|
In this issue of the Food-by-Mail Industry Update (FBMIU) we will summarize some of the key numbers we have aggregated from several specialty-food mailers in the holiday (Sep-Dec) 2009 season.
It was a challenging season, but for most specialty-food online merchants it was significantly better than holiday 2008. The season started slow—September sales were down 7%. October was down 9%. November was still soft, but sales were only down 2%. Business came roaring back in the last half of December, and sales for the month were 7% ahead of the prior year.
The companies we track posted a 2% overall increase compared to a 6% decrease in holiday 2008. Almost all of them went into the season with very conservative revenue goals—expecting flat to slightly lower sales than the prior year. Therefore, most met or exceeded their plan. As one client said, “What a difference a year makes!”
Looking at the distribution of companies by growth rate, we found:
18% of the companies’ sales fell more than 10%. 27% had sales declines of 1% to 10%. 19% grew from 1% to 10%. 36% posted gains greater than 10%.
Almost all clients reduced expenses where possible. They cut circulation, reduced list rental prospecting, made fewer changes to their catalogs and websites, reused more photography than usual, introduced fewer new items, delayed hiring seasonal personnel, and kept inventories lower than usual.
As a result of lower costs and meeting or beating their sales plans, most clients and other specialty-food direct marketers’ profits were better than expected. Again…what a difference a year makes!
Mailing Trends
From September 1 to December 31, 2009, we received 876 specialty-food catalogs. Upon review of these, we found:
For the first time in five years, the median page count went up. In 2008, the median page count was 27; it was 28 in 2009. 62% of the catalogs were full-size, up from 53% last year. 14% were slim-jims, down from 22% last year. Due to more stringent tabbing requirements, the slim-jim format is all but dead. 11% were digest-size books compared to 6% last year. The remaining 13% of the food mailings we received were various shapes and sizes (including postcards, letters, and a few 3-D mailers). Customers continued to order later in the season. Over 58% of the season’s orders and sales occurred in December, up from 55% last year. Over 72% of orders and sales were generated between November 16 to December 31, up from 70% in 2008. As a result of customers ordering later in the season, catalogers continue to mail later each year. 26% of the catalogs we received arrived in December vs. 21% in 2008.
Of all of the catalogs we received, 50% had some type of promotional offer vs. 38% last year. Shipping offers (free, conditionally free, and flat-rate shipping) and percent off merchandise totals were the most popular type of offer. The following table shows the percent of all catalogs we received by offer type.
To sum up the season, sales were stronger than almost any of us thought they would be. Companies did a great job reducing expenses without cutting essential service levels and marketing programs. Catalogers continued a long-running trend of mailing later, but they basically maintained page counts. There was a dramatic increase in the number of catalogs with promotional offers, with free or discounted shipping leading the way.
In the next few issues of the Food-by-Mail Industry Update we will present stats, trends and benchmarks for web performance, paid-search programs, and email campaigns for specialty-food online merchants. We will also review some of the common elements and techniques used by high-performing specialty-food direct marketers and discuss how you can apply these techniques to your mail order and online food business. Finally, we will report on the results of our fourth annual survey of specialty-food online consumers. Our hope is that this information will give you a frame of reference as you begin analyzing your own results from holiday 2009 and help you in your planning for holiday 2010.
Warmest regards,
Tony Cox
President
The 5th Food Group and Catalog Solutions, LLC
ABOUT 5TH FOOD GROUP & CATALOG SOLUTIONS
5th Food Group helps specialty-food catalogers and Internet marketers grow and make more money by developing, managing and implementing their mail order and online marketing programs.
We are the only catalog/Internet marketing firm that works exclusively in the specialty-food industry.
Helping smaller companies and larger companies with small mail-order or Internet divisions is what we do best.
Visit us online at www.5thFoodGroup.com to download a copy of our free booklet, The Seven Habits of Highly Ineffective Catalogers, and for information on our fully guaranteed introductory program called JumpStart,
back issues of the FBMIU and other information on our services.
|
