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DIRECT MARKETING - What Is It?
An Aspect of Total Marketing - not a fancy term for mail order.
Marketing is the total of activities of moving goods and services from seller to buyer. Direct
Marketing has the same broad function except that Direct Marketing requires the existence
and maintenance of database.
a) to record names of customers, expires and prospects.
b) to provide a vehicle for storing, then measuring, results of advertising, usually direct
response advertising.
c) to provide a vehicle for storing, then measuring, purchasing performance.
d) to provide a vehicle for continuing direct communication by mail and/or phone.
THUS
DIRECT MARKETING is interactive, requiring database for controlled activity:
By mail, by phone, through other media selected on the basis of previous results.
DIRECT MARKETING makes direct response advertising generally desirable since response
(inquiries or purchasing transactions) can be recorded on database for building the list, providing
marketing information.
DIRECT MARKETING plays no favorites in terms of Methods of Selling...and there are only
three:
a) Where buyer seeks out seller - retailing, exhibits
b) Where seller seeks out buyer - personal selling
c) Where buyer seeks seller by mail or phone, or electronically - mail order
DIRECT MARKETING requires that a response or transaction at any location be recorded
manually or on computer.
DIRECT MARKETING can be embraced by any kind of business as defined by the U.S. Census
Standard Industrial Classification system:
Agriculture ....................................................................................................................... 0100-0999
Mining/Construction ....................................................................................................... 1000-1799
Manufacturing ................................................................................................................. 2000-4999
Wholesale ........................................................................................................................ 5010-5199
Retail ............................................................................................................................. 5210-5999
Department Stores (5311)
Financial Services ............................................................................................................ 6010-6799
Services ............................................................................................................................ 7010-7999
Advertising Agencies (7311)
Computer Houses (7372)
List Brokers (7388)
Non-Profit ........................................................................................................................ 8010-8999
Public Administration ..................................................................................................... 9100-9999
DIRECT MARKETING is an interactive system of marketing which uses one or more advertising
media to effect a measurable response and/or transaction at any location.
Source: Direct Marketing Magazine, Hoke Communications
I- 1
Direct marketing serves any one of three methods of selling:
A)
In-store Sales
B)
Personal Selling
Where seller seeks out buyer.
C)
Mail Order
Where seller entices buyer to respond by mail or phone or electronically.
The subject of this report is:
C)
Mail Order
It applies where the individual or business consumer places the order by mail, phone or
electronically, not requiring the orderer to visit the store or the vendor to collect the order by
visiting the home or the office.
It excludes sales:
 Through personal selling by any means even though outside the store.
 Where the order is placed at the catalog desk or elsewhere in the store even in response to a
catalog or other direct response communication received in the home or office.
 Outside the store where the buyer seeks out the vendor's agent or vending machine.
 Where the order is obtained by personal selling even though an inquiry or lead obtained through
a direct marketing communication.
On the other hand, it includes sales:
 Where the product or service is delivered in the store as long as the order was placed by mail,
phone or electronically.
I- 2
Mail Order Sales Definitions
 Mail Order Sales
Orders placed by mail, phone or electronically without the person ordering coming to the
point of sale to place the order or the seller coming to the office or home of the orderer to
take the order or using an agent to collect the order.
 Mail Order Specialty Vendor Segments
Segments are defined by the primary merchandising classification of the specialty marketer
and all the sales of the business are attributed to that segment. Thus the sales of the Sporting
Goods segment contain apparel sales to the extent that apparel is included in the
merchandise mix of mail order sporting goods businesses and sales of the Apparel segment
contain sporting goods to the extent that sporting goods are included in the merchandise
mix of mail order apparel businesses. Mail order specialty segments are comparable to the
sales outlet structure used by the Census of Retail Trade and not comparable to the
Merchandise Line structure of the Census of Retail Trade.
Estimates of the U.S. mail order sales are substantially lower and more defensible than those
provided by WEFA and elsewhere with estimates of consumer and business product sales
exceeding a trillion dollars. The estimates in this report:
 Are based on individual, identifiable businesses whose sales are stripped of retail, wholesale,
non-mail order direct marketing and non U.S. sales.
 Our estimates exclude:

Sales generated by Outbound Telemarketing, another form of personal selling.

In-store sales where sales consequence of direct marketing communication is traffic
generation and in-store ordering.

Personal selling where consequence of direct marketing communication is lead or inquiry
converted by personal selling.

Non-sales where direct marketing communication through any medium occurs after the sale
for billing, customer service, collection or some other non-sales purpose.
There is no transaction in the economy which is not or has not to some degree been influenced by a
direct marketing communication. Confusion in economic impact studies confusing personal selling
and mail order (typified by crediting outbound telephone to mail order rather than personal selling)
can result in crediting the entire gross national product to mail order.
