A Monday Morning Prognostication from the Office of the Wizard of Ads
Nov. 17, 2000 – Twice, the police have banged on the door and told you to turn down the stereo. Now they’re towing all the cars parked in front of your house and say that if they have to return, they’re going to start leading people away in handcuffs.
Face it, the party is over. It’s time to go home.
I’m talking about the economy.
In April, the US Census Bureau reported a sharp decrease in retail sales immediately after the tech stocks did the Humpty Dumpty on Wall Street. With 20/20 hindsight, it’s easy to look back and see this as the first warning “banged on the door” of America’s retailers. June and July weren’t too bad for retailers, then the cops banged on the door again in August. But September’s retail sales were generally strong, so we forgot about the warnings. Then, in October, “they started towing cars.” According to Wednesday’s Bloomberg News, “Consumer confidence plunged last month to its lowest level in a year.” Writing for the New York Times, Jamie Paton opened his story that same day with these words, “A number of retailers, including discount giant Wal-Mart, acknowledged Tuesday that an apparent slowdown in consumer spending…” During an interview, Wal-Mart CEO Lee Scott spoke of “a challenging retail environment.”
Rising interest rates, higher fuel prices, a lackluster stock market and an idiotic presidential race that is spinning on 300 votes in Florida; well, it’s not a good beginning for a story that you are hoping will end “and they lived happily ever after.”
Now before you start typing that note of reprimand, chiding me for “not being more positive,” let me remind you that my pay is directly tied to the growth of my client’s businesses. Although I am extremely positive, I’m not delusional. I’m not projecting my pay to jump at the end of 2000 quite like it did at the end of 1999.
My longtime clients are calm and confident, knowing that they’ve built their businesses on the strongest possible foundation and that they are much better prepared than most of their competitors to weather any storm that may come. One of my newer clients, however, called me on Wednesday to complain that wealthy people were not buying his most expensive items as aggressively as they did last year. He was convinced that the advertising was to blame. In his column for TheStreet.com, analyst Bill Meehan said exactly what I wish I could have said to my angry client. “It’s the Economy, Stupid. Stop looking for scapegoats.”
Never before in my twenty-plus years in advertising have I suggested that my clients revise their projections for the Christmas season. However, it is now my humble opinion that any retailer who is able to put together a Christmas season that equals or exceeds Christmas 1999 should receive a trophy and a thundering round of applause.
I really, really hope that I’m wrong about this, but I fear that I’m not.
Roy H. Williams November 17, 2000