November 19, 2009

Gliebers Dresses: Big Books

Welcome to the Gliebers Dresses Executive Meeting.

Glenn Glieber (Owner): "... it simply isn't a day that I thought I'd ever see."

Meredith Thompson (Chief Merchandising Officer): "Kevin, is that you?"

Kevin: "Yup, it's me."

Roger Morgan (Chief Operations Officer): "I assume you've heard the news, Kevin?"

Lois Gladstone (Chief Financial Officer): "Yes, I'm sure he heard about it. BT Nickels is discontinuing their twice-yearly big book catalog mailings."

Pepper Morgan (Chief Marketing Officer): "I spoke with Janice Fosterberg at ResponseShop, our co-op and matchback vendor, and she said that they are making a HUGE mistake. She said that they ran several analyses on BT Nickels data, and it shows that those gigantic, 600 page catalogs are responsible for 10% of their retail sales and 80% of their e-commerce sales. She thinks they will absolutely regret the day they made this decision. And Ralph Throckmorten is their print rep, and he said they are going to lose a ton of paper discounts because of this decision. He said this will drive up the incremental cost of their other catalog activities, making them less profitable, causing them to trim circ. He doesn't like where this is headed."

Roger Morgan: "I'll bet that ResponseShop regrets that they made this decision. At $0.06 per pop, they're losing millions of dollars."

Pepper Morgan: "Well, they're going to continue to mail what they call 'skinny books', you know, 84 page catalogs with targeted merchandise to specific niche audiences within their catalog file. So I'm sure ResponseShop is going to continue to be lathered with $0.06 payments for some time to come."

Meredith Thompson: "But what a sad day. I mean, this really is a sad day. Back in the late 70s, I relished ordering from the BT Nickels catalog. It came in the mail, and we just fought over who got to see the catalog first. And remember, they only put 20 lines on their order form, heck, that wasn't nearly enough space to order everything you wanted, so you had to attach another piece of paper with all of the other items you wanted to buy. Then you mailed in your order, and you had to mail it around October 1, because delivery took 4-6 weeks, remember? And sure enough, just before Thanksgiving, your order arrived. The whole process was magical. That big book was magical."

Glenn Glieber: "And it is a sad day for all of those workers in British Columbia who will be denied the right to harvest a renewable resource because the big book is now gone. Where will they work now? I'm sure the folks at Catalog Select, the third-party opt-out service, are having lots of fun at the expense of catalogers, knowing all that paper has just been taken out of the mail system. Maybe they can provide jobs for all of the workers who are being slowly displaced by technology."

Roger Morgan: "I ordered a computer chess game from BT Nickels back in the mid-80s. I played that computer chess game every day. You couldn't find it in stores anywhere, the only place you could find it was in that big book catalog."

Lois Gladstone: "And now, you download a free app on your iPhone and you can play chess against a computer or against any one of a half-million iPhone chess enthusiasts worldwide."

Glenn Glieber: "What is an, uh, what did you call it, an 'app'?"

Lois Gladstone: "Yes, an app ... it is an application, a computer program that you wirelessly download onto your iPhone. In the old days, you'd buy a computer game at Best Buy for $24.95. Now you buy an app for $1.99."

Roger Morgan: "And many of the apps are free. For some retailers, those apps are like free marketing."

Glenn Glieber: "I love free marketing!"

Pepper Morgan: "And that's the punchline, isn't it? Why send 600 pages at a cost of $7.50 per catalog to a customer when the customer holds the entire world in her hands on an iPhone?"

Glenn Glieber: "Are we doing any of these app things, Pepper?"

Roger Morgan: "Oh, not yet, Glenn. Pepper put apps for the iPhone and Droid platform on the book of work, but we're buried right now with a Holiday season information technology lock-down. There's no way we can work on that stuff right now, we simply cannot interfere with computer systems that are taking Holiday orders."

Glenn Glieber: "What's a droid?"

Roger Morgan: "That is Google's cell phone platform, they are competing against the iPhone."

Glenn Glieber: "And Pepper, you were thinking of doing droid marketing too? Is that free?"

Pepper Morgan: "Our iPhone and Droid and Blackberry apps would all be free."

Glenn Glieber: "And the customer could thumb through a digital pdf or something like that on their droid? I mean, could we have a 600 page big book in pdf format for the customer to thumb through on her i-droid? And then maybe we could make it available on the Kindle too, heck, we could charge customers $0.99 for a 600 page big book in pdf format."

Pepper Morgan: "Well, we'd prefer that the customer visits a mobile version of our website."

Glenn Glieber: "But we already have a catalog, and the catalog drives customers to our website, so why does the customer need to use a free droid to go to a special version of our website? I mean, I like the cost structure of the whole thing, but that's not how people shop, is it? Haven't we been taught that customers use paper to place online orders?"

Lois Gladstone: "It's how some people shop."

Glenn Glieber: "Are you telling me that more people would shop via these free droids than would shop a big book like BT Nickels used to send?"

Meredith Thompson: "Absolutely not. I'm sure a half-million or a million customers would still buy from a big book. Apps haven't broken through for retailers yet. And that's the problem with all of this marketing hype. A million customers will order from a big book, but everybody declares it to be dead because it is too expensive. 20,000 people order from an app, but that's all you ever hear about, the 20,000 cool people who order via mobile marketing."

