Housing Market Deflation Correlates With Zip Code Forensics

Don Libey forwards us this map of the United States as illustrated in the NY Times (see via this link, related article here), illustrating states with high "debt to value" ratios.

His question ... does this data correlate with Zip Code Forensics?

The answer ... yes.

We can match state-level data to the zip-level data in Zip Code Forensics. Statisticians would point out the flaws associated with doing this. Point taken.


Catalog Crazies, the most productive zip codes in the United States, have an average debt-to-value ratio of 63.0%.

Online Bliss, among the most productive zip codes in the United States, have an average debt-to-value ratio of 63.5%.

Catalog Fans, zip codes with average productivity, have an average debt-to-value ratio of 63.8%.

Online Spend, zip codes with average productivity, have an average debt-to-value ratio of 66.2% (oh oh, a trend is beginning).

Catalog Preference, zip codes that perform well below average, have an average debt-to-value ratio of 67.8%.

Online Preference, zip codes that perform well below average, have an average debt-to-value ratio of 69.0%.

In other words, Zip Code Forensics identifies regions that have customers who, on average, have an additional four to six percent equity in their homes. These customers are less impacted by the mortgage/housing crisis, and therefore, have more money to spend on other things.

And you can have access to this data for free! Contribute your anonymous annual sales data by zip code by channel to the database, and you'll receive this segmentation system. If you do not wish to contribute your data, the cost for an annual license is $5,000.

Download the paper to learn more.

The Day E-Commerce As We Knew It Died

Of course, e-commerce didn't die today.

But symbolically, e-commerce changed today, with the ousting of Yahoo! CEO Terry Semel and a New York Times piece about the end of rampant e-commerce sales growth.

Both stories point to the maturation of the online channel.

To me, the New York Times article is particularly delicious, drawing the ire of Shop.org and various e-commerce bloggers (here, here and here), all quick to defend their channel at the first hint of criticism or sales slowdown. To be fair, the criticisms are valid and even enlightening --- but it was fascinating to see how defensive some of the responses have been.

Those articles and comments look an awful lot like the musings of catalog executives between 1999-2003. Catalog folks were defensive, quick to defend the catalog channel when e-commerce pundits predicted doom for anything not associated with the online experience.

In reality, the data used in the study has been readily available from Forrester Research for years, and publicly traded companies have repeatedly talked about this slowdown over the past year, so this news isn't news.

Over the next three years, our profession will see a separation in talent. As e-commerce growth becomes harder and harder to achieve, management is going to need e-commerce folks who are skilled, maybe "gifted" at driving sales.

For the past decade-plus, multichannel e-commerce executives benefited from the efforts of their catalog and retail leaders. The catalog executive mailed catalogs, the customer shopped on the internet. The online executive received hefty bonuses, the catalog executive was fired.

The retail executive spent decades building a brand, the online executive received credit for sales cultivated through years of positive retail experiences. With e-commerce maturing, it will be up to the e-commerce executive to stand alone, to drive incremental sales increases without the benefit of seasoned leaders in other channels pushing free, incremental sales to the online channel.

There are hundreds of really good, really talented online executives at multichannel companies. These folks honed their craft, while learning how to get things done politically, while learning offline marketing skills that transfer to the online world.

These online executives will have a tremendous advantage. These are the folks who will continue to drive true incremental sales increases over the next three years, while other online businesses flatten-out, or flounder.

June 18, 2007. The day e-commerce as we knew it died.