Secrets of the Catalog Master
Vol. MMVIII No. 3 April 2008
(Continued--page 2)
The Second Quarter 2008 Economic Outlook
As of mid-April, the economic outlook continues to slow and looks to continue through the summer. All regions of the country have experienced the economic slowdown and the nation appears to be heading into a period of no growth in GDP or, perhaps, a contraction in GDP. The Leading Indicators are not signaling encouragement for the second half of the year at this point.
It should be mentioned that the financial/credit market is very much out of whack and dangerously stressed, not only in the U.S. but globally. This is due to both long term and short term influences. Long term, the U.S. is experiencing the results of a 50-year, post WWII shift that has focused on almost entirely on business gains rather than social needs. The short term influence is the effect of an unregulated, new financial instrument market, such as derivatives, which is so sliced and diced that nobody understands or has an analytic grasp of risk. This sector of the market has gone out-of-control and off the tracks. Couple the long term and short term influences and we have a dangerous economic climate that will take years to repair.
Oddly, within the current troubled economic outlook, the evidence is that the multichannel and direct marketing industry is performing reasonably well, particularly business-to-business. There are many failing consumer businesses, but the business-to-business sector appears to be holding up rather well. I am told that prospecting, list activity, and mailing expansion is in pretty good shape; similarly, it seems the bulk of B2B companies are having at least moderate growth (in the 3-5 percent area).
Signs of Regional Stability or Status Quo
None
Flat or Slower
Region One (CT, ME, MA, NH, RI, VT)
Region Two (NY, NJ, CT, PR, VI)
Region Three (PA, NJ, DE)
Region Four (OH, KY, PA, WV)
Region Five (KY, MD, TN, VA, NC, SC)
Region Six (GA, AL, FL, LA, MS, TN)
Region Seven (IL, IN, MI, WI, IA)
Region Eight (MO, IL, IN, KY, TN, LA, AR)
Region Nine (MN, WI, ND, SD, MT, MI)
Region Ten (KS, CO, MO, NE, NM, OK, WY)
Region Eleven (TX, LA, NM)
Region Twelve (CA, UT, AZ, NM, OR, WA)
The Second Quarter 2008
Circulation and Prospecting Recommendations
Synopsis
The short-term economic outlook for the catalog industry in the second quarter of 2008 is weakly positive. The intermediate-term outlook is moderately positive for the second half of 2008 and the long-term outlook for 2009 is also moderately positive.
While essentially positive, the outlook is less positive for growth than it was in February and March. I would lower my estimate for economic growth to less than 1.5 percent for 2008, likely down to zero or negative growth. Within the multichannel direct marketing industry, I expect no more than 3 to 5 percent growth overall for 2008, perhaps only 2-3 percent. Within the channels, I see overall catalog and mailing growth at the 2-3 percent level and overall online marketing growth at the 6-7 percent level.
Investment Prospecting
For the second quarter and the summer months, we continue to recommend a careful review and study of your investment prospecting plan and an attempt to remain in the market for new customers.
Looking ahead to the third quarter, I would encourage a modest expansion in prospecting and a solid contact strategy to the customer files. There may be benefit in looking at varying your allocations of search engine marketing, pay-per-click, email, and other contacts.
Given the modest postage increase due to the Postal Reform and the efforts of the American Catalog Mailers Association, the last half of the year will not as difficult as last year.
Nation At A Glance
There are no recommended changes for the balance of the second quarter mailings.
| State |
Mailings |
|
|
| Alabama |
Normal |
| Alaska |
Normal |
| Arizona |
Normal |
| Arkansas |
Normal |
| California |
Normal |
| Colorado |
Normal |
| Connecticut |
Normal |
| Connecticut-Fairfield |
Normal |
| Delaware |
Normal |
| District
of Columbia |
Normal |
| Florida |
Normal |
| Georgia |
Normal |
| Hawaii |
Normal |
| Idaho |
Normal |
| Illinois—North |
Normal |
| Illinois—South |
Normal |
| Indiana—North |
Normal |
| Indiana—South |
Normal |
| Iowa |
Normal |
| Kansas |
Normal |
| Kentucky—East |
Normal |
| Kentucky—West |
Normal |
| Louisiana—North |
Evaluate locally |
| Louisiana—South |
Evaluate locally |
| Maine |
Normal |
| Maryland |
Normal |
| Massachusetts |
Normal |
| Michigan |
Normal |
| Michigan—Up.
Pen. |
Normal |
| Minnesota |
Normal |
| Mississippi—North |
Evaluate locally |
| Mississippi--South |
Evaluate locally |
| Missouri—North |
Normal |
| Missouri—South |
Normal |
| Montana |
Normal |
| Nebraska |
Normal |
| Nevada |
Increase |
| New
Hampshire |
Normal |
| New
Jersey—North |
Normal |
| New
Jersey-South |
Normal |
| New
Mexico—East |
Normal |
| New
Mexico—West |
Normal |
| New
York |
Normal |
| North
Carolina |
Normal |
| North
Dakota |
Normal |
| Ohio |
Normal |
| Oklahoma |
Normal |
| Oregon |
Normal |
| Pennsylvania—East |
Normal |
| Pennsylvania—West |
Normal |
| Puerto
Rico |
Normal |
| Rhode
Island |
Norma |
| South
Carolina |
Normal |
| South
Dakota |
Normal |
| Tennessee—East |
Normal |
| Tennessee—West |
Normal |
| Texas |
Normal |
| Utah |
Normal |
| Vermont |
Normal |
| Virgin
Islands |
Normal |
| Virginia |
Normal |
| Washington |
Normal |
| West
Virginia-East |
Normal |
| West
Virginia-West |
Normal |
| Wisconsin—North |
Normal |
| Wisconsin—South |
Normal |
| Wyoming |
Normal |
Back
Pages: 1 2
