March 21, 2010

Dear Catalog CEOs: Mobile, Social, Media, Algorithms, Tradition, Service

Dear Catalog CEOs:

I am preparing presentations for several conferences I am speaking at between now and June 1.

Two things have become obvious to me.
  1. What our industry knew as "multichannel marketing" is dead. It cannot be resuscitated.
  2. The customer decided what her version of the future looks like. We didn't anticipate her vision of the future.
Classic multichannel marketing looked something like this. Our industry mailed a catalog to a customer. The customer walked to her mailbox, full of anticipation. She opened her mailbox, and found nine of her favorite catalog brands offering 124 pages of sheer delight. The customer entered her home, fed her family a wholesome dinner, then covered herself in a blanket next to the fireplace, thumbing through more than a thousand pages of content. Her laptop sat beside her, her credit card securely stored in separate accounts at each of her favorite catalog retailer websites. She placed orders, she keyed in source codes off of the back of each catalog, she paid $14.95 for shipping and handling. In just six days, her merchandise arrived.

Classic multichannel marketing predicted that this process would repeat, evening after evening, in perpetuity.

And the script, written in 2001-2002, never varied. Even in 2010, this is the way the script is read. Worse, the e-mail marketing community picked up on the script. They claim that e-mail, a mature marketing channel, is the engine that fuels social media. Does that sound familiar to the script you've been following for a decade?

The script can always be justified, because there are always instances where the script is 100% correct. We'll always be able to find women in rural Maine who act the way we want them to act, causing us to believe that we're on the right track.

We're not on the right track.

There are many forces driving our customer base in different directions.
  1. Mobile.
  2. Social.
  3. Media.
  4. Algorithms.
  5. Tradition.
  6. Service.
Mobile is going to be unpredictable. Mobile is what the internet was in 1995. Your early investments in Mobile are unlikely to be fruitful. And yet, you have no choice but to be there, to experiment. So get busy!!

Social is the digital version of tradition. It is the place where humans digitally interact. People eat at a food court in a mall and chat. Now, people put a sign up on a digital property in Farmville, or share thoughts online.

Media is something that catalog brands need to embrace, immediately. Media must be created to engage customers. Media will be shared by folks in the social space. Media will connect people to brands in the mobile space. Heck, the iPad and successors are devices that will bring Media to life. Where is your high-definition programming channel? Instead of a tactic of creating a blog, what is your content strategy? How will you "entertain and inform" customers in a way that causes them to visit your website twice a week without the expense of a rented name from a co-op?

The future of Algorithms is uncertain. In a pre-Social world, Algorithms were the way that customers found information. Google decided who won and lost. That type of dominance is not likely to last this decade. Social and Algorithms and Mobile will interact in ways we cannot possibly anticipate today. We know how Algorithms used to work. Our customers will use our innovations to decide for themselves how they will interact in the future. One thing is certain. We need to be there.

We focus a disproportionate amount of time on Tradition. We mail our catalogs, we debate whether 64 pages are appropriate or whether 72 pages are appropriate. We contemplate a Monday-Wednesday in-home window or a Wednesday-Friday in-home window. We wonder whether we should add four pages of editorial in order to "make a statement". In 1994, this was a valid discussion. In 2010, this is 17% of what the discussion should be about. Tradition goes in other directions as well. Tradition relates to television, radio, newspaper, billboards, direct mail, e-mail marketing. Tradition relates to the competitive advantage a 35 year old catalog has over a 6 year old online startup. Tradition can be marketed a positive. Today, we let the customer decide what Tradition means, and all too often, she sees Tradition as being stodgy.

Service should never wane as a critically important component of a brand strategy in a digital world. Companies like Zappos choose to execute Service via operational excellence (i.e. rapid and free shipping), unfettered selection, and the use of Social to deliver the Service message. Nordstrom goes old-school, using real humans in physical stores to deliver Service. We must have a Service solution. It cannot be $14.95 shipping with six day delivery. It cannot be a bare-bones staffed call center.

Again, every Catalog CEO should demand that every member of the Executive team have an answer for how every strategy fits within each of these six dimensions.
  1. Mobile.
  2. Social.
  3. Media.
  4. Algorithms.
  5. Tradition.
  6. Service.
Take your website, for instance. How does your website interact with Mobile? Why would folks in the Social world recommend your website to somebody? What Media are you producing on your website that would cause the customer to voluntarily visit your website every-other-day? Do the Algorithms favor your website, driving new traffic? Do you leverage Tradition (i.e. your catalog) to drive traffic in a cost-effective manner? And what Service do you offer that is superior to anybody else?

Your website no longer represents technology, your website IS your store, it is the embodiment of who you are. Your website and your merchandise and your pricing strategy are essentially the same thing. You leverage Mobile, Social, Media, Algorithms, Tradition, and Service to grow your business. These dimensions replace traditional campaigns, the building blocks of classic marketing. No tactic within any dimension scales to a level that replaces a campaign, which is a problem of the 2010s that we simply cannot avoid.

Again, every strategy you implement should tie in to each of the six dimensions outlined in this article.

Ok, your thoughts?

2 comments:

  1. Multi-channel is dead! Long live Multichannel.

    Kevin, this is a terrific post, and I agree with the wake-up call you give to catalog marketers. There is one point that I don’t agree with.

    In my opinion, it is Multi-channel (with a hyphen) that is dead. Mulitchannel (without a hyphen) is the present and future of marketing communications. This is not just a grammatical or pedantic point.

    When I think of multi-channel, I think of marketing combining retail, catalogs and e-commerce. It uses traditional tools and techniques poorly adapted to the new, consumer controlled business environment.

    Multi-channel employs campaign thinking that makes sense to marketers, but not to consumers that want to interact and engage when, where and through the channels that they want to, not only at the times and through the channels that marketers offer them.

    Sure, most organizations claim to be customer centric. And, more and more are listening to their customers. It’s the action steps that are the problem. They imagine that transformation means evaluating their existing capabilities and using “new” ways to strap those old capabilities onto the marketplace. That won’t work.

    Multichannel marketing communication without the hyphen)is about transformation. Businesses today need different go-to-market strategies, not better ways of doing the same old things. They need better testing, execution and optimization of what’s doable now, and much less talk about what the future may bring.

    There is much that’s doable now. However, too much of it is not yet on many marketers’ radar screens.

    Multichannel marketers are experimenting with new ways to build customer relationships with digitally empowered consumers. They are finding ways to accelerate the ability to choose, manage, measure and improve the effectiveness of every channel. It’s not just about search and social media. It’s the use of site based profiling, remarketing, platforms that provide real time customer engagement, behavioral triggers, and ways of distinguishing and using both online and offline data types.

    Far from dead, I find multichannel marketing communications quite alive and vibrant.

    Ron Jacobs

    Full Disclosure… Although I am known more for direct marketing, I believe strongly enough in multichannel marketing communications that I helped to create and fund a center of excellence for the research, study and teaching of multichannel marketing communications at DePaul University in Chicago, IL.

    www.cpe.depaul.edu/multichannel

    Now in its third year, it continues to provide education and insight to help marketers create the future.

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  2. Sounds like it is time for a new name, something other than multichannel or multi-channel!

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