Gone Too

I’ve been wanting to write this posting for more than six months, but was waiting for the right occasion – which occurred last week. More on that in a minute.

Do you remember the dot.com meltdown of 1997 to 2001?  During this time, many new online companies were founded and quickly failed, some in spectacular fashion. They spent money like there was no tomorrow, mostly on foolish extravagances.

I see a similar catalog meltdown coming, but with a specific sub-class of catalogs. There are about a dozen catalogs, mostly men’s, and all started since 2007, that are aimed at the urban logger, city-living rural camper, all-around country-loving upscale guy.  These catalogs include Rail Riders, Huckberry, United By Blue, Jonnie-O, along with several others.

The right occasion that occurred last week was the announcement by one of these catalogs – Ibex – that they were going out of business and closing down at the end of the month. I hate to admit this, but Ibex was not only located in Vermont, but located in the same small town as Datamann. However, despite several offers to work with them, they never sought our advice or assistance. They did not subscribe to this blog.

What made Ibex’s departure so predictable was clearly evident from looking at their website. First, they had nothing unique about their products. They were just one more company selling earth-toned wool underwear, sweatshirts and hoodies. Absolutely nothing special about the stuff, except that the company was located in Vermont, where they think pure thoughts while packing your order.

The true tip off to me that these guys would not last was the page on their website that listed the “dogs of Ibex”, and showed photos of all the dogs owned by people that worked there, and who brought said dogs to work. There is a no-so-complex algorithm which I developed that links the propensity for catalogs to go out of business with the number of dogs staff members bring to work.

So, another catalog gone. And we haven’t even gotten to Christmas. Usually the announcements of bankruptcy and business failure wait until after December 31, as catalogs hope that Santa and FedEx will somehow magically deliver a Christmas Miracle of sales at the last minute.

Dogs aside, there are two common traits among these upscale rural-wannabe catalogs. First, is a dearth of products. They usually have one product/page or worse, one per spread. They focus on the lifestyle nature of their product, instead of the virtues of the product as being something you would actually want. Look at the spread below from Huckberry’s Fall catalog and first, find the sweater, then find a reason to buy it.  Why do some companies make this so hard?

Or check out the spread below from United By Blue. There is ONE $12 pin on one page, and eight products on the facing page, with no product description, just product name and price.

Yes, I believe that catalogs don’t have to give lots of product detail in the catalog, and can use their websites to provide that. But this catalog gives you no reason to visit their website. This is another sign of the coming catalog meltdown – you can’t give a whole page to a $12 pin and expect to be around for too long. And yes, I understand that United By Blue has a social mission (you can read about it here), but in my opinion, that makes it all the more important to have an efficient catalog in order to fund that lofty mission.

The second common trait is their inclusion of really stupid hard goods. Almost every one of these catalogs sells an axe or multiple axes. Why is that stupid?

Both of my grandfathers had a “camp”, which in New England in the 1930s to the 1960s meant a little cabin in the woods on a small pond, with an outhouse. The only convenience that both had was electricity. My parents had a camp, as did my wife’s grandparents and parents. My brother inherited my parent’s camp, and my wife and I built our own – a small cabin in the woods. I mention all this to show my “camp” bona fide credentials. Both my wife and I have been going “to camp” for our entire lives. And the last thing in the world that I would buy for my camp is a $135 axe, not when a new chainsaw is only $300. And if you have ever split a cord of oak with an axe, you know there is no romance in it. It is not a transcendental experience. The smart campers get a log splitter.

The merchants for these catalogs live in la-la land. They are not trying to appeal to a camper, or real rural person. They are positioning their catalog to appeal to the wanna-be, whether it is a wanna-be camp goer, or wanna-be exercise hound. The problem with that is that being a wanna-be is always a short-lived fad. There is no loyalty to any wanna-be lifestyle for long.

And that is why these catalogs will fail. They are not selling the customer’s dream – they are selling the catalog owner’s dream. Their coming failure lies in having no truly unique products. They are just another lifestyle catalog selling flannel lined khakis, all going after the same customer, and all prospecting to the same tiny pool of co-op supplied names, including me.

