February 18, 2015

Poor 1-800 Flowers: Merchandise Productivity

Did you hear about the poor folks at 1-800 Flowers? Click here for details. I cannot imagine the nightmares associated with shipping live plants to customers, especially in sub-freezing weather. It's easy to ship a sweater. It's harder to ship something that is alive.

You can be the smartest omnichannel marketer in the world ... a real channel master ... and yet, when the customer receives the image at the start of the article (click here to see the image on Facebook), well, omnichannel becomes irrelevant, doesn't it?

I recently worked with a business that grew by 62% over three years ... 50% of the growth came from an increase in merchandise productivity. This business figured out exactly what the customer wanted to purchase, and in the process, grew to over a hundred million in annual sales solely by being an excellent direct merchant.

When you are an excellent direct merchant, all of your marketing channels perform better, allowing you to spend more on marketing in all available channels, allowing your channels to perform better, allowing sales to increase, exposing the business to more customers, creating more word of mouth, increasing inexpensive customer acquisition, further growing the business.  All of that, simply from improving merchandise productivity.

Conversely, you mess up your product strategy, and no amount of omnichannel brilliance will save you.

Omnichannel is a tactic, probably a necessary one.

Merchandise, however, means everything. Too few marketers focus on merchandise. It's time to focus on merchandise.