Arandell Corporation

Jamie Marquardt, Director, Marketing & Communications

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!

Blake Hutchison, Director of Purchasing

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.

Anna Hoffman, Sales and Marketing Analyst

What was then…

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…

Read more…

Blake Hutchison, Director of Purchasing

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.

Blake Hutchison, Director of Purchasing

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.

Read more…