I- 3
METHODOLOGIES FOR MAIL ORDER SALES ESTIMATES
Micro Estimates
Micro estimates developed for mail order sales segments on the basis of estimates of sales size of
individual mail order businesses in the segment:
 Identify mail order businesses in the segment.
 For each identified mail order business in the segment estimate the size of mail order sales net
of:
 Retail, wholesale and non-mail order sales
 Non-U.S. sales where subject market is U.S. market
 Utilize the most authoritative available sources for sales size estimating including:
• Company reports
• List data
• Press reports
• Publishing schedule data
• Industry reports
 Develop a unique estimate for each business reconciling many possible data sources for each
business.
 Segment estimates are restricted to identified businesses. No allowances are made for any
residual unidentifiable businesses. Estimates are made for businesses identified but lacking
sales sources using available distributions of mail order businesses by sales size ranges.
 Micro estimates are based on information in the proprietary Marketing Logistics Inc. database
of information on 10,000+ businesses and companies.








Airline Syndication
Animal Care
Apparel
Astrology/Occult
Audio-Video
Auto Clubs
Automotive/Aviation
Business Supplies
(excluding Computer
Software and Hardware)
 Catalog Retailers
 Collectibles
 Consumer Electronics/
Science
Micro Estimated Segments
 Crafts
 Credit Card Security
Services
 Educational Products
 Financial-Credit Card
Security Services
 Food
 Gardening
 Gifts
 Hardware/Tools
 Health Products
 Home Construction
I- 4
 Housewares
 Jewelry
 Multi-Products
(except for Infomercials, TV
Networks, TV NonNetworks)
 Oil
Company
Syndication
 Photographic Products
 Religious Products
 Sporting Goods
 Stationery
 Tobacco
 Toys/Games/Children's
Products
Macro Estimates
Macro estimates developed for mail order direct marketing sales segments on the basis of aggregate
estimates of mail order sales in the segment, or aggregate bases from which mail order sales are
extrapolated from a source for that sales segment.
Macro Estimated Segments







 Financial
 Brokerage Services
 No-Load Mutual Funds
 Flowers by Mail
 Home Study
 Infomercials
 Information Service
Programming
 Magazine/Periodical:
Subscriptions
Books
Cable TV
Catalog Showrooms
Computer Hardware
Computer Software
Cultural Events
Department/Specialty
Stores








Mailing List Services
Newsletters
Newspapers
Photofinishing Services
Prepaid Legal Services
Recorded Music
Service Contracts
Sports Events
Mixed Micro/Macro Estimates
Estimates developed for mail order direct marketing sales segments in two steps:
1. Aggregating micro estimates of mail order sales for leading mail order businesses in the
segment.
2. Extrapolating aggregate mail order sales for the entire segment by making an assumption of
sales concentration represented by the leading businesses.
Mixed Micro/Macro Estimated Segments
 Air Freight Services
 Business Communication
Services
 Business Information
Services





Business Supplies
Educational Services
Industrial Supplies
Mailing List Services
TV Networks, TV NonNetworks
 Trade Subscriptions
I- 5
METHODOLOGY: COMMENTARY
There are two fundamentally different issues in measurement of mail order sales:
(1)
Estimation of the size of mail order sales.
(2)
Estimation of the growth rate of mail order sales.
From year to year estimates of the overall size of mail order sales vary with (1) actual growth in
sales as well as (2) improvements in the available information base about sales segments and
individual businesses as well as (3) improvements of aggregation methodology and (4) recognition
of additional sales segments previously unincorporated in the base of sales segments. The first three
factors also account for changes from year to year in the estimates of the sizes of individual sales
segments, in addition to changes caused by occasional structural shifts in the assignment of subsegments of mail order businesses to sales segments.
Because of the possible mix of actual growth and information base and methodology
improvements, the reader is cautioned against making year to year comparisons of either overall
mail order sales estimates or segment estimates to extrapolate growth rates.
The issue of growth rate estimation is fundamentally different and is addressed by a separately
developed methodology with a separate information base of growth indicators. The section of this
report on Growth Rates includes a listing of information indicators which were considered in
drawing an inference on the growth rate range of mail order sales for 1998.
It is noteworthy that the difficulty of the task of estimating the size of total mail order sales is
compounded by the anonymity of some very large firms quite willing to rent lists of customers but
who don't want their own identity revealed. The task is already complicated by the void in realistic
reporting by federal government sources; by the paucity of information provided by publicly held
companies for their mail order profit centers; and by the information void about privately held
businesses. To these must be added the practice of what appear to be significant mail order
businesses to operate under pseudonyms, making verification and cross-checking of estimates even
more difficult.
