March 14, 2008

Your Company's Multichannel DNA

Here's what I did. I scanned the 2007 10-K statements of five publicly traded companies:
  • Nordstrom (JWN).
  • J.C. Penney (JCP).
  • Williams Sonoma (WSM).
  • J. Crew (JCG).
  • Coldwater Creek (CWTR).

After tabulating the results, I was able to rank each of the five brands on the basis of how often these terms were used. The terms reflect how the management team of each company views the world. Let's take a peek at the findings.

Stores / Retail: The results aren't surprising, with Nordstrom and J.C. Penney skewing heaviest to these terms. Clearly, these brands view themselves as retailers, not so much as direct marketers.
  • Nordstrom = 68.1%
  • J.C. Penney = 67.3%
  • J. Crew = 56.4%
  • Coldwater Creek = 53.3%
  • Williams Sonoma = 51.5%
Catalog: Guess which companies used this term most often? Sure, the ones with a catalog heritage (though JCP shows how they changed over time).
  • Williams Sonoma = 14.9%
  • Coldwater Creek = 12.5%
  • J. Crew = 10.6%
  • J.C. Penney = 5.6%.
  • Nordstrom = 4.7%.
Internet: This one is a bit murkier to interpret. I'll leave it up to you!
  • Williams Sonoma = 11.6%
  • J. Crew = 11.5%
  • Nordstrom = 9.7%
  • J.C. Penney = 8.1%
  • Coldwater Creek = 7.8%
E-Mail: Do these companies care about e-mail marketing enough to say something about it? Nope. E-Mail marketers appear to have work to do to prove the viability of this channel to Sr. Management.
  • Coldwater Creek = 3.0%.
  • J. Crew = 0.9%
  • Nordstrom = 0.0%
  • J.C. Penney = 0.0%
  • Williams Sonoma = 0.0%
Multichannel: We hear the buzzword over and over and over from the vendor community. Do the management of these brands talk about it publicly? Not really.
  • Nordstrom = 2.9%
  • Coldwater Creek = 1.8%
  • Williams Sonoma = 0.4%
  • J.C. Penney = 0.3%
  • J. Crew = 0.3%
Customer: Often mentioned in context with the direct channel, this illustrates how often these brands talk about serving customers, vs. managing stores. Notice the inverse relationship with retail focus.
  • Williams Sonoma = 21.4%
  • Coldwater Creek = 20.3%
  • J. Crew = 19.8%
  • J.C. Penney = 18.8%
  • Nordstrom = 14.7%
Database: Does anybody mention metrics from the customer or e-mail database? Nope! A tip of the hat to Coldwater Creek for at least having a bit of database information available.
  • Coldwater Creek = 1.3%
  • J. Crew = 0.6%
  • Nordstrom = 0.0%
  • J.C. Penney = 0.0%
  • Williams Sonoma = 0.0%

Does Any Of This Mean Anything? Yes!

The management teams of each company speak publicly, in an official manner, once a year. When they speak, they signal to the public what they care about.

Nordstrom and J.C. Penney care about retail, though Nordstrom talks more about being multichannel than anybody else. Clearly, Nordstrom wants to use the direct channel to inspire retail growth, given that they don't talk about their catalog or online channels much.

Williams Sonoma management discussions are skewed toward catalog. Williams Sonoma speaks about the online channel more than anybody else as well. The DNA of this company is all about direct marketing. Even though this company has a veritable plethora of retail locations compared with somebody like Nordstrom, the way this company views the world is fundamentally different.

J. Crew has a direct marketing skew, though the skew is focused online. The web means something more to J. Crew management than to the companies that have a catalog focus.

Coldwater Creek has the most unusual DNA of the companies listed. Management appears to view channels from a marketing standpoint, mentioning catalog marketing, e-mail marketing, and the customer database more often than the rest.

The data qualitatively illustrate that the management teams, and in all likelihood the culture of each company, have a DNA that determines "who they are".

This view of "who they are" may determine how each company approaches the future. Companies with a catalog heritage will believe in catalog marketing as a solution. Companies that view the web as an integral tool will use it to drive future business. Companies that view stores as the core part of the business might use direct marketing to improve comps.

What is the DNA of the company you work for? How does your DNA shape how your company views the future?