(Catalog Age)-In each issue of the Annual Catalog Conference Show Daily, we’ve presented opinions A panel of experts has offered opinions on the state of the catalog industry. This discussion revolves around the future of the industry.

The panel includes: Reggie Brady, president of Reggie Brady Marketing Solutions; Steve Jones, vice president of marketing for Norm Thompson Outfitters; George Kiebala, vice president/senior account executive, Experian; and Allen Rosenberg, executive vice president, Marke Communications.

Q. Do you see any signs of the catalog business turning completely around?

Brady: I think 2002 will be a tough year for catalogers and for direct marketers in general. The news on all fronts continues to be glum, with consumers reacting to the current unsettled economic global climate. Catalogers have reduced spending on hiring, operations, capital budgets, and circulation. We’ve seen several catalogers go out of business or put all mailings on a temporary hiatus. The summer and early fall will continue in the doldrums, and catalogers will pin their hopes on the fourth quarter.

I wish I had a crystal ball to predict when the industry will turn around. My guess is that we’ll see the beginnings of a turnaround in the fourth quarter but that it will be next year before things really start to get better. An improving economy and a lessening of terrorist threats will inspire consumer confidence.

Jones: I don’t think the catalog business will turn completely around. We’ll evolve and move forward to a new place, incorporating what we’ve learned this year, as opposed to moving back to some place we’ve been in the past. This has always been a hallmark of our industry.

Each month we see improvement in the economic indicators and in our businesses. The recovery is happening, but I think it’s a long road out, with incremental rather than exponential progress. Next holiday will be a good bellwether for the industry, barring any catastrophic world events.

The world is growing more complex by the day, it seems, and as direct marketers, we have the ability to address our customers’ desire for a little more calm and simplicity in their lives, at least when it comes to shopping. The fact that they can order from anywhere in the world, any time day or night, with or without a catalog, makes it a little easier to get their shopping needs taken care of. This paired with a stronger economy can help pave the road to recovery.

Kiebala: The catalog medium remains an important component of the marketing mix. Its role has changed over the past few years, but it remains vital to any direct marketing strategy. Ten years ago the catalog was a driving force for customer acquisition and retention strategies in both the mail order and retail channels. Today, it complements all three channels in the multichannel marketing mix. The ways consumers are purchasing are changing–marketers need to link multiple channels together to better understand and drive purchasing behaviors across multiple contact strategies. So while the catalog business is changing, it’s such a critical component of the marketing mix there’s no doubt it’s here to stay.

Rosenberg: Most of our clients are finding it challenging just to meet 2001 sales figures and maintain current sales positions. Several have seen their spring direct business improving to meet plans. But all have cut circulation plans for spring 2002, kept inventories lean, and used fewer catalog promotions. All are counting on no outside activities, such as an anthrax scare, to keep consumer confidence high going into the fall.

(Catalog Age)–What with continual postage and parcel shipping increases, not to mention a rocky economy, these are hardly the best of times for catalogers. With that in mind, we’ve rounded up industry notables to discuss the challenges they face–and more important, how to surmount them.

The panel of experts includes: Reggie Brady, president of Reggie Brady Marketing Solutions; Steve Jones, vice president of marketing for Norm Thompson; George Kiebala, vice president/senior account executive, Experian; and Alan Rosenberg, executive vice president, Marke Communications.

Q. Given the rise in postage, how much longer will mailers be able to continue to afford mailing their catalogs?

Brady: Catalogers are already revamping their strategies. L.L. Bean’s president/CEO, Chris McCormick, recently stated the company will look at reducing the number of catalogs it sends out. Last year, L.L. Bean mailed 95 catalog editions–10 core and 85 specialty. He noted that the company’s best customers may receive 80 catalogs over the course of a year and questioned the effectiveness of this strategy. “We need to increase our voice, but once those customers receive their 78th, 79th, and 80th catalogs, those books are no longer effective,” Brady said. “We’re going to fix that.” Catalogers are going to have to market smarter. Catalogs in the mail are not going to disappear, because they are still the prime drivers of sales. But modeling and scoring and more segmentation are becoming must-dos.