I- 6
INTRODUCTION TO ESTIMATES AND INFORMATION LIMITS
1. Estimates of sizes of individual sales segments can reflect changes in sources of updating
information as well as actual changes in the marketplace.
2. Compiled 1998 consumer and business-to-business mail order sales of $289.1B compare to
1997 totals of $254.7B an increase of 13.5%. This is 1.5 percentage points more than the
estimated growth rate for 1998 of 12.0%.
The difference is largely accounted for by the following structural changes in the report from
1998:
Type of Change
Amount of
Segment
Change ($Billion)
New Segment
Change In Base
Insurance
2.0
X
Industrial/Maintenance
1.3
X
Travel
.9
X
No-Load Mutual Funds
.8
X
Cultural Events
.6
X
Toys/Children’s/Mothers’
.2
X
Magazines
-1.4
X
Net Total
4.4 (1.7% of 1997 Total)
3. Structural differences in individual segment sales are listed under relevant segments in Chapters
I, V, and VI.
4. 1998 Business Event information compiled in Chapter XIII is as of 12/31/98. Directory
information about company executives and parent affiliations in Chapters XIV and XV is also
as of 12/31/98.
5. In the event that data did not become available before the Guide's data collection deadline of
February 15, 1999, best possible estimates were prepared. The estimates contained in the Guide
represent the best possible projections from available information sources and within the limits
of reasonable aggregation procedures. The compilers and publishers of this report despite
diligence and care in preparing this report do not hold themselves responsible for any residual
errors or differences between their best estimates and actual fact.
I- 7
1998 ANNUAL SUMMARY
1998 was the year of the expansion of the Internet into the third major channel of mail order sales:
 Telephone
 Mail
 Electronic
It is estimated that consumer U.S. Internet sales amount to $5.6 billion, 3.0% of total U.S.
consumer mail order sales:
The major product categories for mail order sales were:





Discount Brokerage
General Merchandise
Computer Hardware And Software
Cultural And Sports Events
Travel Services
The five top ranked Internet businesses in U.S. on-line sales were:





eBay
Schwab.com
Gateway
Egghead.com
Amazon Books
Mail order with growth 6.1 percentage points higher than retail growth in 1998 was still modest in
the scale of retail trade and overall economic activity (11.5 percent of general merchandise sales,
4.0 percent of retail sales, 2.2 percent of consumer services, 2.1 percent of gross national product).
Overall mail order sales were $358.8 billion, with consumer mail order sales at $185.0 billion,
business mail order at $104.0 billion and charitable direct response at $69.8 billion. Consumer
product mail order at $109.0 billion was divided into $90.8 billion for specialty merchandisers and
$18.1 for general merchandisers. Consumer Services were at $76.1 billion in sales.
Overall growth in consumer/business mail order in 1998 is pegged in the 10.0% - 14.0% (12.0%)
range in money (current dollar) terms and 8.0% - 12.0% (10.0%) in real (adjusted for inflation)
terms.
It is estimated that 4 percentage points of the 12 percentage point increase was due to the Internet, leaving conventional mail order sales with an increase of 8 percentage points, only about 2
percentage points greater than the retail growth of 5.9%.
I- 8
Among specific sales segments and sub-segments, growth was above average for:
















Apparel: Great Outdoors
Apparel: Women’s Big & Tall
Books On-line
Cosmetics
Consumer Electronics: Computer Hardware
Direct Broadcast Satellite Services
Financial Services: Internet Brokerage
Multi-Products: On-Line/Internet
Insurance
Recorded Music: On-line
Sporting Goods: Athletic Equipment
Business: Computer Hardware, Computer Software
Business: Business Specialties: Libraries & Schools
Industrial: Electronics
Industrial: Industrial Maintenance/Materials Handling
Industrial: Medical
Growth was below average for:












Apparel: Women’s Fashions
Books: Mail Order Publications
Books: Encyclopedias/Yearbooks/Reference
Collectibles: Stamps & Coins
Crafts
Gardening
General Merchandise: Catalog Retailers
Home Furnishings: Bedroom/Bathroom
Magazines
Multi-Products: Infomercials
Newpapers
Photographic
Among individual companies, major size companies with noteworthy growth include:
 Amazon Books, Barnes & Noble, CD Now/N2K, Coldwater Creek, Crate & Barrel, Delia*s,
800 Flowers, Golfsmith, Nordstrom Catalog, Pottery Barn, West Marine
 Bertelsmann, DM Management Co., Dayton Hudson, Walt Disney Co., Fingerhut,
International Cornerstone Group, La Redoute, Mattel Inc., Nature’s Bounty
 Computer Discount Warehouse, Gateway, PC Connection
 America Online, L.L. Knickerbocker Co.
