Three years ago, Eileen B. Claussen was looking for a swing set for her two children. "We quickly found there was no single local place we knew of where we could buy good swings," she said. Not only was there a limited selection of sets at area stores, but those that were being offered were of poor quality and too expensive.
So, on top of her full-time job in the federal government, Claussen decided to become an independent mail order dealer for two swing-set manufacturers, operating out of her home. "We had a phone and a post-office box -- that was all."
Today, Claussen's part-time venture has grown so much that Turtle Park Toys sells not only swing sets but also a wide variety of educational toys, promoted in a 32-page catalogue. Business -- which is "now well into six figures" -- has increased so much, that Claussen has had to move the operation from her home to a small three-room office on Wisconsin Avenue. She still has her full-time job, doing most of her work "between 10 and 12 at night." Her mother handles the bulk of the day-to-day operations.
"We thought we were doing well the first year, but between the first and third catalogue, sales have increased five times," she said. Demand from local customers has been so great that Turtle Park toys has opened its office to the public for a few hours a week so its loyal clientele can buy items on the spot, instead of through the mail.
Claussen is just one of a score of local entrepreneurs cashing in on the booming mail order business. Like hundreds of other entrepreneurs across the country, local businessmen and women are discovering that the mail order business is the fastest growing segment of the retail industry, expanding almost twice as fast as the traditional over-the-counter business.
"Even in the 1980s, a period in which economic indicators such as consumer spending and employment fell to post-Depression lows, mail order markets -- though adversely affected -- managed to substantially increase sales," noted Maxwell Sroge, a publisher of mail order statistics and newsletters.
During the past Christmas season, when most department stores reported modest sales increases -- in the low single digits -- mail order businesses reported sales growth of 20 percent or more. Some companies had even bigger gains. Bloomingdale's, for instance, saw mail order sales increase by 80 percent while its traditional retail sales climbed only about 10 percent, Sroge said.
Since 1980, mail order sales have increased by about 50 percent, from $29 billion a year to $44 billion last year, according to Sroge. Direct-mail experts say that today about one in 10 purchases made in the United States is made through the mail. By 1990, they estimate that one in four purchases will be done through the mail.
"You can summarize the reasons with a simple formula of four T's," said Sroge. "Time, which everybody has too little of; traffic, which everyone has had too much of; training, which retail sales people don't have enough of, and trouble, which conventional in-store shopping is full of."
Mail order shopping has been around for more than 113 years -- ever since Montgomery Ward mailed a one-page flyer to Midwestern farmers. But the business took off in the late 1970s, thanks largely to the rise of the two-income family.
"The basic success of mail order business is due to the advent of the working women who don't have time to go shopping like they used to," said Charles B. Howard II, president of The Sporting Life Inc., an Alexandria company that started as a small Georgetown boutique but turned into a mail order business after finding more success and profits in selling through the mail.
Using a catalogue to shop has been made easier by toll-free telephone numbers, which many companies have installed to receive orders. That, plus the acceptance of credit cards, helps account for the increasing popularity of mail order shopping among consumers, explained Walter J. Salmon, a professor at the Harvard Business School.
Last year, more than 6,500 companies or institutions took advantage of this popularity and mailed out about 7 million catalogues to American consumers. Among the largest senders from this area were the Smithsonian Institution and other nonprofit organizations. But a growing number of private companies also are joining the business.
This year, even more companies are expected to try to cash in on this increasingly popular business, which just four years ago had only 4,000 companies. The increase is worrisome to those already in the business.
"There is a problem with the way the mail order business has mushroomed," said Richard J. Hindin, president of Britches of Georgetowne. "There is a universe of about 10 million names out there, and all these companies trade the same names among themselves. So if a customer orders from one catalogue one year, he or she may receive 100 in the mail the next year," Hindin said. Ultimately, that will not only make business more competitive and tougher for mail order companies, but it also threatens to turn off the customer.
If any company should know the problems of mail order, it is Britches, which has decided to quit the catalogue business even though it once accounted for about 15 percent of the chain's business.
"1984 was our last catalogue," Hindin said. "We figured the response to the catalogue could carry our expenses, but it didn't work out that way. You have to send out such enormous numbers of catalogues to break even."
The decision represents a sharp strategy reversal for Britches, which only two years ago said mail order would be the vehicle through which it would transform the local clothier into a nationwide chain. Hindin said the company still intends to expand into new markets but will do so by opening new retail stores. Six new stores are planned for 1985. "We decided we could be more successful opening up retail stores," Hindin said, noting that the mail order business is not as easy as it seems.
"The closing dates and buying cycles are different" than those for a retail store, he noted. So, too, is the inventory. What sells in the catalogue does not necessarily sell in the store and vice versa, mail order dealers point out again and again.
