A World of Opportunity
What's more, the proliferation of credit cards has grown, particularly in Europe, where 85 percent to 90 percent of the consumer population has a major credit card. The ability to collect payment by credit card eliminates many of the currency problems experienced by catalogers in the past; credit cards facilitate online selling as well.
All told, there is tremendous opportunity for growth outside U.S. borders. More than 95 percent of the world's population lives outside the United States, and, thanks to advances in technology and communication, these consumers are becoming more global.
Adjust Your Business Model
These fluctuations in the global economic environment and the rapid growth in technology should give marketers reason to pause, and adjust their business models to reflect these changes.
Right now, "the biggest challenge for mailers is to re-adjust their business models to account for more realistic, long-term response rates," says Katz.
"If you look at the United States as a model, over the last 15 to 20 years, mailers have come to accept lower response at higher costs, and have adjusted their models accordingly. They've figured out ways to save money and still make it work for them."
Richard Miller, managing partner of Market Response International, a direct response consulting firm, concurs: "You have to match up demographics with your product and be prepared for a longer wait for a return on investment. Marketing overseas is not a short-term profit gain, it's a long-term growth gain. Those who hang in there, in the end, will probably do very well."
In addition to a worldwide economic slowdown, U.S. marketers also need to adjust to rapid advances in technology. "From a pure operations point of view, the Internet has been one of the great benefits of global direct marketing, and has also been the undermining factor of doing business as usual," says Arthur Heydendael of New York-based Probe Communications International. He explains: "The cost of … sending a message is so inexpensive that it basically undermines every business model we've been brought up in."