 GEICO Insurance
 New England Business Service, Staples, U.S. Office Products, Viking Office Products
 Dell Computer, Insight Enterprises, Programmer’s Paradise
 Barnett Inc., Cisco Systems, FreeMarkets Online, Global DirectMail Corp, MSC Industrial
Supply, Onsale, Inc., Henry Schein,
I- 9
Growth laggards were:
 Artistic Greetings, L.L. Bean, Bedford Fair, Biobottoms, Brownstone Studio, Chadwick’s Of
Boston, J. Crew, Current, Domestications, Land’s End, MedPartners, Nordic Track,
J. Peterman Co., Spiegel Catalog
 Bradford Exchange, CML Group, Cendant, Fulcrum Direct, Hanover Direct, Reader’s Digest
 Deluxe Corp.
 Newark Electronics
Remember, this information should be used as a base to build from. For current direct marketing statistics
please refer to these titles: The Direct Marketing Statistical Fact Book the Direct Marketing Response
Rate Study and the Catalog Age 150.
I-10
HIGH PENETRATION MAIL ORDER AND MARKETING DATABASE SEGMENTS
The Gross National Product estimates total domestic production including the end value of
products, services, investment, net exports and government purchases. It is a measure of the total
output of the U.S. economy including what is currently produced and consumed or added to
inventory. The Gross National Product is made up of product, service and investment categories
each of which is measured in terms of end value where end value includes without duplication
the values added by each Standard Industrial Classification contributing to the end product.
For example, for the gross national food product, the value added contributions are reflected for
each stage making the end food product possible:
Food Production/Marketing Stage
Agriculture
Food Processing
Wholesaling
Retailing
Since there is reselling from Agriculture to Food Processing to Wholesaling to Retailing, the value
of sales across these four stages contains duplications. The value of agricultural sales is included in
the value of food processing which includes in addition the value added by food processing. Gross
national product for food is substantially less than the duplicated sum of the four stages since only
the added value of each stage is reflected in GNP.
Mail order is one channel of distribution for the gross national product and service groups. That is,
many companies are using mail order as a channel of sales for products and services. There are
even more companies, however, which are using a Marketing Database in order to sell products and
services. These are companies which compile and maintain information on their inquirers and
customers whether used to obtain the sale at the customer's home or office through a mail, phone or
electronic order (mail order), or to obtain the sale through an agent visiting the customers' home or
office (direct selling) or to obtain the sale by attracting the customer to the vendor's place of sale.
The scope of Marketing Database sales is greater than that of mail order sales since it includes mail
order sales plus direct selling and vendor's location selling, accomplished or stimulated through
database marketing. Of six million U.S. firms, it is estimated that 400,000 have databases compared
to 10,000+ with significant mail order sales.
Industrial segments which make up Gross National Product for which there is a high penetration of
Marketing Database sales are more numerous than those with a high penetration of Mail Order
sales. This is even when the standard used for high penetration is much lower for Mail Order
(2%+) than for the Marketing Database (25%+). While high penetration for Mail Order is confined
to Clothing/Jewelry among Non-Durable Goods and Insurance, Legal, Private Educational,
Recreational among Services, high penetration for the Marketing Database, in addition to the listed
segments for Mail Order, includes Motor Vehicles and Furniture/Household Equipment among
Durable Goods, Food, Gas & Oil among Non-Durable Goods, Household Operations,
Banking/Brokerage, Legal, Transportation, Health and Hotels, among Services, and
Non-Residential and Residential Fixed Investment, Exports and Government Purchases.
