Secrets of the Catalog Master
Vol. MMV No. 8 December 2005
(Continued--page 2)
The First Quarter 2006 Regional Economic Outlook
As the New Year begins, perhaps we will be spared from further natural disasters and the nation will begin moving back to something resembling normal. The big news that looms fairly large on the economic horizon at the end of November is the apparent end of the housing boom now being reported by a variety of sources, including the National Association of Realtors. It remains to be seen what impact this will have on the economy as a whole, but it could be a significant influence.
The fairly startling (albeit predicted several years ago) evidence that online shopping will grow very robustly this holiday season and retail shopping will be flat or declining points further to the mantra of multi-channel marketing. It seems to be accelerating at a rate faster than the most optimistic predictions. Once again, I am visited at night by the Ghosts of Malls Past. What happens to all those overbuilt retail Cities of the Dead?
At this point, there appears to be nothing (other than a continuing and disturbing drop in the leading economic indicators, particularly consumer and business confidence) to presage either an upturn or downturn in the economy for the first quarter of 2006. All appears satisfactory and the moderate growth rate continues with online and direct marketing filling the lead roles.
The private equity groups with gazbillions of dollars continue to devour any multi-channel direct marketing niche and major space they can find to buy. Our industry is attractive and the multiples of earnings are quite frothy in recent transactions. Perhaps this is the top of the market for direct marketing acquisitions. We will have to wait and see. One thing is clear: the smart money is still positive on catalog and online and the money is still flowing and there is no sign of a slow down in prospecting and growth. Winston Churchill is alive and well!
Signs of Regional Stability or Status Quo
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)
Slower (specific states in this edition)
Louisiana
Mississippi
While some may find the above evaluation to be optimistic, the most recent Federal Reserve Beige Book report was actually fairly upbeat on the regional economies, particularly after a period of trauma due to natural disasters. We believe the States of Louisiana and Mississippi will continue to lag, perhaps for many years, and so we separate them from their respective regions and urge you to review mailings into those states almost on a county-by-county basis. Some parts of Florida, Alabama and Texas could also benefit from local mailing scrutiny, as well.
The First Quarter 2006 Circulation and Prospecting Outlook and Recommendations
and Recommendations
Synopsis
The short-term economic outlook for the catalog industry continues to be positive if not wildly robust, likely through the entire first quarter of 2006. There continue to be signs of slowing emerging in the leading indicators, but as yet little moderation or slowing of the economy either in the fourth quarter 2005 or predicted for the first quarter of 2006. The intermediate-term outlook remains positive for the first half of 2006, and the long-term outlook through 2007 remains positive. This outlook is dependant upon the effects of the housing engine short term and any energy shocks during the winter.
Continue Prospecting
As the year turns, I continue steadfast in my Churchillian position: Never, Never, Never Give Up. Continue maintaining growth strategies for circulation and prospecting plans and do not allow new business momentum to falter or slacken without overwhelming evidence of a decided economic change. Eschew timidity and tentativeness in prospecting decisions for the new year. Mail More!
Nation At A Glance
We can now return to a post-Katrina strategy and resume our normal and increased mailing strategies in most of the regions of the country with the lone exceptions of Louisiana and Mississippi. Changes to circulation recommendations through the First Quarter 2006 and are highlighted in bold.
