Catalog and Publication Outlook : Multiple Platform Providers
Postal Uncertainty Ahead
On the postal front, there continues to be uncertainty for both publishers and catalogers surrounding financial stability of the U.S. Postal Service (USPS). Last summer, the USPS introduced a QR code discount promotion that offered a successful attempt at creating synergy between physical and electronic mediums.
However, USPS deflection penalties forced both printers and publishers to find solutions to help magazines retain their automated discounts. And, most recently, the Postal Service has applied for an exigent (above-inflation) rate increase, among other initiatives.
Publishers and catalogers have responded to rising postage costs by including tighter qualification standards for controlled publications, partial conversion to digital editions, co-mailing and co-palletization, smaller trim sizes, lower paper grades/lighter papers, less editorial content, frequency reductions and better list hygiene practices. “The continued migration to Intelligent Mail (IM) will also enable publishers to convert from traditional Address Correction Service (ACS) to the new Free ACS systems, providing reductions in postal-related expenses, especially for large publishers,” explains RR Donnelley’s Marcoux.
On the paper front, increased supply chain costs remained a factor in 2011. According to Marcoux, paper price increases in 2011 were expected as mills took out production capacity and tried to recoup profits from previous years’ soft demand. The paper outlook for 2012 remains unpredictable because manufacturing capacity may be an issue if some mills that were shut down do not come back online.
Catalogs Remain Strong
Looking at the catalog segment, there is no evidence of the printed catalog disappearing any time soon. “Our customers tell us over and over again that the appeal of printed catalogs has not diminished in the wake of more prolific electronic means,” relays John Coyle, president of catalog, direct marketing and retail services for RR Donnelley. “While more and more orders are completed electronically, the decision to buy among shoppers is still influenced by their tactile engagement with printed catalogs.”