I-11
GROSS NATIONAL PRODUCT MODEL: HIGH PENETRATION
MAIL ORDER AND MARKETING DATABASE SEGMENTS
Gross National
Product (1997)
GNP Segment
Grand Total
$Billion
High Penetration
Segments
% Of Total
Mail Order
2%+
Marketing
Database
25%+
$8,083
100.0
5,489
67.9
659
263
268
129
8.2
3.3
3.4
1.6
1,593
776
278
136
403
19.7
9.6
3.4
1.7
5.0
Services
Housing
Housing Operations
Transportation
Health
Other
Auto (repair, garage)
Hotels
Life Insurance
Legal
Private Education
Recreational
Social Services
3,238
826
329
236
855
990
40.1
10.2
4.1
2.9
10.6
12.2
Gross Private Domestic Investment
Fixed Investments
Non-Residential
Residential
Business Inventories
1,238
15.3
1,173
845
328
65
14.5
10.5
4.1
0.8
*
*
-97
-1.2
*
1,454
525
929
18.0
6.5
11.5
*
*
Personal Consumption
Expenditures
Durable Goods
Motor Vehicles
Furniture & Household
Goods
Other
Non-Durable Goods
Food
Clothing, Jewelry
Gas & Oil
Other
Net Exports
Government Purchases
Federal
State & Local
*
*
*
*
*
*
*
*
*
I-12
*
*
*
*
*
*
*
*
*
GROSS DOMESTIC PRODUCT VS. BUSINESS RECEIPTS
OF INDUSTRIAL CLASSIFICATIONS
Industrial Classification
(1994) Gross
Domestic
Product
($B)
(1994)
Business
Receipts
($B)
GDP % Of
Business
Receipts
Unduplicated
%
Total Gross Domestic Product
6,931
14,380
48
52
Agriculture, Forestry, Fishing
118
124
95
5
90
127
71
29
269
730
37
63
1,197
4,110
29
71
606
1,147
53
47
Wholesale & Retail Trade
1,072
4,343
25
75
Finance, Insurance, Real
Estate
1,274
2,191
58
42
Services
1,343
1,602
84
16
931
--
--
--
Mining
Construction
Manufacturing
Transportation, Public
Utilities
Government Enterprises
Duplication
%
The differences between GDP of industrial classifications versus total sales of industrial
classifications are demonstrated in the above table. On the average, GDP is only about one-half
(48%) of Business Receipts, with GDP reflecting unduplicated added values, and Business
Receipts including duplicated sales of one business to another or to the end-user. The lowest
duplication with negligible buying from other sectors is Extraction (Agriculture, Forestry,
Fishing) with minimal duplication (5%). At the other extreme, the greatest duplication (75%),
that is the lowest GDP to Business Receipts ratio (25%), exists for Wholesale and Retail Trade
which encompass in receipts all the duplicated added values of the extraction and manufacturing
stages of production.
I-13
NON MAIL ORDER: SALES SIZE AND COMPOSITION
Catalog
Showrooms
Direct
Selling
4
1998--Total Sales ($Million)
4,000
1998--Sales Growth %
-48.0
7.5
1997--Total Sales ($Million)
7,580
20,840
-4.3
7.5
1997--Sales Growth %
Merchandise Category %
Sales
22,400
1
2
Personal Care Products,
Cosmetics
0
29%
Jewelry, Watches, Clocks,
Silver Gifts
47
Food & Vitamins
0
Housewares, Electronics,
Home Maintenance,
Equipment & Supplies
Vending
Machines
4
Total
Consumer
Product
Mail
Order
Total
General
Merchandise
Sales
41,350
67,750
108,910
923,800
5.0
-0.1
12.0
--
39,380
67,800
101,690
855,450
5.0
--
--
--
3
3
0%
____
____
____
0
____
____
____
13
78
____
____
____
36
34
0
____
____
____
Sporting Goods, Toys,
Photo Equipment &
Amusement Services
12
6%
16
____
____
____
Books, Magazines
0
0
____
____
____
Tobacco
0
0
4
____
____
____
Other Products
5
--
2
____
____
____
100
100
100
____
____
____
TOTAL
Sources:
1
Upscale Discounting: 1989 Annual Survey
Direct Selling Association (1997 data)
3
Vending Times 1997 Annual Survey
4
Marketing Logistics 1998 estimates
2
I-14
Three major non-mail order sales channels are Catalog Showrooms, Direct Selling and Vending
Machine delivered products and services. Catalog Showrooms and Direct Selling are at about the
same sales volume of $4-$20 billion with Vending Machine at the much higher level of $41
billion. Together all three non-mail order channels account for $68 billion in consumer sales, less
than the level of consumer mail order sales at $109 billion.
Sales concentration is substantially greater by companies in non-mail order marketing than in
mail order. The greater sales concentration is probably accounted for by the higher entry
requirements in non-mail order compared to mail order: retail distribution for Catalog
Showrooms and sales representative recruiting for Direct Selling compared to marketing
investment in Mail Order.