Unless these catalogs can truly differentiate their products with something unique, something hard-to-find, and something proprietary, they will, one by one, be the victims of a coming catalog meltdown that has nothing to do with Amazon or dying co-ops. It has to do with the “irrational exuberance” that led to their founding, and which will lead to their undoing.

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

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Ted & Muffy – A Sad and Cautionary Catalog Tale

Most of you have an obsession with youth. You believe that the solution to your response problem is to appeal to a younger audience with your catalog. You have the 65-year-old woman in your back pocket, but you struggle to get her 35-year-old daughter to even look at you, let alone place an order. It is even worse if you appeal to a 45-year old, and you are attempting to acquire a 22-year old customer.

I’ve mentioned many times before that Datamann works with a number of UK-based catalogs mailing here in the US. They were all brought to us by a consultant with whom we work, who is based in London.

One of those companies was Duo Boots. Prior to 2015, they had a great catalog of nothing but women’s fashion boots, knee length and thigh length. These all-leather boots are handmade in England, and individually fitted to your foot and calf measurements.

Cool products, well made, great story and delightful catalog. For a fashion catalog, it did not stray from focusing on the products, the beauty of the products, or the craftsmanship of the boots. I’m usually not a big fan of editorial content in a catalog, but in their case, I thought it was well done. The book had a few design flaws (too much knock-out type), but in general, I loved their catalog.

Then in the fall of 2015, the Art Director sent me PDFs to review for the coming Fall season. They were repositioning the catalog to go after a younger audience. And, they were changing the catalog name to “Ted & Muffy – Fairytale Fitters”.

What? 

Below are a few of the spreads from that catalog in 2015.

I pleaded with the Art Director not to go in this direction. The consultant in London pleaded with them. Then we both begged them not to do it. We knew what the consequences were going to be. No one listened. In their mind, we were two old guys that did not understand how to appeal to the intended younger audience.

Aside from the totally bizarre creative direction, I was also concerned with the decrease in product density and a significant price increase. In addition, the products themselves were changing, with more “colored” boots.

The catalog mailed, and results, as you would expect, tanked. In 2016, they toned down the fairy tale aspect, and focused more on the boots, but still stuck with the new name of Ted & Muffy.

Sadly, things did not go well, and we learned earlier this year that the company had been placed under the administration of the bank, which luckily – and rather quickly – found new owners, that are keeping the business alive in the UK.

I’m sure there were many factors which led to the company’s downfall. The odd creative style is the most visible evidence of how the catalog drifted in a direction that alienated not only existing customers, but prospects as well. But pricing, product density, and overly trendy merchandise all contributed.

The point is this – it is really difficult to take an existing brand, especially one that is doing reasonably well (and they were doing well, at least here in the US), and think that you can acquire a totally different demographic by changing the creative, the mailing list and even the merchandise. If you are going to do all that, it’s probably better to just start a new title, and protect the core business.

I received the email below a few weeks ago. Duo Boots is back. Ted & Muffy, at least the name and the funky styles are gone. The new owners cannot be held accountable for the mistakes of the past, and I wish them well with the business.

Let the catalog brand positioning lesson of Ted & Muffy be a cautionary tale to any of you who are thinking that you can wave a magic wand over your catalog and suddenly get a younger consumer to be your new customer. It ain’t going to happen.

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

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Hubbardston

The next time you see me, I want you to thank me for the cruel fate from which I have saved you.

The first time I read one of those annoying articles with a theme along the lines of “Everything I learned about life, I learned in kindergarten”, I thought “Hey, I could do that.”  But, my idea was to tie it to catalogs.  After much thought, I finally came up with the perfect theme: “Everything I learned about catalogs, I learned while ice fishing with my father”. I labored over that posting for quite a while, not really giving much thought or concern to the fact that 95% (maybe even 99%) of you had never been ice fishing.

No matter. I knew you’d love it. When it was finally complete, I set it aside for week or so, and then reread it.

Oh, was it bad. It was awful. If I had published it, you all would have unsubscribed. I trashed it, and saved you all from the horrible fate of reading it. You should thank me.

