July 05, 2015

The Story Ends Differently

Have you had a chance to read this little ditty (click here)? It isn't hard to find people who disagree with his thesis. But it is hard to observe otherwise.

Click here for additional commentary ... I particularly enjoyed one of the hand-picked quotes.
  • “The peculiar development, full of dramatic irony, is that television, with its more circumscribed audiences making much more active selection and choice, becomes upscale media, and digital, with its mass reach and reflexive actions, becomes the downscale side.”
Oh my goodness. Does that not outline what digital has become in our marketing world?

"Align channels to create a seamless customer experience" ... have you ever noticed that so much of this seamless customer experience includes making sure that the customer gets twenty percent off plus free shipping ... and by making the digital experience a constant search for the lowest possible price, digital destroys the very environment it was promoted to build?

The story, so often, ends different from what we were originally sold. What I've learned, from analyzing +/- thirty-five brands this year, is this:
  • Merchandise Productivity is king. Merchandise productivity has largely been ignored for at least a decade, and we're now paying the price for our lack of attention.
  • Customer Acquisition is getting harder and harder. A small number of businesses possess a disproportionate stranglehold on customers.
  • In the image above, Tolls are being collected all throughout the customer journey. Most of my clients are dealing with profit-and-loss statements peppered with tolls. The tolls allow the businesses to grow (net sales), but do not allow the business to earn a high-quality level of profit. As a consequence, the minute a -5% merchandise productivity hit happens, the business loses money ... lots of money. Quality businesses absorb the -5% merchandise productivity hit without stress.
Undoubtedly, my story, the one I am telling you, will end differently as well.

But I will say this ... focus on merchandise productivity. Merchandise productivity covers up a lot of marketing, creative, inventory, and finance sins.