Catalog industry gets creative to counteract USPS postage hike

In January, the United States Postal Service raised its rate on postage. While the slight hike has many customers rolling their eyes, industries that rely in the postal service for bulk mail have been less than happy.

According to a recent article from the Independent Retailer, the USPS increase was 5.9 percent across all mailing types. That is the largest single increase since 2007. Because of this, some industries, like catalog mailers, have been forced to get creative in order to remain effective.

Because of the increased cost of shipping, there would seem to be three options: reduce circulation, reduce frequency or start using a more online approach. However, some decided to think outside the box and created "Mini Slim Catalogs."

By reducing the size of the catalog and number of pages, companies were able to cut both mailing and production costs by a third. On top of that, organizations have been able to grow traffic on their website by advertising it in the document.

"Mail remains the most productive of media channels for most marketers, and there are no adequate substitutes for it," Hamilton Davison, president and executive director of the American Catalog Mailers Association (ACMA), told the news source.

Back in 2012, the organization commissioned a survey from FGI Research. The results show that consumers who receive and use catalogs believe they are more useful than other types of unsolicited mail. Who of us doesn't have fond memories of circling potential Christmas gifts in the Sears catalog as a child?

Davison added that while there is a benefit to using catalogs, it can be hard for the industry to accept the fact that these systems need to change. It will be a rare day where a CEO will hear the pleas of "postage is up 5.9 percent, I need 5.9 percent added to the budget" coming from the marketing department and agree it is a good idea.

That is why outside the box thinking is so critical as companies need to find additional ways to offset the cost increases. Incorporating a website into the print version is an inexpensive way to do this. Currently, about 60 percent of orders are placed through the internet.

In a mini case study, the article interviewed Kerrie Thornton, a business analyst for National Ropers Supply (NRS). The Texas-based company sells western lifestyle decor and supplies and traditional mailed out six 250 page full catalogs a year. That came with a cost of $1.50 for each.

The postage increase over the years caused NRS executives to start rethinking operations to save money. The first move was to reduce the number of pages to 84. While it saved on production costs, it was still pricey to mail. Now, the company has evolved again and currently puts out two full catalogs a year, but supplements them with mini catalogs that push users to the website.

"Sales with the mini catalogs were as good or better than with the 84 page catalogs," Thornton said. "For about the cost of producing and mailing a postcard, we have found this to be a much more effective direct marketing approach."

While technology like the internet is providing stiff competition for the mailing industry, companies that get creative with direct mail can improve overall operations. An intelligent mailing solution provider can help any business start to try new approaches.