So, since this is a holiday week for many of you, I’m going to offer an alternative to my usual view of trends in catalogs. I’m going to give you a short analysis of catalog merchandising, based on my observations at a rather unusual venue – the Hubbardston (Massachusetts) Flea Market, also known as Rietta Ranch. I’ve been going to the Hubbardston flea markets early on Sunday mornings since the late 1960s, first with my parents, and now with my son and wife. We usually go two or three times a year.

The Hubbardston Flea Market is not to be confused with its better known brethren flea market in Massachusetts located in Brimfield. The Brimfield Flea Market is an internationally recognized place for serious antique collectors. It is only held 3 times a year. The Hubbardston Flea Market is held every Sunday when it is warm enough to be outside, which is roughly May 1 to November 1.  And this is not where you come to find rare antiques. This is where people sell mostly junk.

The field where the flea market takes place is huge, often muddy, with absolutely no shade and no amenities beyond a few port-o-potties. Yet, it usually draws between 400 to 500 “dealers/vendors” each week. On top of that, it draws thousands of buyers from throughout central New England.

There are four kinds of people that sell stuff here, that relate to four kinds of catalogs.

Wholesalers that have access to new goods, which they sell cheap. Some of this stuff looks like it might have fallen out of the back of a truck (or was stolen out of the back of a truck). Picture in your mind boxes of tube socks, next to boxes of kitchen utensils, next to boxes of baby toys, and that’s what they sell. These sellers represent about 10% of the overall sellers, but based on the volume I see them doing, probably 70% of the overall sales that take place in that field.

All their products are clearly priced (more on this later), and they have products displayed so you can grab multiple pieces. To do this, these dealers have their wares spread out – which means they had to “rent” multiple spaces for the day. This is like having more pages in your catalog. They have a very efficient system of set-up and tear down. They are there every week, always with the same products.

They are like B2B catalogs – huge assortment of products, and only products where the buyer knows what it is. There is no effort to “enhance the buying experience” on the part of the vendor – they just stick out the boxes and let you poke through them – kind of like looking at page after page of work gloves. The assortment never changes because, like most B2B catalogs, they don’t feel that the needs of their customers ever change.

Collectible Dealers – There are a few of these sellers – maybe 5% of the total sellers, mostly selling collectibles like postcards, 1950s Tonka trucks, coins and baseball cards. They have rented just one “space” for the day. Every week, they drag out the same beat-up notebooks filled with coins, and old film cameras. (You won’t find any Mickey Mantle rookie-year baseball cards here – those are at Brimfield).

These tables get a lot of tire-kickers, mostly inquiries from people who want to sell these dealers even more stuff.

They are like gift catalogs – you have to look through a ton of products to find something that you might like.

“There’s One Just Like it on eBay” Dealers – these are people trying to sell the junk they found in their house, or someone else’s house, that they think is worth a fortune, because it was made before 1985, and because they saw one for sale on eBay.  These “dealers” (I use that term loosely) are also at the field every week. They usually make no effort to clean their wares, or make them presentable. They assume that you’ll see the value in their broken kerosene lantern, or Bell & Howell cassette player.

None of their stuff is priced. If you ask the price on anything, the seller will bark an almost always exorbitant price for the item, and will immediately tell you that they just saw one on eBay for three times the price, to which I always want to say, “then why aren’t you selling this on eBay?”

I have come to the conclusion that these dealers enjoy coming to the flea market for the social interaction. They are naïve in that they think everyone else is even more naïve, and that they’ll find that one buyer who is looking for a broken toaster. These dealers usually go home from the flea market with much of the same junk they came with, because no one saw the same value that the seller saw.

To me, these sellers are like the high-end catalogs that think they have a great story to tell. There is always a new crop of these catalogs coming along, and in my experience, they have a very low survival rate. The owners/proprietors have no experience in cataloging, but “believe” they know all about selling premium t-shirts for $40, or running shorts for $100. They build their catalog on “branding”, and not on real value. Of course, some buyers like this, but the majority just pass on by.

I’m Going to Sell It All:

These are my favorite type of dealers, and usually the only ones from whom I will buy. These are the dealers that don’t want to bring anything home, know how to display their “stuff” to entice a sale and who price stuff to sell.

