Catalogers are just as unsure of the future as everyone else. But they now have a tool to help them survive a war or calamity.
The Direct Marketing Association has issued a white paper on contingency planning during a crisis. The authors, Fred Anderson of AndersonDirect and Peter A. Johnson, a senior economist with the DMA, advise catalogers to prepare for a “brief but intense war,” and possibly a domestic event like the anthrax scare of 2001.
Both scenarios pose both risks and opportunities, they continue. For example, consumers are likely to stop reading catalogs as they focus on television news. They may also postpone purchases of non-essential items.
In the worst case, rising oil prices and a falling stock market may reduce consumer confidence. The postal delivery and banking systems also may be disrupted.
On the other hand, consumers may choose to shop at home during an emergency rather than risk a trip to a store. And a quick victory could lead to a rebound in catalog spending.
So what should a cataloger do?
Above all, think of limiting risk. Conduct analyses to eliminate the bottom segments of your lists, and cut back on unprofitable prospecting in favor of house file reactivation.
To make up for lost demand, consider an extra mailing to the best-performing house file segments. But you might also be able to eliminate a drop by analyzing your “curve truncation.” And if you do, you may be able to make up for it, in part, by doing a reminder postcard mailing or e-mail blast, the authors say.
Anderson and Johnson also advise mailers to “pay attention to the calendar. While press times are usually locked in and not flexible, the extra storage costs for a print and hold order will usually be far outweighed by the effect an adjusted mail date may have on demand.”
Similarly, analyze your merchandise mix and consider removing poor performing items. Smart mailers will move their overstocks with package inserts or catalog blow-ins, and expand cross-selling of related products.
Balance sheet management also is important. Break up large orders into two or three deliveries with the option to cancel the later ones, the authors advise. And try to negotiate extended terms with key vendors.
Any other suggestions? Defer new hires. And survey your employees to determine their exposure to crisis-related problems. For example, some may be subject to call-up in the military reserves. Others may have trouble traveling.
The full report is available to catalogers from the DMA.
