December 03, 2014

Why I Harp On Merchandise Productivity

There's a recurring theme in my projects, during the past two years.
  1. The business is not meeting expectations.
  2. Merchandise productivity - the amount of $ comparable customers spend on merchandise, is not improving.
  3. The marketing team is blamed for the inability to sell merchandise.
When you don't have merchandise productivity analyzed, isolated, and quantified, then your marketing team is going to get picked on.

Look at the example here. Today, the search marketing team is perceived as "doing a good job". They are generating profit on the average $0.50 cost per click. Good job, well done, these folks know how to optimize the business. Time to write a white paper about best practices, don't you think?

A year later, merchandise productivity drops 20%. But if nobody bothers to quantify that merchandise productivity dropped 20%, then the search folks are going to get blamed. Look at their performance! They used to generate $5.50 profit per order ... now they are losing $4.50 per order. Idiots! It's time to fire the vendor, first and foremost, it's the fault of the vendor. When a new vendor fails to fix the problem, then it's time to go read a white paper about best practices - maybe the very paper written a year ago! And when that doesn't work, then it's time to fire somebody in the marketing department.

Marketers - please analyze merchandise productivity. It's a pretty important topic, don't you think?