1 / 16

Catalog Industry Update

Catalog Industry Update. Tom Foti David Mastervich April 14, 2010. Catalog Industry Update. Agenda Background Product Challenges 2010-2011 Initiatives. Background. Product Performance $5.1 Billion Std. Flats/Carrier Route (~60% catalogs) 31% decline in volume since 2007

meara
Download Presentation

Catalog Industry Update

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Catalog Industry Update Tom Foti David Mastervich April 14, 2010

  2. Catalog Industry Update Agenda • Background • Product Challenges • 2010-2011 Initiatives

  3. Background Product Performance • $5.1 Billion Std. Flats/Carrier Route (~60% catalogs) • 31% decline in volume since 2007 • 2006/2007 price increase • Ongoing economic recession • Accelerated migration to web • 2010 YTD • Still in decline • Slightly below plan • 12% below SPLY 2007 2008 2009 2010

  4. Background Recent Activities • USPS & Industry Collaboration • Dedicated Catalog business team • Operational and Cost Containment Activity • Product Development Activity • Growth Opportunities • 2009 Summer Sale

  5. Product Challenges • No identification of catalogs • Cost coverage challenges • Standard Flats = 82% • Carrier Route = 145% • Standard Flats & Carrier Route = 102% • Product Elasticity • Competing market forces: • Customer need to control price • USPS need for revenue • USPS need (& regulatory requirement) to cover costs

  6. 2010 – 2011 Initiatives USPS Catalog Priorities • Identify and manage catalogs as single product • 2011 price change strategy • Operational cost saving initiatives • Incentive programs • Marketing opportunities • 2012 and beyond pricing and product strategies

  7. 2010 – 2011 Initiatives Identify and manage product as single product • Finalize definition of catalog • Build capability to identify catalog on mailing statement and in PostalOne • Combine Standard Flats and Carrier Route products • Creates more accurate representation of the product and use of product • Maintain existing price structures • Maintain existing makeup requirements • Aligns products with future FSS optional preparation

  8. 2010 – 2011 Initiatives 2011 Price Change Strategy • Recognize immediate financial organizational need to generate revenue • Working with industry to gain better understanding of product price elasticity • Strategy to address cost coverage issue with Standard Flats

  9. 2010 – 2011 Initiatives Operational Cost Savings Initiatives • FSS Implementation • Operational FSS Mail Preparation • Distribution productivity improvements • Implementation of mixed-class comail • Identify and implement other preparation and process improvements

  10. 2010 – 2011 Initiatives Incentive Programs • 2010 Summer Sale • 5-Month program: June – October 2010 • Sale period: July – Sept • Control months: June & October • Discount on incremental Standard Mail letters and flats volume above threshold • Customer threshold = SPLY volume + 5% • Discount = 30% • Downward adjustment if June & October volume is below threshold

  11. 2010 – 2011 Initiatives Incentive Programs • Proposed Weight Based Catalog Incentive • Discount available only to those who meet/exceed volume threshold • Enables catalogers to increase page count without increasing postage • More pages => more sales = > better ROI and new customer names • Larger books are attractive to titles who need to feature a wider breadth of assortment • Catalogers indicate that merchandise assortment and relative space should drive page counts • Limited increased USPS operational costs

  12. 2010 – 2011 Initiatives Incentive Programs • Catalog Weight Based Incentive example:

  13. 2010 – 2011 Initiatives Incentive Programs • Evaluate Potential Future Incentives • Volume growth • Volume commitment • Prospecting • Fulfillment • Total customer value

  14. 2010 – 2011 Initiatives Marketing Opportunities • Catalogs and E-tailing…reaching customers beyond the web • Target 35,000 pure-plays e-tailers (revenues > $3 million) • Business has grown without benefit of the mail • Many have “hit a wall” • Hungry for new growth solutions • Multi-channel strategy for multi-channel world • Ultimately adds names to the 12-month file • Develop strategies to use usps.com to promote catalogs

  15. 2010 – 2011 Initiatives 2012 and beyond product and pricing strategies • FSS Impacts • Pricing and preparation in FSS zones • Pricing and preparation in non-FSS zones • Catalog product • Mixed product opportunities • Product cost coverage strategy

  16. Questions?

More Related