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High paper and postage prices are forcing Neiman Marcus Co. to retool its famous catalogs, reducing by more than 75% the number of tomes it sends out per year while seeking more advertising to defray costs.

Neiman Marcus will mail only nine catalogs in 1996, down from 40 this year. Current catalogs are targeted mailings focusing on one department at a time-shoes, lingerie, cosmetics-but the new format will "squeeze the whole store into one catalog per month," said VP-Advertising Ann Richardson.

The high-end retailer will base each book on a different theme, like spring fashions, Mother's Day gifts or health and beauty. The catalog won't be mailed in June or July, when Neiman Marcus focuses on sale merchandise, or in December.

Each 150-page catalog will resemble a magazine, with 12 to 15 pages of editorial. Articles will include fashion advice and interviews with famous designers, along with news on Neiman Marcus restaurants, boutiques and store events.

Changes in the store catalog won't affect Neiman Marcus Direct, the division producing the retailer's mail-order books. Neiman Marcus' most famous catalog, the his-and-her holiday wish book, is a mail-order piece.

The new format for the store catalog will be more expensive to produce and mail per issue-it uses higher quality, glossy paper and is significantly fatter than current Neiman Marcus catalogs-but total circulation next year will drop to 6 million, down 25% from 8 million this year.

"It's a good business decision," Ms. Richardson said, declining to quantify expected savings from the move.

The cost cutting measures stem from this year's one-two punch to the publishing industry-rising paper and postage prices that are forcing most catalogers to trim pages, cut circulation and use cheaper paper.

Third-class postage rates increased 14.3% this year, and the Postal Rate Commission is considering another hike for next year. Paper prices, meanwhile, have skyrocketed an average 47% this year.

Curiously, Neiman Marcus' decision to mail a more general catalog to a broader base of customers contradicts today's move toward targeted, relationship marketing. Sears, Roebuck & Co.'s decision to replace its general merchandise catalog with a lineup of thinner, niche mailings is one prominent example of this trend.

"A lot of smart retailers know they have a wealth of data in their databases and know they should be targeting mailings," said Bill Dean, president of catalog consultancy Bruce, Dean & Co., San Francisco.

Mr. Dean was skeptical of Neiman Marcus' plan, saying results will be hard to judge since most retailers don't attempt to measure the sales and traffic impact of store catalogs.

Neiman Marcus aims to further offset rising catalog costs by attracting more advertising. Fashion designers and cosmetics marketers have always paid retailers for product placement in catalogs. In a sales booklet sent to vendors, Neiman Marcus pitches its new catalog like a magazine, saying it "will have a greater impact than ever on a very well-qualified audience."

Because each book will reach 500,000 to 700,000 consumers-roughly five times the audience of current Neiman Marcus mailings-ad rates will increase somewhat, the retailer said.

Neiman Marcus isn't accepting institutional advertising from vendors; the retailer will continue to photograph vendor merchandise and place it in catalogs.

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