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Libey Incorporated
Economic Outlook
Secrets of the Catalog Master
Vol. MMV No. 4 July 2005
(Continued--page 2)
The Third Quarter 2005 Regional Economic Outlook
The economic activity in the regions has been up and down, improved and impaired, pressured and inflated: in short—difficult to gauge. It’s just an odd year, filled with dichotomy. When it seems the economy is slowing, it picks back up. When it seems oil prices have won, oil prices drop. When it seems the housing bubble is about to break, the housing market sets all new records. If there was a summary statement that would likely apply through September, it would be Damn the fears . . . Full speed ahead! Success continues to be ninety percent motion; do something and don’t dwell on and obsess about what ‘might be’ under every possible scenario. That’s dithering and it’ll rob your soul of spirit and business of growth. Remember the very successful direct merchants who started businesses back in 1973-1976 when interest rates were 17 percent and inflation was approaching 20 percent.
We believe strongly that multi-channel direct marketers should pursue prospecting and customer contacts reasonably aggressively, through the summer months and into the coming fall season. We remain positive for the third quarter 2005 outcome and the balance 2005. All regions continue to remain positive, even though at a slightly reduced rate of growth than we saw in the first and second quarters of 2005.
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)
Mixed to Slower
None
The Third Quarter 2005 Circulation Outlook and
Recommendations
Synopsis
The short-term economic outlook for the catalog industry continues to be reasonably positive through the third quarter of 2005. There continue to be are some diffuse signs of slowing emerging, especially in manufacturing, big-ticket items and autos, which may indicate moderation in the late third quarter. The intermediate-term outlook is positive for the balance of 2005 and into 2006, and the long-term outlook through 2007 remains positive.
Keep Prospecting
I will repeat my May recommendation, almost verbatim:
Once again, perspective is essential. If you will think back over the years and recognize how many companies have regretted their short-term decisions to pull back in either economic downturns or periods of uncertainty, you will reflect again on the reality that reducing prospecting and house mailings at any time is always a strategy for slowing the growth and profitability of the business longer-term. The savings of a few thousand dollars in times of uncertainty or cloudy economics can result in the loss of many more thousands of dollars in future profits and business valuations. Multi-channel marketers are having exceptional results through the end of June. They have invested in advanced online marketing and have wisely continued to support, grow and invest in their catalog businesses because they understand, know and believe that those catalogs are driving substantial number of online orders. If the waffling media and the inept politicians create doubt and division, it’s about money and power. Our jobs are about focus and consistency. Those are the qualities that deliver increased corporate valuation. The point: Prospecting in all channels isn’t an optional strategy; it is a constant strategy that produces profits.
Nation At A Glance
The detailed economic conditions for each state have been integrated into the following recommendations. Changes to circulation recommendations through the Second Quarter 2005 are highlighted in bold italics. A number changes are recommended for the second quarter, all shifts from Normal to Increased mailing.
