The Catablog
Posts Tagged ‘catalog’
Paper Price Increases Announced
Over the past three business days, we have seen the North American paper mills announce price increases. The following is a list of mills, the affected grades, and when the increase takes effect:
Appleton Coated – $1.50/cwt:
Affected grades:
- Utopia 3
- Utopia Book Family Grades
- Utopia Film Coat
- All private label grades
- All basis weights and finishes
- Effective with shipments April 1st, 2010 or later.
West Linn – $1.50/cwt:
Affected Grades:
- Sonoma
- Capistrano
- Natureweb
- Natureweb Plus
- All basis weights and finishes
- Effective with all new or existing orders shipped on or after April 1st 2010.
Verso – $1.50/cwt:
Affected Grades:
- Influence
- Velocity
- Liberty
- Advocate
- Clarity
- All basis weights and finishes
- Effective with all orders entered immediately (3/15) and all order shipping on or after April 1st 2010.
Evergreen – $1.50/cwt:
Affected Grades:
- TruSpec 4
- TruSpec 4.5
- TruSpec 5
- All basis weights and finishes
- Effective with orders entered immediately (3/16) and all orders shipping on or after April 1st, 2010.
AbitibiBowater – $1.50/cwt:
Affected Grades:
- AbiBowGloss
- AbiBowBright 76
- AbiBowBright 80
- AbiBowMax 84
- AbiBow SCA
- AbiBow SCB
- AbiBow SNC
- All basis weights and finishes
- Effective for all new orders placed immediately and for all shipments effective May 1st, 2010.
NewPage – $1.50/cwt:
Affected grades:
- Arborweb
- Orion
- Vision
- Escanaba
- Dependoweb
- Capri
- Consoweb
- All basis weights and finishes
- Effective with new orders entered on or after March 15th, 2010.
Why the increase?
In discussing these increases with the various mills, the most common answer has been their production COSTS. Indeed, those have been on a slow, but steady rise over the past six months, especially with the price of their primary input, pulp. The mills were able to absorb these rising costs as long as they were still making money from the Black Liquor tax credit, but now that it is gone (as of 12/31/09) they are hurting.
Another reason being given is the strength they are seeing in their order logs. Since November 2009, there has been an uptick in orders, and year over year paper shipment numbers have seen double digit increases since December 2009. The mills have curtailed so much production in the past 24 months that they believe they have been able to bring their supply level in line with demand.
Will there be more?
My estimate is that the $1.50/cwt increase is only half of what the mills really want. I believe they initially wanted $3.00/cwt, but have since realized that perhaps two $1.50/cwt quarterly increases would be a more effective way to incrementally get what they desire. I very much expect to see another $1.50/cwt increase, effective July 1, 2010.
The Catalog Lives!
A funny thing happened on the way to proclaiming the print catalog is dead……..IT’S STILL ALIVE!
If you have spent the early days of 2010 analyzing the results of your Fall and Holiday campaigns, you may have noticed something a little strange; emails, God love’em, were blasted out in record numbers in 2009. That was good news for me because I sold a lot of email appends. As a result of all that clutter in peoples’ inboxes, not to be confused with mailboxes, the results were not all that impressive. In my humble opinion, direct marketers looking to cut costs as much as possible, yet still justify their existence, took the route of emails over direct mail to get the message to their customers, or in some cases to prospects. In many peoples’ analyses they noticed that the average transactional value in most cases significantly decreased. Marketers took the approach that more is better. Now many are discovering that more is not always effective. That’s the bad news for me – now they want answers as to why this approach did not always work. While marketers are trying to get a handle on this, we have seen the number of emails significantly decrease over the first two months of 2010, almost by the same amount they increased last year. Oh yeah…I forgot to mention that many are turning back to the direct side in the meantime.
Do not be confused; email campaigns are still highly critical to one’s overall marketing and branding efforts. What seems to have been lost is the fact that many of these email campaigns fail to “show me the money.” Just because they are cheap, it does not mean they are the best way to engage your customers. In order for an email campaign to be successful, the same tried and true direct marketing rules need to be applied. In fact, because emails are inexpensive there is no reason for the campaign NOT to be relevant, personal and recognizing the customers’ recent history with you.
Here is a thought you may want to consider…if you have customers that have not purchased from you in the past six to nine months, conduct a test (isn’t that the beauty of direct marketing?). Take half of those customers and send them an email offer enticing them back to you. Then take the other half and send them a direct mail piece (catalog or similar) with the same message. I’ll bet you two things will happen: (1) your average transaction will be higher from the mailpiece as opposed to the email and (2) overall sales from the campaign will be higher. If you really want to get nuts, segment this group into thirds and the third group gets both the email and direct mail piece.
