Editorial: Year to Rebuild

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It doesn't sound like people have set too many wild, unattainable expectations for 2003. Economists project a slow, steady growth -- and that's just what we need. After two years of cost-cutting, companies know they have to put some money into rebuilding their businesses. However, despite the corporate scandals and bad earnings, 2002 wasn't all doom and gloom. The economy grew 3 percent in the first three quarters, and nothing suggests a change for the fourth quarter, The Wall Street Journal reported last week.

With postal rates holding steady at least a year (and maybe three or more!), the mailing world is set to see some growth, too. The U.S. Postal Service still expects a slight uptick in volume as it banks on mailers loosening their budgets. The industry agrees, as consumer and business-to-business mailers are adding modest increases to their prospecting circulation. "Over the course of the last two years, house file mailings have increased," Mokrynski's Steve Tamke told us. "But there's only so far that can take you, so now there is a lot more concern about the need to rebuild customer files." A study by the London Business School for French marketing agency Havas SA last month found that more money will move to direct mail and the Internet this year because of their ability to target and track response rates. Those surveyed said they think the shift from traditional advertising is permanent.

E-commerce saw another year of double-digit growth, with online sales topping $47.98 billion last year, according to BizRate.com. Online sales were the lone bright spot in the holiday shopping season. BizRate said consumers spent $7.92 billion between Nov. 25 and Dec. 25, up 23 percent over 2001's holiday season. Even brick-and-mortar retailers that did well said they did even better online. Sharper Image saw its Internet sales jump 68 percent while sales from its catalog and infomercials rose 36 percent.

Still, the industry faces major hurdles in the coming months. Most notably, adjusting to the Federal Trade Commission's national do-not-call list, which could get half the country to sign up, American Teleservices Association's Matt Mattingley warned last week during PBS' "NewsHour With Jim Lehrer." Also an issue this year is the collection of remote sales tax since the Internet tax moratorium is set to expire Nov. 1.


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