This week, I am presenting at NEMOA ... a session about how Traditionals, Transitionals, and Transformationals (i.e. Judy, Jennifer, Jasmine) will impact the future of marketing. Or, in simpler terms ... I am presenting the future of catalog marketing.
If you've been with me for the past six years, then you already understand my point of view:
- In 2001, we made a decision. Instead of allowing the online channel to grow and thrive as an independent entity, we elected to integrate it with our core business, and by doing so, we homogenized the experience, causing the online channel to reflect the core catalog buyer we already possessed, eschewing a younger online shopper.
- Since 2001, we decided to embrace co-ops as our primary method for acquiring new customers. The models employed by co-ops selected 55+ rural customers, as they should, given their job is to optimize response within catalogs, catalogs that are preferred by 55+ rural customers.
- This dynamic (catalog + website appeals to a 55+ rural customer ... co-ops deliver 55+ rural customers that will shop online after receiving a catalog) fueled a feedback loop that, eleven years later, results in a customer file that is fundamentally disconnected from the average consumer in America (a shopper in her early 40s).
- Now that we are disconnected from the average customer, anything new and trendy we try, stuff appealing to a customer age 18-49, simply doesn't work when marketed to a 55+ rural customer. This fuels the feedback loop.
- Long-term, this feedback loop is unsustainable.
- Toss in USPS challenges, and short-term sustainability is questioned.
- The secret to sustainability, over the next decade, is for the catalog brand to follow an age band (50-59 year old customers) instead of following a cohort (59 year old customers that will become 69 year old customers). This means that the catalog brand must become proficient at speaking to "Jennifer", the current 43ish year old e-commerce / Google maven.
- As the catalog brand switches from Judy to Jennifer, there will be a consistent reduction in catalog advertising dollars, because we will need to fund free shipping to encourage Jennifer to purchase.
- The catalog brand that tries to jump the bridge from Judy to Jasmine is likely to struggle.
- The catalog brand that sets up a separate, unique brand tailored to Jasmine might experience success.
- The catalog brand that rides Judy into the sunset may experience nice levels of profitability for a period of time, prior to an erosion of all business metrics.
- The transition from Judy to Jennifer won't be without struggle. Jennifer demands free shipping, and likes discounts. In order to fund these activities, catalogers will have to cut back on catalog housefile marketing activities to Jennifer. This will be acceptable, because Jennifer spends 50% of her dollars outside of catalog marketing anyway.
- It may be possible that the catalog brand can mail more catalogs to Judy.
Some will argue that this story is congruent with the consulting business I have, that I am selling a message that benefits me directly. I'd argue the exact opposite. 70 projects in five years clearly demonstrate that all of these trends are accelerating, so I must position myself in a place where I can be of the most help to you.
Now, allow me to be positive for a moment. This transition (from Judy to Jennifer) is achievable. But the transition will require a change in mindset. It will require a shift in thought, from the catalog as the center of the solar system to a more "personalized" strategy (catalogs to Judy, a fantastic online experience for Jennifer, and something very different for Jasmine).
Any talk of the future (iPad apps, social media, mobile, hologram marketing) should consider the linkage between your audience, and the media your audience is likely to use. Judy is not going to be part of the tablet commerce generation, in fact, she's not going to pull out her Blackberry and buy something from your snazzy mobile site.
Anyway, this is what we're going to be talking about this week at NEMOA. I look forward to seeing you there!