The flea market supplies each dealer space with a “table”, which is simply a sheet of plywood mounted on some 2x4s. These sellers always bring a table cloth to spread over the plywood, to make the products stand out.  They don’t bring broken or dirty items on the “hope” that there is someone out there who is desperately looking for a used Monopoly game that is missing all the playing pieces.

More important than having every piece priced, they have every piece “reasonably” priced. They want to sell it all, but without giving it away. They don’t price it at what they think it is worth (like the guys who always quote eBay pricing), but they price it at what someone will pay for it at that moment in a dirty field in central Massachusetts. They are realistic, and will accept any reasonable offer on an item – everything at Hubbardston is negotiable – again, because they want to get rid of the stuff.

Some of you have catalogs like this. You have products priced to sell based on what the customer will pay, not based on what gross margin percent you need to make, or based on what your branding efforts dictate it should be. You are the catalogs that will continue to survive.

Sadly, you won’t ever see Hubbardston featured on Antiques Roadshow. But, it is a fun place to visit.

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

 

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What Happens To Catalogs When …

This posting is part 3 of What Is To Become Of Single Title Catalogs – Revisited 2017.

There is a great scene in the 1967 movie Guess Who’s Coming to Dinner? that speaks to where the catalog industry is today. In case you don’t recall, or have never seen the movie, Katherine Hepburn and Spencer Tracy portray a married couple whose 23-year-old daughter wants to marry Sidney Poitier, who plays the role of a black doctor, and who is equally in love with their daughter. This movie was a big deal because interracial marriage was still illegal in 17 states when it came out.

The movie takes place during an 8-hour period, as the parents of Sidney Poitier’s character, and Hepburn and Tracy, are all trying to come to grips with the idea. At one point, Spencer Tracy is talking with Beah Richards, the actress playing Poitier’s mother. She is trying to understand why her husband and the character played by Spencer Tracy are both having such a problem with this planned marriage. Tracy’s character is opposed to the marriage, and Sidney Poitier has already stated that unless he approves, there will be no marriage. Poitier’s mother says the following:

What happens to men when they grow old? Why do they forget everything? I believe…those two young people need each other…like they need the air to breathe in. Anybody can see that by just looking at them. But you and my husband might as well be blind men. You can only see that they have a problem. But do you really know what’s happened to them? How they feel about each other? I believe… that men grow old. And when sexual things no longer matter to them, they forget it all. They forget what true passion is. If you ever felt what my son… feels for your daughter, you’ve forgotten everything about it. My husband too. You knew once… but that was a long time ago. Now the two of you don’t know. And the strange thing… for your wife and me…is that you don’t even remember. If you did…how could you do what you are doing?”

When Catalogs Grow Old:

What happens to catalogs when they grow old? Why do they forget? Why do they lose the passion that brought about their being in the first place and made them successful?

The retirement of Mikey Drexler as CEO of J Crew is, as Kevin Hillstrom stated, is the end of an era. He was not only a great retailer, but a greater cataloger. His departure is an opportune time to reflect on what is happening as catalogs grow old.

I can remember going to DMA Catalog Conferences in the 1980s and 1990s, and there were always one or two great catalog “personalities” that gave keynote speeches. They didn’t talk about how they were using retargeting to drive a 2.8% lift in response.   They did not talk about their cloud computing systems. They talked about their passion for the merchandise they were selling, and the passion they had for their customers.

Most important, they talked about how there was always another dragon to slay – their personal quest was to make the catalog a great place to work, a great place for their customers to purchase products, and a successful company (meaning: profitable). The quest was all about slaying the next dragon, and the next, to accomplish all these goals, and have peace in the kingdom.

Today, catalogs seem to have as much interest in their customers as United Airlines does for its passengers. Today, it is about catching the prey, and making them pay. There is no focus on who the customer is and what the customer wants. The co-ops have an algorithm that finds viable names for you to mail. But, do you really know what those prospects value in you? Do you know what those buyers really want from you?

The quest is gone. As Beah Richard’s character says, “You have forgotten what true passion is.” For catalogs, there are still dragons to slay, but most catalogs have given up, leaving someone else to slay them.

