Secrets of the Catalog Master
Vol. MMVII No. 4 July 2007
(Continued--page 2)
The Third Quarter 2007 Economic Outlook
As of late June, increased caution is running through the economic performance indicators. The subprime mortgage difficulties are having a prolonging effect on the housing market and may well extend the eventual time to recovery. The private equity frenzy may be slowing; indeed, maybe a potential bubble that could have a meaningful impact on economic performance. Energy and health care are receiving Congressional lip service as is to be expected in the two-year deathless campaign season. The bond market has reversed its upside-down yield relationship and is exerting pressure on stocks. Corporate earnings continue positive, but may be slowing or declining slightly as we enter the last half of the year. There are pressures to the economy, even if they are not blatant and openly detrimental.
It seems to me that the important recognition is that the last half of this year is best used as a period of consolidation of our corporate performance and financial health. This would be a year to solidify the foundations of the business; probably not a six-month period to take unusual risk. Yet, it is also a time to continue with normal and perhaps moderately increased new customer acquisition and investment prospecting.
There are indications for a further slowing in the economy in the last half; some are now predicting economic growth at perhaps less than 2.0 percent. I continue to see a slowing economy, therefore continue to manage your business for moderate growth; continue to invest in new customer acquisition; focus on new products and merchandising; control costs; and stop any and all leaks that are dripping money away from earnings. I would also reduce debt, find productivity gains through useful new technologies, evaluate staffing levels carefully, and look at potential outsourcing opportunities.
Signs of Regional Stability or Status Quo
Region One (CT, ME, MA, NH, RI, VT)
Region Two (NY, NJ, CT, PR, VI)
Region Four (OH, KY, PA, WV)
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)
Slower (Individual states)
Region Three (PA, NJ, DE)
Region Five (KY, MD, TN, VA, NC, SC)
Louisiana
Mississippi
The Third Quarter 2007
Circulation and Prospecting Outlook and Recommendations
Synopsis
The short-term economic outlook for the catalog industry remains positive. The intermediate-term outlook remains positive for the third quarter of 2007 and the long-term outlook through 2007 remains positive.
Prospect as an Investment
For the second half planning in 2007, even with the signs of second half slowdown in the economy and in overall business, maintain normal to increased strategies for circulation and investment prospecting plans, likely not more than 10 to 15 percent. The economy is likely to slow in the second half but there are no indications or good reasons for reductions in either prospecting or customer circulation, or both, in the last half of the year; businesses and consumers continue to spend money. We would remain comfortable with modest increases in prospecting levels, particularly where small pockets of concentrated niche-related prospects can be found.
Nation At A Glance
We will stick to our mailing recommendations for third and fourth quarter planning in 2007. We caution against decreasing prospecting or customer mailings except for normal hygiene and mailing frequency improvements. Do not be deterred by the post-September postage increase and fall into the trap of reducing mailings; the end result is always diminished customer acquisition performance. Changes are in bold.
| State |
Mailings |
|
|
| Alabama |
Normal |
| Alaska |
Normal |
| Arizona |
Normal |
| Arkansas |
Normal |
| California |
Increase |
| Colorado |
Increase |
| Connecticut |
Increase |
| Connecticut-Fairfield |
Increase |
| 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 |
Increase |
| Kansas |
Increase |
| Kentucky—East |
Normal |
| Kentucky—West |
Normal |
| Louisiana—North |
Evaluate locally |
| Louisiana—South |
Evaluate locally |
| Maine |
Normal |
| Maryland |
Increase |
| Massachusetts |
Increase |
| Michigan |
Normal |
| Michigan—Up.
Pen. |
Normal |
| Minnesota |
Increase |
| Mississippi—North |
Evaluate locally |
| Mississippi--South |
Evaluate locally |
| Missouri—North |
Normal |
| Missouri—South |
Normal |
| Montana |
Normal |
| Nebraska |
Increase |
| Nevada |
Increase |
| New
Hampshire |
Normal |
| New
Jersey—North |
Increase |
| New
Jersey-South |
Increase |
| New
Mexico—East |
Normal |
| New
Mexico—West |
Normal |
| New
York |
Normal |
| North
Carolina |
Increase |
| North
Dakota |
Increase |
| Ohio |
Normal |
| Oklahoma |
Normal |
| Oregon |
Increase |
| Pennsylvania—East |
Increase |
| Pennsylvania—West |
Increase |
| Puerto
Rico |
Normal |
| Rhode
Island |
Normal |
| South
Carolina |
Normal |
| South
Dakota |
Normal |
| Tennessee—East |
Normal |
| Tennessee—West |
Normal |
| Texas |
Normal |
| Utah |
Normal |
| Vermont |
Normal |
| Virgin
Islands |
Normal |
| Virginia |
Normal |
| Washington |
Increase |
| West
Virginia-East |
Normal |
| West
Virginia-West |
Normal |
| Wisconsin—North |
Increase |
| Wisconsin—South |
Increase |
| Wyoming |
Normal |
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