printing are constantly rising.
And of course there are certain risks for the mail-order houses. Chief among them is that their products may not sell. Once the catalogs are printed, there is little opportunity to cash in on a new product or new fashion, for example. However, the risks haven't stopped many from getting into the business.