July 23, 2014

What Has Changed Since "Hillstrom's Multichannel Forensics"?

This $95 ditty was written in the 2006, published in late 2007 (click here).

This was the peak of the "multi-channel" movement, a movement symbolized by the phrase "multichannel customers are more valuable than single channel customers". The logic still lingers today, in spite of having been debunked more times than can be reasonably counted.

I got a reasonable amount of feedback from the book. The feedback came in three large buckets.

  1. You must be really arrogant to charge $95 for a book. It's obvious you don't know the first thing about book publishing.
  2. I'd love to try the methodologies in the book, but I can't write code, so your book is pretty much useless. When Google Analytics embraces your techniques, I'll know that what you are talking about is important.
  3. Could you please work on a consulting project for us, and tell us how our channels interact with each other?
For a full year, this book provided a healthy amount of consulting income. Eye opening, folks. Eye opening. Books would become the second most important source of consulting income. No, not book income - I learned that you don't write books to sell them, you write books to establish yourself as a resource.

The book looked at numerous business models, illustrating ways to understand how channels fit together. The book helped Executives understand that, at the time, customers were switching from old school ordering techniques (phone) to e-commerce, and that customers would not go back the other way (largely debunking popular old-school theories about customer behavior). The book predicted that e-commerce would be a primary driver of store traffic, something that held up well for several years. The book allowed the reader to figure out how best to grow a business, given the dynamics of the business.

What changed?

E-commerce and Mobile, that's what changed.

The techniques in the book are well-suited for the massive shift from e-commerce / fixed location online tactics to mobile / fluid location tactics. The methodologies in the book help me understand what is going on in 2014.
  • E-commerce, which largely supported retail and drove sales to retail, is changing, and is now effective enough from a discovery standpoint to reduce retail traffic.
  • Mobile, among customers < age 35, is going to cannibalize and ultimately eat e-commerce.
  • Mobile has the potential to steer traffic in and out of stores (think Yelp) much in the same way that Google steered traffic to various e-commerce sites.
  • Many catalog customers no longer wish to shop via e-commerce. The methodologies outlined in 2007 now show completely opposite trends ... customers don't transfer from phone to e-commerce ... instead, e-commerce and phone are in isolation mode ... meaning that catalog businesses are frequently left with a 60+ year old rural shopper who actively chooses to not participate in e-commerce.
In other words, the business models described in the book really don't exist anymore. Business is a lot more complex than what was outlined in that book. But nearly a decade later, the methodologies can be used to understand how mobile is interacting with our businesses. What we learn, folks, is going to cause us to think very carefully about the future of an online business.