Catalogers and vendors gave their reactions and predictions to the cost crisis at the Catalog Conference & Exhibition here earlier this month.
Postal, ink and paper increases have already made 1995 a rough year for catalogers.
"For specialty consumer catalogs, after the March 1 price hikes, higher paper and postage costs depressed mailings. Our second-quarter mailings were significantly reduced," said John E. Van Horn, president of catalog publisher Alden Press, Elk Grove Village, Ill. "Then the April 1 announcement told us paper increases were here to stay. As for third-quarter volume, the prediction was that we would have a 22% higher volume than we did in 1994, but the past week's prediction is about even with 1994."
What's worse is that the cost increases will probably continue.
"I believe there will be another increase in costs before the end of the year, probably Oct. 1," Mr. Van Horn said. "I hope I'm wrong."
Because paper is expected to remain expensive and in tight supply, many changes are suggested.
"We must rethink long-term strategies based on these new costs," said Coy Clement, exec VP of cataloger Hanover Direct, Weehawken, N.J.
Catalogers can cut costs by using different trim sizes, smaller paper and lower grades in weight. Also, they can decrease the frequency of their mailings, increase the page count and increase the use of their house files.
"Mailers have been looking deeper into their customer files and doing more analyses of one-time buyers," said Donald Mokrynski, president of Mokrynski & Associates, Hackensack, N.J.
Although rising paper and postage costs are beyond control, one thing that can be controlled is merchandising, said Kevin O'Halloran, VP-direct marketing, Tiffany & Co., New York.
"The books have gotten smaller and the space costs more than it did a year ago. We must say to ourselves, `Does this really need to be in here?" he said.