August 23, 2015

There's Nothing That Harms Merchandise Productivity More Than Being 55% More Expensive Than Amazon For The Same Item

I am standing in a Camping World store ... in need of a small, portable grill for an upcoming trip.

Oh look, this little beauty is normally $99.99 ... but in store, it is on sale for $84.99. Cool! It's on sale. What's not to like?

A quick check of the website shows me this ... an online sale for $80.15 (click here). Even better. Except for one thing. When I navigate the myriad offers and upsell opportunities offered by Camping World, I learn that shipping will be $14.00.

So the item is cheaper in store.

But before I check out, I thought it wise to check what the price might be on Amazon. I mean, with my Prime Membership, I won't have to pay shipping, will I?


Ok, I'll tell you ... wait for it ... wait for it ... $54.99!

While standing next to the darn item in a Camping World store, I add the item to my Amazon cart, I check out, and that's that.

Explain for a moment how any semblance of omnichannel wizardry overcomes the pricing difference? Go ahead ... I'll sit here and wait for an explanation ... and wait ... and wait.

There's nothing that harms merchandise productivity more than being 55% more expensive than Amazon for the same item.

Can I say that again?
  • "There's nothing that harms merchandise productivity more than being 55% more expensive than Amazon for the same item."
That's a good quote.

But in an ecosystem where a customer can showroom the darn item, an even worse dynamic arises.

Here's the dynamic.
  • An 18-39 year old customer doesn't even bother to step into the store.
  • A 40-59 year old customer uses a smart phone and buys online.
  • A 60+ year old customer waltzes into the store and buys the item.
  • The merchandising team sees that various items seem to sell well ... the items that 60+ year old customers love, and elects to further promote items that 60+ year old customers love, further bonding the brand with customers age 60+.
  • Only the marketing tactics that appeal to a 60+ year old audience tend to work, in part because of the merchandising/pricing/demographic dynamic, further fueling the ecosystem.
Cataloger after cataloger tell me that they now cater to the aging Baby Boomer customer. And it sure is interesting to hear online brands talk about how mobile conversion rates "stink". Both happen, in part, as a consequence of the dynamic above.

Merchandise Forensics isn't just about identifying the items that "work". It's about aligning merchandise and marketing and demographics. When the alignment fails, an odd dynamic forms. In many ways, we're all dealing with a comparable dynamic to what is illustrated above.