I-15
1989 UPSCALE DISCOUNTING MARKETPLACE
Product Category
Electronics
Total
Sales
Upscale
Discounting
Total
Direct
Discounters
(Teleshopping/
Mail Order)
Discount
Department
Stores
Specialty
Discounter
Catalog
Showroom
Warehouse
Clubs
Specialty
Superstores
Traditional
Merchandising
Electronics & Office
100%
69
3
22
____
11
8
25
31
Video
100%
73
4
21
____
14
9
25
27
Telecommunications
100%
62
2
23
____
15
4
18
38
Home Office Electronics
100%
67
3
10
____
14
11
28
33
Watches
100%
66
6
28
9
21
2
____
34
Karat Gold Jewelry
100%
47
7
10
____
29
1
____
53
Diamond Jewelry
100%
33
3
6
____
24
1
____
67
Silver
100%
36
3
7
____
25
1
____
64
Tabletop/Serving Products
100%
60
2
33
____
18
7
____
40
Jewelry/Watches
I-16
1989 UPSCALE DISCOUNTING MARKETPLACE
Product Category
Housewares
Total
Sales
Upscale
Discounting
Total
Direct
Discounters
(Teleshopping/
Mail Order)
Discount
Department
Stores
Specialty
Discounter
Catalog
Showroom
Warehouse
Clubs
Specialty
Superstores
Traditional
Merchandising
Personal Care
100%
60
1
36
____
13
10
____
40
RTA Furniture
100%
54
____
25
____
18
11
____
46
Small Electrics
100%
57
1
34
____
14
8
____
43
Clocks
100%
61
1
30
____
21
9
____
39
Cookware/Bakeware
100%
49
1
30
____
10
8
____
51
Instant Camera
100%
65
____
49
6
9
1
____
35
35mm Cameras
100%
74
____
30
32
11
1
____
26
Photofinishing & Film
100%
46
____
35
5
5
1
____
54
Lenses
100%
57
____
11
25
20
1
____
43
Tripods
100%
57
____
10
28
18
1
____
43
Bags
100%
60
____
12
29
17
1
____
40
Photographic
Source: Upscale Discounting, Annual Study of Upscale Discounting, 9/89
I-17
DEPARTMENT OF COMMERCE REPORTS ON MAIL ORDER SALES
Mail Order Sales
($ Millions)
Annual %
Growth
1993
29,333
-5.8
1992
31,139
15.3
1991
27,003
9.5
1990
24,660
-1.2
1989
25,132
7.0
1988
23,494
13.1
1987
20,765
21.0
1986
17,156
8.3
1985
15,848
5.5
1984
15,014
--
--
7.7
1984-1993
Source: "Combined Annual And Revised Monthly Retail Trade, 1/84-12/93,"
U.S. Department of Commerce, Economics and Statistics Administration
Mail Order Sales
($ Millions)
Annual %
Growth
1998
54,931
12.9
1997
48,672
11.1
1996
43,798
9.4
1995
40,030
0.3
1994
39,907
--
--
8.3
1994-1998
Source: "Current Business Report, Monthly Retail Trade Sales And Inventories,"
U.S. Department of Commerce, Economics and Statistics Administration
Note: Department of Commerce estimates drastically understate the magnitude of mail
order sales as a result of bias in its data collection methodology.
I-18
DISTRIBUTION OF MAIL ORDER SALES BY TYPE OF FIRM
# Units In Firm
Single Units
Multiunits
TOTAL
Sales Size of Firm ($Millions)
25+
10-24.999
5-9.999
2.5-4.999
1-2.499
.5-.999
.25-.499
.1-.249
.05-.099
.025-.049
.010-.0249
-.010
TOTAL
Employee Size of Firm3
100+
50-99
20-49
15-19
10-14
7-9
5-6
3-4
2
1
TOTAL
# Firms
Sales ($ Million)
6,197
1,576
7,773
10,103
24,477
34,580
208
169
205
372
1,206
1,313
993
1,052
788
399
151
55
6,911
25,045
2,821
1,428
1,286
1,856
941
361
175
56
15
3
-33,986
431
531
1,932
1,105
2,129
2,199
2,598
4,288
3,337
4,459
23,009
26,557
4,399
6,519
1,980
2,958
1,969
1,720
2,009
882
714
33,936
Source: 1992 Census of Retail Trade, Department of Commerce (1997 data to be reported in
1999/2000)
I-19
DISTRIBUTION OF MAIL ORDER SALES BY MERCHANDISE LINE
# of
Establishments
Mail
Order
Sales
($000)
% of
Mail
Order
Sales
Catalog and mail-order houses
(SIC 5961)
7773
34,579,632
100.0
Groceries and other foods
Cigars, cigarettes, and tobacco
429
68
715,188
42,924
2.1
0.1
Drugs, health aids, and beauty aids
Prescriptions
Non-prescription medicines
Vitamins, minerals, and dietary supplements
Health aids
Cosmetics
Other hygiene needs
Soaps, detergents, and household cleaners
Paper and related products
Men's wear
Women's, juniors, and misses wear
Children's wear
Footwear
1,244
176
97
171
207
874
143
610
621
2,881
3,004
2,331
2,509
4,000,704
3,380,022
44,988
221,896
77,040
224,722
53,036
19,932
34,979
1,909,712
5,400,036
455,088
630,195
11.6
9.8
0.1
0.6
0.2
0.7
0.2
0.1
0.1
5.5
15.6
1.3
1.8
Sewing, knitting, and needlework goods
Curtains, draperies, and dry goods