The reason the quest is gone has two parts:

First, remember the old saying about buying computers, that “no one will ever fault you for buying IBM?”  It was the safe choice. There is an equivalent in catalogs today. It is to be predictable. It’s always easy to do the predictable. If the predictable doesn’t work, no one is going to question or blame you, because it is what you are supposed to do. If it doesn’t work, it must be the fault of the economy, weather, or Amazon.

Look at these recent catalog covers. They are predictable.

Just looking at three covers from each company you might not think that. But line up a year’s worth of these covers, and you will see that they are not only boring, but have no passion. It is not just the covers either, but the whole tired product assortment and direction of the catalog. The original founders of these titles had passion, but passion is a luxury they can no longer afford, as passion requires you to break the mold and test new things that run the risk of not working.

In the three examples above, it is easy to see my point about passionless catalogs just going through the motions to keep the presses rolling. But be honest – are your catalogs any different? When was the last time you had a customer contact you and say, “Wow, I really love what you are doing with your catalog. I can’t wait for it to come each month”?  Conversely, when was the last time a customer said, “Man, I really hate what you are doing now”? Either response from a customer would show that there was still some interest out there, and that they were at least looking at your catalog, as opposed to their phone. But I’ll bet that if you are honest, it’s been quite a while since you received either one of those types of comments. That what being predictable will get you.

The second reason that the quest is gone is that most catalog companies rely upon one thing for their continued survival – efficiency. Catalog production follows a very rigid, tight schedule which pervades almost everything a catalog does. Can’t miss a deadline at the printer, can’t risk having the books go out late. Can’t try anything new, can’t risk not making the budgeted goal for the year (even if the goal is 5% less than last year).

The big catalog conglomerates (BluStem/Orchard Brands, Potpourri Group, Cornerstone) keep acquiring more catalog titles because it makes their investment in efficiency even more profitable. But, you never see other catalog companies purchase online-only companies because those types of companies would not fit into their efficiency model – there is no synergy, no gains in productivity. “If their customers are online only, I can’t mail them a catalog, which is not going to help my co-mail pool savings, so why would I want to acquire a company like that?”

That line of thinking makes Amazon’s purchase of Whole Foods all the more intriguing. There are multiple dragons in this deal for Jeff Bezos to slay. His quest is just beginning, while many of you feel your quest is nearing twilight.

Can you learn to love selling without a catalog, by using all the tools of ecommerce?  Can you get the passion back? The first thing to do is to stop being so predictable. Then stop worrying about being so efficient.

“You knew once… but that was a long time ago. And the strange thing…is that you don’t even remember. If you did…how could you do what you are doing now?”

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

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Catalog Creative In A New World

Let me do something different today – I’m going to offer comments on a catalog that I think is doing an adequate job (that’s as complimentary as I get) from a “creative” perspective, but is certainly not a traditional catalog. I’m also going to check how they are doing against my list of 21 catalog creative rules, and in the process, illustrate why many of those rules don’t apply here.

Let me be clear, it is a catalog from which I would never purchase. It is also not necessarily catalog creative that I like, or that resonates with me – but contains “creative and design elements” that I expect resonates with the catalog’s intended audience.

The catalog is NatureBox, which is a relative new comer mailing since at least 2014, and is from what could best be described as an “online company”. NatureBox is a membership program ($50/year) that you must join, and they ship you snack food, which you have to pay for on top of the yearly membership fee. (Note: they have all kinds of deals/rebates on their website, so please don’t write to me to tell me I have their pricing wrong).  Right off the bat you are spending $50 for the privilege of buying snack food that you could buy at just about any supermarket, and most gas stations.

Not off to a good start

I received these two catalogs earlier this year, one addressed to me, one to one of my seed names.

My first reaction to this company as catalog marketing mavens was not good, since I considered the cover test they were conducting to be a classic example of a test that makes no difference.  What does it prove? How do you act on this in the future if the one on the left does better than the one on the right? I am certain that the creative director at NatureBox could explain in painful detail the difference between these two covers, and how each resonates to a different type of person. But, come on…to the average consumer, there’s no difference here, so stop doing stupid tests like this.

