December 06, 2015

We Graduated! What Next?

Here's what the data indicates.

(1) For both catalogers and retail brands, the e-commerce experience was sub-optimal. This goes back to maybe 2007, +/-.

(2) We had to work hard to fix the e-commerce experience.

(3) Catalogers chose not to fix the e-commerce experience. Instead, catalogers aligned the website with the catalog (fixing the business #multichannel), and in doing so, cataloger websites fell far behind e-commerce websites. The catalog, fueled by co-op buyers, skewed old, and the merchandise offered in catalogs and online aligned with the 60 year old customer. Catalog consultancies will tell you that this is fine (while having cozy relationships with the very co-ops that send you old customers, so of course the merchandise and age of your customer is fine). It may be fine, if you have always catered to a 60 year old customer. It is not fine if your customer was 50 years old in 2005. There are consequences for being obedient to industry experts.

(4) Retailers chose to fix the e-commerce problem, and succeeded wildly. The online experience was so much better that in-store visits were skipped, resulting instead in online visits. Stores are closing, and foot traffic is down. Retail consultants will tell you that this is fine, as long as your mall is on the A-list or your customer shops at H&M (#innovate #disrupt). There are consequences for being obedient to industry experts.

The end result of (3) and (4) is comparable to graduating from obedience training. Both industries did what they were told to do by industry experts. Both parties were obedient. Both graduated to a land of tepid growth and comments like "can we fix this problem with social ads?"

What next?

You remember what it was like when you graduated from high school, and then spent your first year at college, right? It was a night-and-day difference. The competition was so much fiercer. You had far fewer people telling you what to do. Given the freedom to make your own decisions, you made your own decisions. Some decisions were good. Some not so good. But, overall, things worked out, or you wouldn't be reading this.

Catalogers graduated from multi-channel alignment - retailers graduated from omnichannel alignment. Now it is time to apply new skills to new problems. Your own, custom, tailor-made solutions. Merchandise/Entertainment. New Merchandise Low Cost Customer Acquisition. This is your future. Almost nobody is talking about this, because those who talk to you want you to take their Graduate program on retargeting or catalog circulation planning or social ads or responsive design. They can't make money when you focus on your merchandise, when you focus on entertaining your customer, or when you focus on low cost customer acquisition.

Our future is Entertainment, New Merchandise, and Low Cost Customer Acquisition. The latter is most important, and is dependent upon the first two topics.