Major household appliances
Small electric appliances
414
2,307
2,391
1,915
169,815
1,265,297
547,776
456,699
0.5
3.7
1.6
1.3
Televisions, video equipment, videotapes
2,604
1,030,532
3.0
Furniture and sleep equipment
Floor coverings
Computer hardware, software, and supplies
Kitchenware and home furnishings
Jewelry
Books
Photographic equipment and supplies
2,871
2,526
500
268
1,810
997
1,843
2,481
2,075
823
526
1,168,100
600,883
535,485
31,732
387,802
90,889
2,200,210
1,879,620
1,588,990
986,600
90,717
3.4
1.7
1.6
0.1
1.1
0.3
6.4
5.4
4.6
2.9
0.3
Toys, hobby goods, and games
Toys
Games
Hobby goods and craft kits
2,580
2,168
1,153
667
1,748,688
464,223
64,749
1,199,716
5.1
1.3
0.3
3.5
Audio equipment, musical instruments, and supplies
Audio equipment and accessories
Records, tapes, and compact discs
Musical instruments and related items
I-20
(continued)
Optical goods
Sporting goods
Hardware, tools & plumbing and electrical supplies
Lawn and garden equipment
Lumber, millwork, building materials
Automotive tires, batteries, accessories
Pets, pet foods, and pet supplies
204
1,812
1,825
2,063
941
2,315
34
181,714
1,264,254
440,726
523,412
112,610
986,627
94,020
0.5
3.7
1.3
1.5
0.3
2.9
0.3
3,265
96
103
210
1,580
229
398
1,384
55
97
106
3,602,747
94,989
28,070
27,949
152,381
93,904
1,051,329
146,399
18,558
836,056
43,457
10.4
0.3
0.1
0.1
0.4
0.3
3.0
0.4
0.1
2.4
0.1
Coins, medals, and other numismatic terms
Stamps, autographs, and other philatelic materials
Artists' materials and supplies
Religious goods
Souvenirs and novelty items
61
80
26
47
144
171,805
147,957
23,433
31,263
106,651
0.5
0.4
0.1
0.1
0.3
Seasonal decorations
Craft supplies
All other merchandise
Miscellaneous merchandise
40
79
262
(X)
37,878
156,570
412,594
21,504
0.1
0.5
1.2
0.1
574
1,468
189,779
343,878
0.6
1.0
(X)
19,372
0.1
All other merchandise
Stationery
School supplies
Office supplies
Office equipment
Greeting cards
Magazines and newspapers
Luggage and leather goods
Antiques
Collectibles
Art goods
Unclassified merchandise
Non-merchandise receipts
Miscellaneous merchandise
Source: 1992 Census of Retail Trade: Merchandise Line Sales (1997 data to be reported in 19992000)
I-21
SALES CONCENTRATION -- NON STORE MARKETING FIRMS
Firms
Establishment
s
Sales
($Million)
% of Sales
34,558
100.0
5,475
9,135
14,982
20,546
15.8
26.4
43.3
59.4
6,330
100.0
1,408
1,634
1,978
2,468
22.2
25.8
31.3
39.0
10,170
100.0
Catalog and Mail Order Houses
Firms
7,773
4 largest firms
8 largest firms
20 largest firms
50 largest firms
459
468
717
770
Merchandising Machine Operators
Firms
6,391
4 largest firms
8 largest firms
20 largest firms
50 largest firms
505
1,072
1,132
1,217
Direct Selling Establishments
Firms
13,641
4 largest firms
8 largest firms
20 largest firms
50 largest firms
992
1,214
1,387
1,566
I-22
1,732
2,189
2,953
3,753
17.0
21.5
29.0
36.9
(continued)
LEGAL FORM OF ORGANIZATION NON STORE MARKETING FIRMS
Firms
Sales
($ Million)
6,798
34,580
100.0
4,079
2,444
246
29
31,633
1,200
N/A
N/A
91.5
3.5
---
4,778
6,330
100.0
3,274
1,291
201
12
5,728
439
155
8
90.5
6.9
2.5
0.1
11,392
10,170
100.0
7,244
3,638
476
34
9,041
903
215
11
88.9
8.9
2.1
0.1
% of Sales
Catalog and Mail Order Houses
All types
Corporations
Individual Proprietorships
Partnerships
Other
Automatic Merchandising Machine
Operators
All types
Corporations
Individual Proprietorships
Partnerships
Other
Direct Selling Establishments
All types
Corporations
Individual Proprietorships
Partnerships
Other
Source:
1992 Census of Retail, Department of Commerce (1997 data to be reported in 19992000)
I-23
DISTRIBUTION OF MAIL ORDER SALES BY LOCATION OF FIRM
Establishments (number)
United States
Sales
($ Million)
Sales % Growth
1987-1992
7,773
34,580
70
Alabama
93
222
130
Alaska
12
5
-78
Arizona
146
552
114
Arkansas
93
71
--
California
882
2,309
49
Colorado
157
550
238
Connecticut
123
1,253
107
Delaware
22
383
59
District of Columbia
15
22
-7
Florida
369
2,668
162
Georgia
214
455
35
7
8
-15
Idaho
39
38
121
Illinois
331
2,339
15
Indiana
153
1,581
51
Iowa
125
146
100
96
220
105
Kentucky