Don’t Tell Me About Your Grass Seed, Tell Me About My Lawn

Oh God, no! Right on page 2 – the most valuable page in the catalog – they have a President’s letter, Actually, it’s worse than that – it’s a letter from Travis, the Director of Sourcing and Innovation. Travis tells us how he likes to “discover and develop new and unique flavors”. The focus of the copy is all about NatureBox and Travis, and nothing about you, the consumer. Plus, there is no mention anywhere in the letter that this is a membership offer – oh, why be so sneaky? If you are going to waste space with a letter, don’t you think that’s the place to tell the consumer the part of about the $50, but then also explain that you get a $50 credit applied towards purchases? That’s kind of basic customer service courtesy. (The only reference to the membership is on page 27 – one lonely line of copy that says “join today – NatureBox is only $5 per month, which is credited towards your purchases”).

Between the cover and page 2, these guys are failing two of my basic rules of catalog creative, which are no dumb cover tests, and no president’s letters.

However, page 3 gets us back track, because they show their eight top snacks. That’s good merchandising – show the best stuff up front, and tell me it is your best stuff.

But, the copy, which is tiny (can’t be more than 3 point font), never tells how much you get. Do I get a bag of each snack, a box, 2 ounces, 10 ounces – what? Maybe you get the amount of product shown in the photo? That isn’t clear if that is what I get. Further on in the catalog, on the “nuts” page, each sampling of nuts is listed as 8 oz., so their labeling/merchandising is inconsistent.

However, go to their website, and it is a different story. Each product description lists in detail the serving portion.

Below is their center spread – which does no selling. Oddly, it shows 11 icons, which you can use to “shop our catalog using these filters”. But again, these “filter icons” appear sporadically through the catalog, and not on every page or product, so how do you use them to shop the catalog?

Finally – this is their exit spread (below), with again, no selling.

In a 36-page catalog, 12 of the pages, one third of the total catalog, have no selling, and six of the remaining pages are selling a single product, the highest priced of which is $3.79.

Why This Is Not So Bad

As with many things in life, one of the things which you learn as a catalog consultant is that not all rules apply to all catalogs. If this catalog were selling garden tools, this “minimalist/lifestyle” approach would not work. People who buy those types of products want specifics, and are not impressed by lifestyle imagery.

People who are willing to spend $50 just for the privilege of buying snacks are probably equally concerned with those details, but NatureBox recognizes that they cannot “seal the deal” to get you to be a member from the catalog alone. You have to go to the website to do that.

Consequently, this catalog is a 32-page web driver. Its primary purpose is to sell you on the concept of buying healthy snack food, in a convenient way, at seemingly very affordable prices, as almost all the “snacks” are under $4.00. Moreover, these customers are not taking the time to calculate the cost per pound to determine the equivalent cost at Wal-Mart.

As a marketer, the temptation for me would be to gut this catalog of those 12 non-selling pages, get the page count down to 24, and add in a ton of extra products, with longer, more detailed descriptions. That would probably be a huge mistake. The margins on the products in this catalog are probably obscene, which is what allows them to have 1/3 of the catalog not selling anything beyond a warm feeling, and force people to go to the website.

Are there creative changes I would make to this existing book? Yes, I’d stop the cover tests and get rid of Travis’s letter. But other than that, we have to recognize that this is a new world. This is an example of a catalog where the website is MUCH stronger than the catalog, which alone negates many of my “21 catalog creative rules”.

NatureBox is also an example of how an online company maxed out its ability to acquire customers online with PPC, SEO, etc. Search on “healthy snacks by mail” and you’ll discover a host of companies doing the same thing, including Graze, Healthy Surprise, and Urthbox. NatureBox’s catalog is just one more tool to reach different audiences, though sadly was mistargeted at me.

The lesson here – NatureBox’s catalog creative – with all of its drawbacks in a traditional catalog world – probably resonates with their target customer, and reinforces the concept that your website MUST be stronger than your catalog.

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

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Whose Call Is This – the CEO, Marketing or Merchandise?

