August 07, 2010

Netflix: Classic Multichannel Forensics

You have to love Multichannel Forensics when you consider the case of Netflix v Blockbuster, don't you?

Best of all is the fact that DVD rentals are down 25% year-over-year, while streaming of movies is up from 37% of subscribers to 60% of subscribers this year ... and oh, by the way, subscribers are up 50% year-over-year.

So many of us in the catalog industry failed to capitalize on disruptive technology. We were completely misled by a vendor industry pushing a multichannel platform that protected their business, not our business. As a result, we kept mailing catalogs, hoping the catalogs would cause customers to buy online. We failed to resonate with an entire generation of folks, who are now age 40 and younger, representing a huge cohort (especially under the age of 30) that the cataloger simply can't easily reach.

And now, we have a generation of e-commerce experts who are about to make the same mistake with mobile. The analytics folks are saying that you are best off using old-school web analytics software with modifications to analyze how mobile and social yield a customer with "multichannel" characteristics. Does that story sound familiar? The story is percolating everywhere, folks.

You wonder if disruptive technologies are best utilized in an independent manner, not an integrated manner. The catalog generation tried hard to integrate old-school techniques with the web, without success. Retailers tried to integrate the web experience with stores, but didn't factor in how heavy debt loads in retail would cripple the retail experience with a small drop in same store sales. And now, the e-commerce generation gets ready to take on mobile. Will the mistakes be replicated?

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