104
121
122
Louisiana
96
54
-29
Maine
71
N/A
--
Maryland
112
156
99
Massachusetts
193
1,035
68
Michigan
204
338
21
Minnesota
206
N/A
--
Mississippi
73
43
-14
Missouri
210
414
3
Montana
44
40
Hawaii
Kansas
I-24
97
(continued)
DISTRIBUTION OF MAIL ORDER SALES BY LOCATION OF FIRM
Establishments (number)
Sales
($ Million)
Sales % Growth
1987-1992
Nebraska
65
414
161
Nevada
58
433
323
New Hampshire
66
314
40
New Jersey
244
1,065
24
New Mexico
65
187
266
New York
593
2,812
32
North Carolina
204
556
91
North Dakota
25
25
27
264
1,744
176
87
46
-19
Oregon
142
474
48
Pennsylvania
289
3,972
117
Rhode Island
34
194
158
South Carolina
74
86
0
South Dakota
33
85
29
Tennessee
171
274
90
Texas
392
1,453
139
Utah
61
41
-9
Vermont
54
105
8
Virginia
206
1,244
146
Washington
189
563
190
42
19
-54
Wisconsin
191
1,744
88
Wyoming
34
85
168
Ohio
Oklahoma
West Virginia
Source: 1992 Census of Retail Trade, U.S. Department of Commerce (1997 data to be
reported in 1999/2000)
I-25
TOTAL U.S.: MAIL ORDER SALES AND CONTRIBUTIONS 1998
% of
Amount
($ Million)
Consumer:
Products
Specialty
General
Merchandising
Services
Non-Financial
Financial
TOTAL
Consumer
Mail
Order
Total
Per
Capita
GNP
% of
*General
MerchRetail andise Consumer
Sales
Sales
Services
108,910
90,810
18,100
59
49
10
30
25
5
$403
336
67
1.2
1.0
0.2
4.0
3.3
0.6
**11.5
** 9.6
1.9
____
____
____
76,080
39,840
36,240
184,990
41
22
20
100
21
11
10
52
282
148
134
685
0.8
0.4
0.4
2.1
____
____
____
____
____
____
____
2.2
1.1
1.0
104,020
____
29
____
___
____
____
____
69,810
358,820
____
____
19
100
____
____
___
___
____
____
____
____
____
____
270
____
____
____
___
____
____
____
8,509,000
____
____
____
___
____
____
____
17,590,000
____
____
____
___
____
____
____
2,696,000
____
____
____
___
____
____
____
923,800
____
____
____
___
____
____
____
3,421,000
____
____
____
___
____
____
____
Business:
Products & Services
Charitable
Contributions
Mail Order Total
U.S. Population
Gross National
Product
Total Aggregate Sales
Retail Sales
*General Merchandising and Specialty
Sales
Consumer Services
* General merchandising, apparel, drug, liquor, building materials, hardware, garden supply, furniture, home
furnishings and equipment
**Excludes mail order food (food not part of denominator)
U.S. consumer mail order sales of products and services were $185.0 billion in 1998, $109.0 billion in products
and $76.1 billion in services. This represents a significant but still modest contribution to U.S. economic
activity.
 2.1 percent of gross national product
 4.0 percent of retail sales
 11.5 percent of general merchandise sales
 2.2 percent of consumer service sales
I-26
On a per capita basis Americans spent a modest total of $685 each by mail order in 1998.
Specialty mail order vendors enjoy a substantially greater share of consumer mail order product
sales (83 percent) than do general merchandising mail order vendors (17 percent).
U.S. business mail order sales in 1998 were $104.0 billion and charitable contributions were
$69.8 billion. The total of U.S. mail order/sales and contributions were $358.8 billion.
While U.S. consumer mail order product sales may appear modest on the overall scale of Gross
National Product, retail sales or general merchandise sales, they are immense as a source of sales.
Consumer mail order product sales are equivalent to 63% of sales of the top 100 specialty stores
($174 billion), more than Catalog Showrooms, Direct Selling and Vending Machines combined
($68 billion), and as much as any single consumer selling channel except mass general
merchandisers and supermarkets. It is a leading consumer selling channel for specialty
merchandising with prices under $1,000.
Remember, this information should be used as a base to build from. For current direct
marketing statistics please refer to these titles: The Direct Marketing Statistical Fact
Book the Direct Marketing Response Rate Study the Catalog Age 150 the Consumer
Directory of Mail Order Catalogs and the Business to Business Directory of Mail Order
Catalogs.
I-28