Jones: It depends on the mailer. I believe one of the casualties of the USPS situation is the entrepreneurial start-up catalog. The barriers to entry (including postage) for a start-up catalog are prohibitive at this point. I’ve seen the passing (or merging/acquisition/absorption) of some interesting, distinctive small brands this past year. For the small mailers, in many cases, time is already up. Larger mailers have a few more options. We’ve been utilizing partial alternatives for several years now, but when it comes to delivering catalogs, it’s a little difficult without the USPS, and for last-mile delivery, the USPS still has the most comprehensive infrastructure. I don’t foresee a complete alternative to the USPS. There just isn’t one. But I think there are tremendous opportunities to prune costs and inefficiency from the USPS, rely on private carriers for those functions, and leverage USPS for the last mile.

Kiebala: In this evolving industry, marketers should not so much look for catalog alternatives as for complementary marketing strategies and channels to enable the catalog to perform more effectively. Develop sound targeting and contact strategies, then analyze those strategies across multiple channels. Consumers, of course, don’t concern themselves with rising postal rates, increasing printing expenses and shrinking budgets. They react to promotions on their terms. So marketers need to communicate effectively across multiple channels to each customer. Then integrate those channels to grow and retain the emerging multi-channel customers. This way, performance will outpace postal increases, paper increases, and other economic obstacles.

Rosenberg: Postal increases always have direct mailers educating themselves on alternatives. I can tell you that the June USPS increase has led clients to look to cost-saving measures among the following areas: catalog trim sizes; changes in paper grades and weights; co-mailings; less prospecting; and increases to consumers for handling fees.

Q. How do you see the Internet evolving, and how will the whole multichannel marketing approach pan out for catalogers?

Brady: Many catalogers are showing that e-commerce sales now represent more than 20% of revenue. This doesn’t mean that print catalogs are dead though, because most catalogers can source much of their online sales to postal delivery of catalogs. But Web-enabled ordering reduces order-taking costs, and regular e-mails are generating revenue opportunities. Several firms have sprung up that convert print catalogs into Web-accessible e-catalogs (Mobular, P2ionline, iCatalog) Shoppers still like the familiar, intuitive, comfortable, and pleasurable armchair experience of a print catalog. The experience for the online shopper is the same as flipping the pages of a catalog. Catalog portals also provide opportunities for increased reach and revenue. And virtually every catalog has launched an e-mail promotion strategy. Most have done a good job of branding their e-mails so that they complement the look and feel of print materials and the Web site design. Those who are best of breed are allowing customers to self-segment in terms of how often they would like to receive e-mails and what product they are interested in.

Jones: The Internet provides tremendous opportunities to enhance the customer experience. It’s the ultimate in convenience for the consumer. Anytime you satisfy the customer, you’re going to satisfy the merchant. Internet sites are now surpassing the traditional call center in terms of the features and functionality they can offer. The key to the future of the Internet is being smart about understanding how your channels work together. While you have several channels, it’s still one company and one brand, and your customer needs to have a consistent experience across your channels. Companies that organize themselves around their brands, vs. their channels, will be the long-term winners.

Kiebala: The same scenario was evident 10 or 12 years ago with retail stores perceived as affecting catalog circulation and vice versa. The Internet is both an ordering medium and another way of developing or continuing customer relationships. If you communicate effectively with customers in the channels they choose to be communicated with, your high-value customers will remain interested. There is no doubt that the need among catalogers for an effective multichannel strategy will only increase.

Rosenberg: Direct marketers are still on a learning curve when it comes to converting Internet visitors to buyers. Many of our clients find that Internet customers are using the catalog to place Internet orders. Direct marketers are using catalogs to drive customers to their Web sites and are sending a printed catalog along with Internet orders.