Roger Morgan: "But that's the thing. A big book from BT Nickels cost $7.50 to put in the mail. One of our 124 page catalogs costs $0.75 to send to a customer. An iPhone app costs us essentially nothing, outside of staffing and development costs."

Glenn Glieber: "I get the big book. It's the whole assortment, sitting on your coffee table. And I get our catalogs, because they are targeted with razor-like precision to customers who love dresses. But this i-droid app, that doesn't make any sense to me. Are you saying that a customer holds a phone in her hand and buys dresses from us?"

Lois Gladstone: "And listens to music."

Roger Morgan: "And tweets to her friends."

Lois Gladstone: "And reads news headlines."

Meredith Thompson: "And uses Google Earth to take a magical trip to the Palouse."

Lois Gladstone: "And gets urgent weather messages from the National Weather Service."

Roger Morgan: "And reads books."

Lois Gladstone: "And does online banking."

Roger Morgan: "And watches NFL Thursday night games on it."

Pepper Morgan: "I'm saying that next spring, we will launch a mobile shopping website with free apps for all lines of smartphones."

Glenn Glieber: "Smartphones! I remember when we had party lines back in the 1970s. My daughter would be speaking with her boyfriend, and then she'd freak out because old man Barnaby from three houses down the road was listening to her conversation."

Roger Morgan: "Have you noticed, folks, that the cell phone carriers have all raised their data plans to something like $129 a month for two people. I mean, what's up with that? Everything else is getting cheaper, but if I want to download a bunch of free apps I have to pay $129 a month, every month? And then you look at Sonora's text messages. Do you realize that she sent and received 2,084 text messages last month? Mercy!"

Pepper Morgan: "Roger, the average kid sends and receives 2,200 text messages a month. 2,048 is actually well below average."

Glenn Glieber: "Do we send out free text messages to our customers?"

Meredith Thompson: "I just think we keep losing something as technology takes us in a digital direction. That 600 page BT Nickels catalog sat on the table for four months. Then our 124 page catalogs sat on the table for four weeks. Then an e-mail marketing campaign sat in my in-box for four hours. And now the customer will research our mobile website for what, maybe four minutes? Honestly, we're running out of time to romance a customer, aren't we?"

Kevin: "Here's something for all of you to consider. What is your marketing strategy? Honestly, what is your strategy for communicating with and engaging customers? You're doing all of the things that the multichannel experts tell you to do, catalogs, e-mail marketing, search, affiliates, social media, banner ads, mobile marketing, you name it, you are willing to dip a toe in it. I think it is great that you are thinking of doing something with mobile marketing. But what is your strategy? Could anybody in this room offer me a one-paragraph description of your multichannel marketing vision for the next five years? Could you tell me which channels will be emphasized, which channels will be de-emphasized, which channels have mass-audience appeal, and which channels are destined for niche audiences? BT Nickels is clearly telling you what they think the future of print is. There's no reason Gliebers Dresses cannot have a vision for how each of your marketing channels are forecast to evolve, and then you market to the projected evolution of each channel."

Meredith Thompson: "I think that's easy. We're being 'multichannel' because the best customers are multichannel customers, and we want to be everywhere the customer is. So if she is walking down the street and sees an Ann Taylor Loft store and decides she wants a dress and then thinks, 'oh goodness, maybe Gliebers Dresses has something like that', she can just punch up her iPhone app, and bingo, we just took a sale away from Ann Taylor Loft. It's really that competitive, I think, at least for 20,000 tech fanatics using apps."

Kevin: "That's your imagination, and imagination is really good. But imagination is not a strategy. How many of you shop with your iPhones when you are spending a weekend in Boston? Seriously, how many of you do that? Or how many of your friends do it? Just because a tech blogger says this is the future doesn't mean it is the future ... unless, of course, you do something so innovative with the channel that you literally create the future. That seems to be what is completely missing from multichannel marketing. Everybody is doing something because you are supposed to do something, same items and same prices and same imagery and same promotions in all channels, so that the best customer gets pummeled with the same message 97 times in eight different channels. Who said that is a good customer experience? Vendors selling multichannel solutions? Having a website that store customers can buy from and vice-versa isn't a genuine strategy, it's a tactic. Why not be the first to have a strategy? Outline, for each channel, what the purpose of the channel is, who the unique customers are who are served by that channel. Clearly state how you plan on using each channel in a way that is congruent with other channels. Clearly state how you plan on using each channel in a way that is completely different from every other channel. Clearly state how you will use each channel is a way that is different from the way your competitors use channels. Clearly state how customers, not marketers and vendors, benefit from all of these channels. Clearly state what defines 'success' in a channel, and what must happen for you to decide to shut down a channel. That's what BT Nickel had to have done with their big books. Prioritize every channel, because they sure aren't all equal in stature. Communicate your strategy to every employee. I dare any cataloger to provide a document that has this level of thought in it. You can lead the pack. Do it!!"

Glenn Glieber: "That sounds like a fascinating project, Pepper, why don't you tackle that one? And be sure to be clear about where we are going with droids and stuff like that. Have something on my desk by the end of day tomorrow. Ok, great meeting! And we'll certainly miss the BT Nickels big book, won't we?"