April 10, 2007

Power And Organization In Our Catalog/Online Businesses

Bubbling under the surface of the "Multichannel" evolution of the Catalog industry is a subtle shift in power in our organizations.

Certain job functions have always been important, and will continue to be important in the future. In the companies I've worked at, the Merchandising organization is the heart and soul of the business. Business is good when customers like the merchandise, business is not-so-good when customers don't like the merchandise. Therefore, Merchants will always have one of the most powerful roles in our businesses.

Some job functions are essential, regardless of the evolution of the online channel. Inventory Management, Quality Assurance, Finance, Information Technology, Human Resources, and Operations (Pick, Pack & Ship and Call Center) will always be needed.

Some job functions represent the future of our business. Online Production is critical --- getting merchandise and copy on the web is critical.

E-Mail Marketing, Online Marketing and Web Analytics represent the future of what used to be called "Database Marketing" or "Circulation". These folks are managing the way brands now interact with customers. Because these areas are in their relative infancy, they don't have a strong, strategic role in our businesses. These areas are all-too-often "silo-based", failing to view the business the way a customer views the business. These areas focus too much on individual campaigns, individual visits to the site, and response only through the online channel. In the future, these areas will improve their ability to analyze customer behavior over time, across channels. When these areas accomplish this feat, they become key strategic partners in our businesses.

Database Marketing (Circulation) and Print Production represent the history of the Catalog industry. Many of the most experienced and knowledgeable individuals in our industry work in these areas. Many of these individuals are being cut-off from the future of our business. Over the next ten years, these individuals need to upgrade skills, and somehow gain experience in E-Mail Marketing, Online Marketing, and Web Analytics. Integrated, strategic businesses combine all aspects of Print Production and Online Production. They have already integrated Database Marketing, Online Marketing, E-Mail Marketing, and Web Analytics. Employees possess skills across these disciplines in the businesses that see the future, and are reacting to it today.

Other job functions are under attack, our industry just doesn't realize it, yet. Public Relations, Brand Marketing and Creative/Copy are all being compromised in what used to be the Catalog industry. PR and Brand Marketing had a lot of control over the message. As consumers gain more control in the relationship with a brand, the PR/Brand Marketing folks will have to adapt. Creative/Copy will slowly lose the ability to tell the story to a customer. In Catalog, the Creative/Copy folks control the story via each page in the catalog. Online, there is no story --- the customer picks and chooses where she wants to go. A brand simply cannot tell a cohesive story across a thousand or ten thousand or a hundred thousand unique and dynamic web pages.

As our business model moves entirely online, the power structure of our organizations will change. In the image, lines represent established working relationships. Notice that web-based jobs are generally on the outside, lower right hand side of the image. The online production folks are generally integrated with the business. As jobs evolve, working relationships will change. It becomes important for folks to view where the business is heading, and then build relationships and skills that align with the future. Of course, these relationships are different within every business.

What are you seeing in your business? Do you observe these trends, or, do you observe something different? How about in different industries, what do you observe?

2 comments:

  1. Anonymous3:35 PM

    A long, long time ago, in a galaxy far far away, a business unit that had hitherto been called Circulation and ultimately became Direct Marketing was called Customer Planning & Development. That task remains a core business imperative regardless of the tactics employed on its behalf, and I wonder if that idea -- which also, incidentally, puts the customer first -- is perhaps a good name for that chunk of the marketing organization?

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  2. I think that's a good name, so long as multichannel retailers combine the job functions necessary to have a successful Customer Planning and Development department.

    For instance, if the web analytics folks work in the same department with the SAS programming folks, and each team cross-pollinates each other, you've got something --- and, you'll develop customers in the process.

    Now if they bring back the tractor paper that is alternately colored green/white/green/white or blue/white/blue/white, with perforated trim between each page, coupled with "control cards" you submit to the Data Processing department each time you want to get your hands on some data, then you've got something!

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