However you want to do this, the important factor here is that you talk to these people as individuals. I was just at the Black Eyed Peas concert the other night along with 14,000 others. We were all there to see the great performance so we had that in common (like the customers who buy from you), but as I looked around, I realized I had very little else in common with those around me. So to “target” a message to this general audience about an after-concert party at a night club offering three-for-one shots of some kind of vodka until 3:00 a.m. on a work night would not interest me (actually it does but for this article the official word is that it does not). But a message telling me of a valet service that would also allow me a quicker exit from the place after the concert would be of great interest. The point is that your customers are very different from one another. You have the data to prove that. You do, right? If not call me ASAP. Now use it like there’s no tomorrow (because one never knows).
Me? I want to be media agnostic – use the best channel or channels for the specific campaign. But all channels should work together so your company will not only survive but thrive.
Remember – your catalog is still the most important merchandising tool you have. Treat it as such.
Happy Holidays from Arandell Corporation
Happy Holidays to you and yours from all of us at Arandell Corporation! Our corporate blog’s innaugural year is nearing its end and we can’t begin to express how much we have enjoyed this addition to our marketing repetoire. Here are the links to your favorite articles to date:
A Flurry of Postal Updates: Droop Test, Move Update, Winter Sale, Dry Release Cards
9 Reasons to Mail More in 2010
No Postal Increase in 2010 – Really?
Canada Post Corp. Rate Changes Effective January 11, 2010
If you have any suggestions or requests for future blog posts, please send an email to blogging@arandell.com. We thank you for all of your feedback so far and look forward to adding more in the New Year.
On behalf of all of us at Arandell Corporation, we wish you a happy and safe holiday season.
9 Reasons to Mail More in 2010
“The economy is weak.”
“My budgets are frozen.”
“We are barely surviving as is.”
“I don’t have enough staff or time to even think about prospecting.”
“I have plenty of non-active buyers on my file who I can turn to.”
And the best one…..”business is not good right now.”
If you answered, “yes” to any of these, you are a great candidate to ramp up your prospecting in 2010, or for most of you, to actually begin prospecting again after a year or two of not doing it. Why? Because the cost and timing to acquire a new customer could not be better.
First let’s look at the cost side of the equation.�
1. The USPS has frozen rates for 2010 and is considering offering incentives to mail more. Even without the incentives, rates are locked for 2010 and for budgeting purposes you have a stable fixed cost.
2. List brokers are willing to deal like never before. Co-ops are also loosening their rules and barriers to entry. Discounts and incentives that were once for only the large mailers (are there any of those left?) are now being offered to virtually all mailers.
3. Arandell Corporation is also in a great position to provide you with the most innovative solutions to reduce your costs and deliver your message as efficiently as possible. Technology in the industry has never been better.
4. Your other suppliers have also been driven to invest in the tools, technologies and personnel to keep you going (as well as themselves) and will do whatever they can to earn your business (and to stay alive themselves).
The other side of the equation is timing and as they say…”timing is everything.”
1. Despite the fact that the economy is shaky, there are people out there still wanting and needing goods and services. If you have been to a mall lately, they are still very crowded. Yes, some stores are doing better than others, but isn’t that always the case and isn’t that what marketing is all about?….finding and talking to people who fit your target? There will always be winners and losers.
2. Because there are fewer competitors of all kinds out there, there are fewer catalogs and direct mail pieces being delivered. If you have a good product, demonstrate value, provide a great experience and deliver memorable customer service, you will be noticed and successful. Again, as bad as it may be out there, people are buying, people are going to stores and people are looking to feel good. What an opportunity.
3. You also have the opportunity to capture customers, maybe for a long time. Keep the messages and your brand going. Once you stop, your “loyal” customers will likely forget about you and stop as well. The people that never heard from you have fewer messages to decipher and that is a good thing for you, so again, now is the time.
4. The amount of available data used to find the “best” prospects is also at an all-time high. Today, you can slice and dice using an infinite amount of data if you feel so inclined.
5. The methods to reach new customers are greater than ever. Every channel has potential for you in today’s environment. Do not assume that your potential customer is not using all of them in their daily lives today.
So, while it won’t be easy, the path to growing your business is a little smoother than it once was and may ever be. You don’t have to jump in with both feet but now is the time to test the water….. at least with your toes.
