November 24, 2006 in Business

‘Snail sales’ are still brisk

David Sharp Associated Press
 
Associated Press photo

An L.L. Bean worker reaches for items as she fills orders from the multitude of shelves at L.L. Bean’s distribution center in Freeport, Maine. On a recent day approximately 110,000 items were shipped.
(Full-size photo)

Fast facts

•The National Retail Federation projects that holiday sales will grow 5 percent to $457.4 billion.

•The Direct Marketing Association projects catalog sales will grow roughly 7.5 percent to $144 billion for the year.

FREEPORT, Maine – If your mailbox is stuffed with catalogs, that’s what the catalog retailers want to see this holiday season.

More catalog retailers like Maine-based L.L. Bean are moving toward the day when the bulk of their sales are made online. Yet the number of catalogs mailed to U.S. households has been climbing over the past couple of years.

Even though some will get tossed, catalog retailers are counting on consumers thumbing through enough of them to drive sales.

L.L. Bean expects to ship 50 million more catalogs this year than it did two years ago when it shipped 200 million catalogs.

“It is the best way for us to get lasting impressions in front of our customers,” said spokesman Rich Donaldson. Most customers hang onto the catalogs for weeks, using them for reference, making catalogs far more valuable than television, radio and Web-based marketing and advertising, all of which Bean also undertakes, Donaldson said.

Catalog retailers are hoping for a better season than last year when L.L. Bean and others resorted to free shipping amid worries about consumer confidence slipping because of Hurricane Katrina, high energy costs and the war in Iraq.

“Last year it was very tentative at this time,” said George Hague, senior marketing strategist at J. Schmid & Assoc. Inc., a catalog consulting company in Mission, Kan. “We’re seeing a more solid early season.”

Consumer confidence slipped a bit in October but seems to be holding, and many catalog retailers are anticipating healthy sales this season.

The National Retail Federation projects that holiday sales will grow 5 percent to $457.4 billion. The Direct Marketing Association projects catalog sales will grow roughly 7.5 percent to $144 billion for the year.

The days of people questioning the future of catalogs are long gone, and more and more companies are using them. Even bricks and mortar stores like Toys “R” Us and online auction house eBay have begun shipping out catalogs in recent years.

Those who predicted the demise of catalogs as online sales took off a few years back overlooked a key fact: You can’t make sales if you can’t reach your customers. Thus, L.L. Bean and others can’t afford to cut back on catalogs.

“You’re not supposed to rely on the customer to contact you. You need to contact your customers,” Hague said.

Overall, catalog distribution has grown from 16.6 billion in 2002 to 19.2 billion in 2005, according to the Direct Marketing Association. The typical American will receive 13 of them this year, DMA spokeswoman Laura Colona said from New York.

L.L. Bean decided to boost its catalog shipments even though its online sales will officially overtake catalog sales next month. And it doesn’t come cheap. Catalogs cost roughly 60 cents each to produce and mail, Donaldson said.

By year’s end, catalog sales and online sales will each account for 40 percent of sales; retail accounts for the remaining 20 percent, he said.

Catalog companies like Bean report seeing a spike in online orders when their catalogs are shipped out. Hague said his company’s research shows that 50 to 70 percent of online sales are actually driven by the catalogs, Hague said.

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