Here was the question – “I’m a merchant, battling what our marketers do. In my opinion, catalog marketing optimization has its downsides, namely, blindly going where the response rates lie.  As more money is spent on the catalog, the optimization tactics our marketing department use quickly become our brand face.  Our catalog promotes an outdoor lifestyle, but because of always chasing response, our top sales drivers are more likely to be a turtleneck than a tent.  What can I as the merchant do, because I see this direction as ultimately destroying what originally made our company different?”

This question was from a reader of this blog, which I used in the Q&A portion of our catalog seminar in March. I asked Frank Oliver, our “merchant” at the seminar, to address the question. I had not shared the question with Frank previously.

As a merchant, it would have been easy for him to agree with this question, and put all the blame on marketing, as the reader who posed the question had done. But after a slight pause to consider his response, Frank replied “So, this merchant is complaining that one set of products is selling better than another, and is blaming marketing? This is not a marketing issue. Marketing does not pick what products go in the book. The CEO sets the direction for what products will exemplify the company’s “mission/brand”, and the merchants carry that direction out. Don’t blame marketing for driving response.”

“The optimization tactics our marketing department use quickly become our brand face. I’m a marketer, so I can imagine what tactics the merchant is referring to, namely using the co-ops for prospecting. If marketing instructs the co-ops to provide the most responsive names, and the co-op’s database skews towards an older consumer (let’s say 55+), then this merchant’s logic is that marketing has driven the catalog off its intended course by loading up on customers that don’t belong to the merchant’s vision of the intended customer.

I look at this a little differently. If you didn’t want to go to Chicago, why did you get on the bus bound for Chicago? If you did not want turtlenecks to become the “brand face”, why did you put them in the catalog in the first place? The reader stated that the catalog promotes “an outdoor lifestyle”. If the catalog is doing a decent job of promoting that “lifestyle”, then any product the consumer purchases gives them a connection to that lifestyle. Don’t blame marketing if the products being purchased begin to skew away from an intended or original mission for the company. The products in the catalog or on the website are there because the merchants put them there – and I’ve never met a merchant who did not think that every new product would sell well.

Besides, name a successful catalog or company where the product selection has not evolved over time. Isn’t the purpose of a company to maximize profits for the owners/shareholders? Wouldn’t that dictate that you sell the products that the customer wants, rather the ones which you think they want, or you think they should have? Yes, I know, you are going to point to Apple and quote Steve Jobs who probably said something cool about not selling turtlenecks when you could sell tents. But using this example, if your margins are sound on the turtlenecks, and the customers you acquire on turtlenecks convert to buy other products (like tents) from you, what’s the problem?

Yes, I agree that some marketing tactics can skew the composition of the audience. In the late 1980s when I took over as the marketing guy at Brookstone, I found that our prospecting strategy consisted of always offering a cheap premium (free jackknife or flashlight) with each first-time order. To drive response, the prospecting lists acquired from our rental/exchange partners (this was before the co-ops) were their “sale” buyers. All this strategy did was attract the pond-scum from everyone else’s files that wanted a free jackknife. So, this is not a new concept.

Ten years ago, the concept that the co-ops were skewing the composition of the customer base may not have been as well understood, or as evident, as my Brookstone model. But everyone in cataloging today should understand that the co-ops are skewing the composition of your buyers, certainly toward an older consumer. Can they also be skewed toward a propensity to purchase one type of product over another – certainly.  If a modeler at one of the co-ops knows that by providing you one group of names (turtleneck buyers) over another group (tent byers) that your response rate will be 10% greater, they are going to give you the higher performing names. The result of that might be more turtlenecks sold than tents.

The question becomes not how we got here or who is to blame. The question is whether you can make a course correction now. Ultimately, the companies that carve out a unique position in the market via merchandise will be the ones that survive. That may mean merchants need to prune from the product assortment those products that are commodity in nature and not in keeping with a product strategy that promotes that “uniqueness”. Of course, the CEO, and Board of Directors, must acknowledge that a move like this might mean forgoing short-term gain on the turtlenecks, to ensure long time survival by focusing on tents.

To answer the merchant’s original question as to what he can do, he can make everyone – especially the CEO – aware of the tradeoffs involved with maximizing response versus maintaining a unique identity via merchandise. And if the CEO still wants to take the bus to Chicago, at least you have made everyone aware of the consequences.

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

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