June 17, 2014

Online / Retail Dynamics: Merchandise

Yesterday, I talked about how email marketing dynamics are poorly understood in the typical online/retail setting. Similarly, merchandise preference is highly misunderstood. This, too, happens for a good reason - our web analytics platforms are calibrated to explain the impact of advertising on conversion - they are not calibrated to understand the impact of merchandise assortment on customer relationships.

Here's our map, once again.

Look at the three segments on the right-hand side of the image.

The merchandise categories are largely the same.

The customer, by and large, prefers the in-store experience.

Catalogs are a common customer conversion channel among these customers.

What we present to a customer plays a major role in determining what the customer purchases. Catalogers know this best - they've painted themselves into a corner by featuring merchandise that customers age 60+ tend to love.

I once had a client who sent a million catalogs a month, and had a million unique website visitors each month. This client obsessed about the merchandise they put in the catalog - then gave nearly no attention to the merchandise offered on the home page, and on key landing pages. Considering that many catalog recipients never bother to open the catalog, you'd think that an actual visitor on the website, looking at actual merchandise, would be considered a top priority. Not so.

Our segmentation map shows us that different customers have different merchandise preferences. Online, we should feature the merchandise that customers want to see - this isn't a difficult proposition in 2014. And we should realize that what we show the customer dictates what the customer purchases. We unknowingly influence how the customer will behave, often without much thought to the process. In this instance, the catalog aligns with a series of merchandise categories that this brand decides to actively feature - causing the customer to buy those items.

Contact me (kevinh@minethatdata.com) for your own, customized Online / Retail Dynamics project.