A Discussion With "Catalog" Craig Paperman
Kevin: You don't look very happy today?
Craig: I'm not happy.
Kevin: What could possibly be frustrating you on a gorgeous Fall morning?
Craig: It doesn't work anymore.
Kevin: What doesn't work anymore?
Craig: I did everything I was supposed to do.
Kevin: Specifics, please.
Craig: They told me if I integrated my catalog and my website that customers would love me.
Craig: Sales didn't grow.
Craig: I thought that omnichannel customers spent nine times more than single channel customers?
Kevin: That's what they tell us.
Craig: My team worked hard to create a seamless, frictionless omnichannel customer experience. Same merchandise across channels, same pricing, same promotions. It's beautiful!
Craig: Our share of omnichannel shoppers increased from 3% to 22%.
Kevin: If omnichannel customers are worth nine times a much, then simple algebra dictates that your business should have more than doubled.
Craig: But nothing happened. If anything, after accounting for inflation, my business is shrinking.
Craig: How is that possible?
Kevin: How is what possible?
Craig: I did what the experts told me to do. And it didn't work.
Kevin: Maybe the experts were wrong? Or maybe they weren't experts to begin with. Maybe they were just selling you a message that you wanted to hear, a message that they generated profit from.
Craig: When I ask industry experts, they tell me it is my fault.
Kevin: Of course they do.
Craig: I sat down with my co-op sales rep. She told me to focus on their new "coherence" model. She said that clients were experiencing breakthrough results. She told me that JCP used it in their new catalog. She said it was "proof" that cataloging is the linchpin of the omnichannel experience.
Craig: Not so much.
Kevin: Did sales increase?
Craig: Response rates increased from 0.55% to 0.58%.
Craig: But the average age of the customer we acquired was still 62 years old.
Craig: Why are my co-op customers always 62 years old? And getting older?
Kevin: Because you are using catalogs as a linchpin in your omnichannel strategy.
Craig: Oh come on. Customers love paper.
Kevin: 62 year old customers love paper.
Craig: That's not true. Five percent of our customers are under the age of forty-five.
Kevin: Half of the population in the United States is under the age of forty-five.
Craig: That can't be true.
Kevin: Would the Census Bureau lie to us?
Craig: Would the Government lie to us?
Kevin: Think about it this way. Who is your favorite band?
Craig: The Eagles.
Kevin: Let's say you hosted a party. You played The Eagles on that speaker shaped like a faux rock in your back yard. You played The Eagles on your home theater. You played The Eagles on that bluetooth speaker in your office. You integrated the entire listening experience across the house.
Craig: Giving my listeners a "Peaceful, Easy Feeling".
Kevin: Right. You're giving your party attendees an integrated omnichannel listening experience. You are even using a bluetooth speaker - employing digital technology along with your old-school home theater. Nicely done. Who would be most likely to listen to the music?
Craig: My friends would love it.
Kevin: Precisely. How about your kids, and their friends?
Craig: They'd probably put their earbuds in and listen to something on Spotify.
Kevin: Or they'd leave the party.
Kevin: They wouldn't enjoy listening to The Eagles, would they?
Craig: I could sprinkle in some Boz Scaggs. Make a playlist. Bread. Jefferson Airplane. Boston. I'd "get jiggy" with it.
Kevin: Do you know who Jason Derulo is?
Craig: Jason Alexander?
Kevin: Never mind.
Craig: What does this have to do with my business?
Kevin: This has EVERYTHING to do with your business!
Craig: I don't get it.
Kevin: You provided a wonderful omnichannel listening experience at your party. You integrated music channels across your home and yard. And then, after doing all of the hard work to integrate everything and make everything the same, you drove away every guest under the age of 50 because you played The Eagles at your party.
Craig: But people love The Eagles. They're one of the greatest bands of all time.
Kevin: Your target audience loves The Eagles.
Kevin: Don't you eventually need new friends?
Craig: Now that you say it, I am sick of that gossipy Agnes Myers. She's always peeking over my fence, looking at my faux rock speaker.
Kevin: If you need new friends, you can play The Eagles, and maybe you'll find new friends who share your current musical interests. Or you could play Jason Derulo. But if you play Jason Derulo, you're going to have different people, younger people, at your party. Their needs are different. Are you willing to take care of their needs?
Craig: I hear they love Mountain Dew.
Kevin: Red Bull.
Kevin: You're proving my point.
Craig: As long as younger people love nachos, I could probably adjust my playlist.
Kevin: An omnichannel strategy focuses on your core customers. Those are the people who share your interests. You do everything for them, and in the process, you shut out everybody else. Do this year after year, and your customer base ages, along with you. Pretty soon, your merchandise only appeals to your core customer.
Craig: Maybe I could burn a CD that has The Eagles and Madonna and Carrie Underwood on it?
Kevin: Again, that's the problem with an integrated, channel-based omnichannel strategy. When we stretch, we alienate our core audience. We offer Madonna. The customer wants "The Eagles". How can we ever get to Jason Derulo if we can't build the bridge from The Eagles to Peter Cetera to Cher to Alanis Morissette to Sheryl Crow to Pink to Katy Perry to Fall Out Boy to Jason Derulo?
Craig: Isn't it ironic that you didn't mention Skid Row? They were awesome!
Craig: So how do I get out of this mess? I'm left with a 62 year old customer, and no matter how hard I work with the co-ops, I keep getting 62 year old customers?
Kevin: You have to offer a merchandise assortment that appeals to a younger customer, and then you have to engage with those customers in the channels they prefer. And I cannot believe I just used the marketing buzzword "engage" in an actual conversation.
Craig: But if I do that, I'll alienate my 62 year old customer, right?
Kevin: Yes. It's exactly like playing The Eagles at your party.
Craig: So then I'm stuck. What a waste of time. Thanks for nothing.
Kevin: Why can't you host two parties? One for those who love The Eagles, and one for a different audience?
Craig: But that goes against the omnichannel playbook. I'm supposed to integrate everything.
Kevin: Build two brands. Your current brand generates profit from your current customer audience. Build a second brand that appeals to a different audience.
Craig: Can I create catalogs for that audience?
Kevin: We're right back to our parable about The Eagles.
Craig: But I love mailing catalogs. My printer says that catalogs are making a comeback.
Kevin: And Don Henley has a new album coming out. He's making a comeback.
Craig: See what I mean? Everything old is new again! I'll just keep doing what I'm doing. Everything will be fine. Now, if you will excuse me, I need to plan for my Summer 2016 merchandise assortment.
Kevin: Mobile brands are dynamically merchandising offerings to unique customers in real time, and you're busy planning your Summer 2016 merchandise assortment?
Craig: My paper rep needs a commitment as soon as possible. She says she can get me a 5% volume discount if I plan my circ levels through the end of 2016 and then promise to not alter the circ plans in 2016. It makes good business sense to plan ahead, don't you think?