Because that’s the Way it has Always Been Done
Have you heard that line before? If so, I hope you don’t accept it as your “final answer.” Just because something has always been done a certain way, that’s no reason to keep doing it the same way, unless of course the method has no room for improvement. And, I certainly hope you have not been applying the “because it has always been done that way” mentality to your catalog design. You can still maintain brand image while also changing up variables such as layouts, messages, formats, sizes, page counts, in-home dates, etc. In fact, you should be changing things up to measure how response rates fluctuate from one catalog design to the next.
Maybe you’re a cataloger who has always mailed letter-size booklets or “Slim Jims.” How has your response rate changed since the USPS implemented its new tabbing regulations earlier this year? If it has gone down, maybe it’s time to try something new, like a traditional upright format. Have you typically produced a catalog with an oblong format? With the USPS bringing out new Droop Test regulations, now is the perfect time to implement a new format for your catalog because the oblong is not going to survive with the new droop/deflection standards. Could you transition to an upright or square format? Try it! Have you always treated all customers, regardless of purchase history, the same? If so, maybe it’s time to use a more dynamic approach to how you target customers. Do you use database marketing to help you with those efforts? If not, it’s time.
all about ROI recently released its “50 Best Tips of 2009“; I highly recommend reading it, as it gives some great ideas for changing up your current multichannel marketing plan (or offering you reassurance for the one you already have). Regardless of what strategies you decide to implement going forward, don’t apply the same ones as this year just because “that’s the way it has always been done.” That’s a sure fire way to bring your success to a standstill. Change is good. Embrace it!
Axing Myths About Controlling Paper Costs
I recently read an article in Multichannel Merchant that detailed some ideas about how a cataloger can gain control of their paper spend for 2010 and how these ideas will always result in lower costs. In reviewing these ideas, I found some of them to contain the truth, but not “the whole truth” as they say in court. So I thought I would provide some perspective from a printer who supplies paper for many of our clients.
Idea #1: Establish long term pricing now
Pricing levels have decreased some 20% YTD. And while the buyers of paper have had the upper hand throughout the year, that will change in 2010. The producers will be able to pass along some increases.
Printers have the upper hand when it comes to negotiating pricing caps. When an end user is negotiating their prices with a mill (through a merchant), their only negotiating tool is their annual tonnage. A printer has the ability to take the annual tonnage of all of their paper clients, combine them and use the whole as leverage with their mill partners, thereby increasing the paper buying power of their clients. By being part of the whole, you can significantly limit your exposure to these increases.
Ideas #2 & #3: Challenge your printer to reduce waste and use paper calculators
Paper waste is a natural part of the printing process. A printer is not only challenged on their waste factors by end users, but also by the industry as a whole. The more they can reduce their waste factors, the better position they are in to reduce paper consumption costs. A “paper calculator” is a very generic tool that some merchants have put together to try to challenge the printer on their waste and create an “in” with an end user.
The printer knows their presses. They know the most efficient way produce a job on press. They know what grades, basis weights, finishes and specific brands of paper perform the best on their presses. They work everyday on ways to reduce paper waste factors. Yes, it is important to consider waste. But to use a very generic calculator to come up with tonnage numbers that really have no basis in reality is a good way to create contention. Trust me; the printer is doing their very best on your behalf.
Ideas #4 & #5: Reduce your cover and text weights
Always a good thing to consider when looking for ways to reduce paper costs. But BE CAREFUL. It might not always be the best idea. The USPS has just announced new “droop test” regulations that have a lot of end users scrambling to HIGHER basis weights in order for their pieces to pass the test.
You also might want to consider how your printed piece will look. As you decrease your basis weight, you are sacrificing opacity and creating “show through”. Your printer should have plenty of printed samples of what downgrading in basis weight will look like.
Idea #6: Ship rail
Remember the idea of combining purchases to leverage paper prices? The same can be done with shipping costs. The more paper you are ordering as a whole will dictate whether or not you are able to ship rail. An end-user who prints three or four times annually only gets to combine those tons in a shipment. But a printer who may have three or four other paper clients printing right around the same time can combine those tons and get them to ship rail. A printer has the ability to forecast, well in advance, and is in a much better position to work with mills to achieve maximum transit cost savings.
Some other ideas not mentioned in the article:
- For those end users who purchase their own paper: pay close attention to your consumption reports. The leftover inventory that is listed on your report is REAL MONEY and should be utilized as quickly as possible. Make sure you work with your printer to find a home for it as quickly as possible.
- If an opportunity to use it isn’t readily available, work with your printer to get rid of the paper. They might have an opportunity to use it on another printing for another client and might buy it from you.
- Do you know what the storage and handling charges are at your printer? If not, you should. The storage and handling of paper is a real cost to a printer. If they aren’t supplying the paper, they are going to need to charge for those services.