"In order to be successful, a retailer has to run it separately from its retailing division," Hindin said. "We were running it as an adjunct to our retailing business. It would have cost $3 million to $4 million to build a separate facility and invest in a new fulfillment center."
Mail order industry officials note that Britches had one major strike against it as a mail order business -- it sold primarily to men, but mail order customers are predominantly women.
That's one reason why Sporting Life has changed its entire merchandise line since it began 12 years ago. Howard, an avid duckhunter, decided to open up a Georgetown store specializing in wildlife art and related gifts after he got tired of being a stockbroker. "I decided to do a catalogue, as a promotional tool to get people to come into our retail store. I never had any idea that I would go into the mail order business," he said. The catalogue sparked a surprising amount of business, enough to continue it year after year. Howard began offering a variety of sportswear, mostly for men, with a smattering of items for women. "The numbers have led us into the ladies' apparel business," Howard said, noting that women's clothing has consistently sold the best. Today, his 32-page catalogue features primarily women's clothes -- from $25 to $425 -- with just a few men's clothes for nostalgia's sake.
As his mail order business grew in importance, Howard eventually decided to sell his Georgetown store. That store, and 10 others that hold Sporting Life franchises, continue to operate under the Sporting Life name, selling goods similar to those offered in the catalogue.
"On the surface, mail order business seems like an easy business. It is anything but," he said. Still, Howard is not complaining -- revenue has grown from $1 million to $8 million since he entered the mail order business in earnest five years ago. This year, Howard said he expects to make $500,000 in profit -- and more down the road as he gets to know the business better.
Despite increased competition from new catalogue houses, Howard is optimistic about his company's prospects for growth and is currently talking to investment bankers about selling company stock to the public later this year. The money raised from the public stock sale would be used to expand the business and perhaps to buy another catalogue house as well, he said.
Moss Brown, which began as a Georgetown running-goods store and blossomed into a national mail order success, also has decided to slow down its rapid growth and expand through retail outlets instead of mail order, for the moment.
Moss Brown's catalogue sales took off after the company began designing and manufacturing its own line of running clothes and shoes, making the retail outlet only a small fraction of the business. Today, the company does about $9 million in business a year. "We've had 110 percent a year compounded growth over the last five years," said Joe Moriarity, Moss Brown's vice president in charge of merchandising. "It's time to slow mail order down a little bit -- to 20 to 30 percent growth a year. It's time we concentrate on our stores." As a result, Moss Brown plans to open one new unit a year -- outside of Washington -- over the next five years.
In the meantime, other area retailers are putting increasing emphasis on the mail order business. Chief among these is Garfinckel's, the area's largest mail order company in terms of volume. Although the company declined to disclose figures, Sroge estimated that for 1983, the last year for which figures are available and the third year after the company entered the mail order business in earnest, Garfinckel's sold $17 million worth of goods by mail.
For large retailers such as Garfinckel's, it is easier and cheaper to expand nationwide through catalogue sales. "You can go into geographical areas where you have no physical presence and easily gain a national constituency," said Roberta Wexler, director of communications for the Direct Marketing Association.
As a result, Wexler noted, department stores, such as Garfinckel's, have targeted mail order as one of their fastest growing segments. "Bloomingdale's began marketing by mail three years ago. It has become so successful that it may soon be the company's second profit center, next to the main store in Manhattan," she said.
Not only the large retailers are interested in mail order.
"We were looking for new ways to go with the business," said Victor Siegel, president of D.C.-based hardware store W. S. Jenks & Son. "Mail order looked logical because a retail store was too much trouble. This way, all you need is a warehouse, and you don't have to handle customers personally unless you run into problems." Jenks sends out two specialty catalogues -- one of woodworking tools and machinery; the other, electronic tools and testing equipment.
At Camalier & Buckley, the mail order division has become "one of the more significant stores" for the seven-store chain, according to President Davis Camalier. "It is one of our biggest sources of sales," he said.
Lowen's Imaginative Playthings in Bethesda is also trying to branch out through mail order. "What prompted me to go into mail order was the loyalty of our customers in the retail store," said owner Scott Goode. "In the Washington area, there are so many transients, that we used to get phone calls from people who used to shop with us but have moved to Saudi Arabia or Oklahoma, complaining that they couldn't get the merchandise we sold. They kept asking for our catalogue. It got a little embarassing after a while to say we didn't have one."
It hasn't been as easy as Goode had thought. "If I knew what I know now, I probably wouldn't have gone into it two years ago. It's expensive as hell, with the production costs, printing costs, art direction, paper costs and postage fees."
It is also difficult to figure out what will sell well in the catalogues. For example, one of the store's best sellers is an expensive porcelain doll, but no one bought it through the catalogue. That was probably because people couldn't touch it, Goode surmised. On the other hand, he said he was surprised at the number of arts-and-crafts kits people bought through the mail -- probably because they were better displayed than in the stores.