Secrets of the Catalog Master
Vol. MMVIII No. 5 July 2008
(Continued--page 3)
The Third Quarter 2008 Economic Outlook
The economic outlook continues to soften as the third quarter gets underway. All regions of the country remain in a generalized economic slowdown with little growth in GDP. Inflationary pressure related to energy and food continues to be serious.
The credit/mortgage/housing difficulties have spread deeper into the market with many families facing loss of their homes if jobs are lost due to the slowdown. This could escalate if the economy contracts further as we leave the normally active summer housing construction and sales period which has turned out to be depressed.
Still—as we saw earlier—within the continuing and deepening troubled economic outlook, the evidence is that the multichannel and direct marketing industry performs better than retail, and business-to-business markets continue to deliver a modest performance for the year.
The fall budgets and circulation plans are done or nearing completion. Our recommendations below signal our belief in the inherent strength of the direct marketing channels and our now two-year long admonition to always invest in new customer acquisition, and particularly in a period of difficult economic performance.
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 Third Quarter 2008
Circulation and Prospecting Recommendations
Synopsis
The short-term economic outlook for the catalog industry in the third quarter of 2008 continues weakly positive. The intermediate-term outlook is turning to weakly positive for the fourth quarter of 2008 and the long-term outlook for 2009 is also moderating to weakly positive.
Within the direct marketing channels, I see overall catalog and mailing performance growth at the 2-3 percent level and overall online marketing growth at the 5 percent level.
Investment Prospecting
For the third and fourth quarters, we continue to encourage careful review of your investment prospecting plan and your attempts to remain in the market for new customers. It is fair to say 2008 is essentially over and the outcome is likely to be the slow year we have suggested earlier. It is time to complete the diligent analyses of financial performance—under a variety of economic scenarios—for 2009 while attempting to productively remain in the market for new customer acquisitions.
Looking ahead to the third and fourth quarters, I would continue to encourage a modest expansion in prospecting and a solid contact strategy to the customer files.
Nation At A Glance
There are no recommended changes for the balance of the second quarter mailings. Our recommendations remain at “Normal Mailings” nationwide.
| 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 |
Normal |
| 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 |
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 |
Normal |
| West
Virginia-East |
Normal |
| West
Virginia-West |
Normal |
| Wisconsin—North |
Normal |
| Wisconsin—South |
Normal |
| Wyoming |
Normal |
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