February 19, 2017

Do You Have Foxes And Rabbits Within Your Business?

Ten years ago, we measured the dismantling of the catalog industry ... foxes (digital) stole demand from catalogs (rabbits). It took from 1995 to 2010 for this to play out ... fifteen years of foxes eating rabbits until one of two things happened.
  1. The cataloger became an online marketer catering to most age demographics.
  2. The cataloger remained a cataloger, but catered to a 60+ age customer offering merchandise that 60+ year old customers prefer.
Today, we're witnessing the dismantling of the traditional retail industry ... foxes (digital) stealing demand from traditional retail stores (rabbits). We're about five years into what might be a fifteen year transition. And just like catalogers responded by mailing far fewer catalogs, retailers are responding by closing stores. And as catalogers learned, when you don't give the rabbits food, rabbits die and the foxes go hungry.

Those dynamics are at play within your business as well.

You've got nothing better to do today - so how about having your analytics team run a query for me.

For every Merchandise Category you carry, compute the following metrics.
  • % of last year's demand from customers who previously bought from that merchandise category in the past twelve months.
  • % of last year's demand from customers who previously bought from that merchandise category 13-48 months ago.
  • % of last year's demand from customers who had not bought from the merchandise category in the past 48 months, but have purchased from the brand in the past year.
  • % of last year's demand from customers who had not bought from the merchandise category in the pat 48 months, but have purchased from the brand 13-48 months ago.
  • % of last year's demand from customers who are new to the brand or are reactivated beyond 48 months.
I'll tell you what to do with the query tomorrow.