- The Washington Times - Tuesday, August 20, 2002

Direct mailers including catalog retailers have been reassessing the way they do business as the weak economy and increased postal rates continue to take a bite out of their mailing budgets.
In some cases, fewer catalogs are being stuffed in mailboxes, while some companies are changing their catalog's size, paper and number of pages. More mailings are going to targeted recipients.
"They are trying different alternatives like using lighter-weight paper and [sending] smaller pieces," said Louis Mastria, director of public and international affairs for the Direct Marketing Association. "It is clearly driven by the postal cost going up."
The new postal rates went into effect June 30. It is the third rate increase for commercial mailers in the past year and a half, Mr. Mastria said. The cost to send bulk commercial mail increased 8 percent in January 2001 and another 1 percent in July 2001. The most recent change was a 7 percent increase.
The U.S. Postal Service has fallen on hard times in recent years. Mail volume continues to drop and the quasi-government agency continues to lose money. In the third quarter ended May 17, the agency reported a net loss of $281 million and overall mail volume dropped 1.2 billion pieces, or 2.5 percent, from a year earlier.
Standard mail, which is the category many catalogers and direct mailers use, had 738 million fewer pieces than last year and accounted for about 60 percent of the total decline in mail volume.
Victoria's Secret, which sent out 374 million catalogs last year, has changed the way it does business since it expects a 7.3 percent increase in postal expenses during the second half of the year.
"We anticipated there would be some changes that would need to be made in terms of the economy and other expected expenses like the postal rating change," said Anthony Hebron, a spokesman for Limited Brands, which owns the intimate-apparel chain.
Victoria's Secret has reduced the number of pages in some of this year's catalogs. There aren't necessarily fewer catalogs, just some with fewer pages, Mr. Hebron said. The company also has worked with its paper and printing vendors to cut some costs.
The Spiegel Group, which includes Spiegel, Newport News and Eddie Bauer, is also cutting back on the number of pages and targeting catalogs to its best customers.
Circulation is expected to be cut back by as much as 20 percent for the Spiegel and Newport News catalogs, said Allison Scherer, spokeswoman for the Spiegel Group in Downers Grove, Ill.
"We take into account postal rates and increases when we're making our plans," Miss Scherer said. "We maximize our resources, but we are also looking at our best customers and who we want to [market to]."
Newport News, for example, plans to cut its circulation by 17 percent this year, shifting its focus away from high-risk-credit customers. Spiegel also will re-evaluate its targeting and focus on retaining its customers.
But the change in postal rates and the economy haven't hurt all businesses.
Jos. A. Bank Clothiers, headquartered in Hampstead, Md., has had a record year in sales despite the economy. As a result, the men's clothier isn't doing anything differently with the 8 million catalogs it sends out annually, said Chief Executive Robert Wildrick.
"We haven't been affected because business has been so good," Mr. Wildrick said. "We've been fortunate."
Mr. Mastria said things for the Postal Service also will get worse as better technology becomes available.
Technology from the Internet to cell phones are "robbing some volume from the post office," he said. "This will get progressively worse as new technologies like [faster Internet] become available."

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