- In many cases, if the printer is able to supply the paper, they will waive those charges.
Questions? Please feel free to contact me any time at 800-558-8724, ext. 165 or BJHutchison@arandell.com.
Increase Your Catalog Profits by Decreasing Your Selling Space
As consumers we all know what a catalog is. Personally, I was introduced to catalogs starting at a young age. My older sister and I often got into battles over who could view the American Girl doll catalog first. As we were both avid fans and collectors (my sister owned “Molly” and I myself had “Samantha”) of the new trinkets and clothing items that had come out for our little dolls. I remember vividly carefully earmarking the glossy pages of the catalogs filled with items that I positively NEEDED for Samantha.
What I have now…
Today, though I don’t receive the American Girl catalog any longer; my mail box is full of catalogs…well, what some would consider a catalog. Just yesterday I received a Patagonia “catalog.” Beautifully printed (kudos to Arandell!) the book was filled with images of waterproof shells, down jackets and other outdoor gear and apparel. There was, however, MORE than just merchandise. As each cover indicates, the catalog is filled with amazing images from around the world. Captions denote the location and credit the photographer and in some books, provide inspiring narrative for browsers. In fact, about 45% of the catalog consists of non-selling space. The photos, captions and tales not only reiterate Patagonia’s commitment to restoring the disappearing wild world they love so much, but they also inspire the readers to keep the catalog a bit longer. Angela Weidmann, Catalog Print Production Manager at Patagonia stated,
“Customers report that the captions for the image photos are the most-read copy in our catalogs…The editorial content does prompt customers to contact us regularly. They let us know they keep our catalog around the house for months or longer; some have collections dating back decades, and many have told us they savor reading our catalogs.”
Not sold on the customization theory? Read on…
How LDC’s Could Affect Your Holiday Catalogs
It’s that time of year again …
For the average American the holiday season begins with a kick in November…and maybe October for the early planners. But for us in the printing and catalog/retail industries, the holiday season is well under way. At Arandell, we are deep in the midst of receiving files packed full of fur-lined boots, scarves and mittens, and delicious holiday hams and turkeys.
With the start of the “busy” holiday season, there are a few things that every cataloger must remember to ensure their books are produced to spec and delivered on time. One key factor of importance is meeting your LDC, or Last Date to Change.
LDC’s are creeping out.
According to Pulp & Paper Products Council, June shipments of printing and writing papers showed a 5.1% INCREASE over May shipments. Amazing! This affects catalogers because we are also seeing LDC dates creeping out. In the past we have seen three- to four-week LDC dates; now they are moving out to four- to six-weeks in some cases. Why the movement? A couple reasons:
• We are entering the typical “busy season” for paper mills, where their backlogs of orders and runs are filling up. This happens every year.
• The mills have taken a lot of downtime throughout the slow spring season. Many of the machines are still down. Because of this, specific combinations of basis weight and grade (i.e. 80#, #3 COVER) that might have been manufactured twice per month in the past, are now only manufactured once, and thereby increasing lead times and LDC’s.
In the past six- to eight months paper has been readily available; last-second spot orders have been able to be filled. Given the above two factors, however, things will continue getting tighter, and much more quickly than anticipated.
With paper prices falling to levels last seen over a year ago, there have been cases where LDC orders have INCREASED because end users have more money to spend than the last time. Multiply situations like this all over the country, and ready dates and LDC’s could continue to move out further and further.
How to ensure you have your paper when you need it.
It is important to keep in close communication with your printer and watch your LDC dates. Make sure you and your team are ready when it comes time to finalize everything. Missing your LDC could drastically affect your holiday selling season.
2009 Paper Prognostications
Recently, I was asked a series of questions about the paper market and where it is heading in the near and long term. I thought I would share some of my answers with you.
Q: What do you see as far as paper prices for the first quarter?
A: I see paper prices as a whole going back down to the levels we saw during the 2nd quarter last year. That would mean a drop of about $40-$60 ton overall. Coated groundwood will drop faster and perhaps farther than coated freesheet will. But how much depends on where supply and demand are.
Q: How would you describe the current conditions in the market as they relate to paper prices, supply and demand?
A: Right now, demand has dropped MUCH faster than the coated mills can cut their production and inventory levels. This has led to shorter than normal lead times, excess inventories, and reduced prices across the board. Since most, if not all mills are still not turning a profit (despite such dramatic price increases over the last six quarters), I believe they will try and hold the line on price. In order to do this, they will attempt to reduce capacity to a point more in line with demand. This could be very tricky, as demand continues to decrease at a rapid pace with no apparent bottom in sight.
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Call Jim Treis: 800-558-8724
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