Story Time - About Analysts

Let me tell you a story.

This one is from Lands' End, nearly thirty (30) years ago. I'm 29 years ago and dumb as a box of hammers. Oh, I have the data on my side. The data tells us that if I send 80 pages of Men's Tailored merchandise in a standalone catalog I am heavily cannibalizing the same product (and other products) in my core monthly catalog. If the catalog is forecast to generate $5,000,000 in sales and $750,000 in profit, the reality is that 70% of the $5,000,000 would happen anyway if the catalog was not mailed - it would happen in the core monthly catalog instead. So the $5,000,000 catalog with $750,000 in profit is, in reality, a $1,500,000 catalog that is losing $250,000 of profit.

As a young analytics manager, I hold the moral high ground here (at least that's what I believe). I've tested the results. I have #facts on my side. Any other form of analysis is inferior to the repeated A/B test results which consistently tell the same story, over and over and over again. I'm brilliant, everybody else is an idiot. I'm ready to die on this hill.

One problem. The company moved on. The folks who manage these individual catalogs "won". The CEO who supported integrating the business units was fired, replaced by a person loyal to the individual catalogs. No amount of shoving facts in people's faces is going to matter. None. The issue has been decided.

In the meantime, my Marketing Director hires a Manager from Fingerhut. A very talented woman. Kind. At the end of a meeting we're idly chatting about various topics and I decided to go into a rage about how right I am regarding circulation strategy. I can tell this new hire feels uncomfortable. Hint - if you are a male in a meeting and you are causing a woman to feel uncomfortable, you're doing something wrong.

The new marketing manager looks at me and says "I realize you might be right, but the company moved on, and I simply don't understand why you keep trying to fight a battle you already lost. Worse, the way you argue reflects poorly on you. Why would anybody listen to somebody as angry as you are?"

The fact that I'm sharing this with you twenty-nine years later tells you how much of an impact this woman had on my career. She was right, I was wrong.

If you are an analyst you likely feel as if you are "right". For good reason! You have facts on your side, everybody else has gut feel. You have solid methodology on your side, everybody else leverages faulty methodologies. If somebody else comes to you with "a way" of analyzing something, you're probably quick to point out the flaws in that style of analysis. After all, you are "right" and they are "wrong".

This is where you have to be really careful.

Putting somebody on blast mode because they don't analyze things the way you'd analyze them might feel good, but it doesn't do anything for your credibility. If anything, it just causes the person receiving your feedback to think you are a jerk. You want the opposite to happen - you want the recipient of your message to think you are a genius.

Just because you are "right" doesn't mean you are "Right".

There's a reason I was required to attend Dale Carnegie training around this time in my career. I had to learn how to become a salesperson. I had to convince somebody who wasn't on my side to execute my tactics.

It is difficult to be an analyst, to convince people to do things that work against their instincts. It's hard to be smarter at something than somebody else, only to have "somebody else" question you or recommend tepid ideas that won't work. It's also hard to understand your blind spots. All of us have weaknesses that we simply cannot see, but are obvious to anybody working with us. Learning what we're good at ... that is an important skill ... and then not straying outside of what we're good at ... that's valuable to the companies we work for.

What Reactivation Looks Like by Visit Segment

If you looked at, for instance, 13-18 month 1x buyers (one purchase, last purchase 13-18 months ago), you might find that in the next month this cohort has a 1.1% chance of buying again. That's a percentage that is generally too low to impact your business, consequently, you don't pay much attention here ... other than offering this segment 40% off or 50% off or 60% off ... then you'll tell me that you are being "strategic" by offering discounts.

If you break the data down based on "what" a customer did in the past month, you see a different story.

Turns out that, in this example, thirteen (13) percent of this lapsed segment wasn't actually lapsed at all ... they're interacting with your brand.

Your web analytics package already captures the non-Community  information above ... if you hosted a community forum on your platform, you'd see the 2,026 people who also interacted with your brand. If you have an email address for these customers (which you'd likely have because you'd require these customers to log into your platform with an email address), you'd look at "what" the customer did last month and then send email marketing content that is relevant to the products the customer likely wants to purchase based on community interaction.

It's not hard to do, it's stuff that retailers were doing in the mid-2000s.

So go do something with this information ... right? Get busy!

Why Are You Generally Against Reactivation Via Community?

Maybe you aren't against it, but my metrics suggest you are.

Last week I wrote about Wool& (click here). As you might surmise, when I talk about various topics I put links into the post, and then (unsurprisingly) I measure how often you click on links. For instance, here the Velocity Sellers spend fifty-four minutes telling you how to "crush it on Cyber Monday". Several hundred of you will click on that link, and then a small piece of my soul will turn to omnichannel dust. Thank you.

A total of fourteen (14) of you (quite possibly seven people clicking twice each) clicked on the community links in the Wool& post above.

Knowing that a customer who hasn't purchased from you in anywhere between 3 months and 48 months is suddenly interacting with your brand is ... really, really important. When I measure this stuff via logistic regression response models, an interaction with your brand can vary between a 1.5x increase in reactivation (community) to a 3.5x increase in reactivation (email click through) to a 5x+ increase in reactivation (shopping cart). All you have to do is record this stuff as an attribute in your database - that's it. And then act upon it.

And yet, when I speak of using community as a reactivation tool, you could care less.

Is it the hard work required to perform this work at a functional level?

Is it because your technology team could care less about it and therefore you have no chance to do anything innovative and fun?

Is it because you think I'm just plain wrong?

Send me an email and tell me why you don't do this stuff? (kevinh@minethatdata.com)

eBay

When I worked at Nordstrom, there was an eager and bright professional who worked for one of the catalog co-ops. In modern terms, she'd be called a "Thought Leader". She always had ideas, and she always insinuated that my team and I were ... not smart ... let's leave it at that.

After an hour where she continued to suggest that she was smart and we were just dumb retail employees, I asked her a question.

Kevin:  "Have you ever worked in retail? Brick 'n Mortar?"

Co-Op Professional:  "No"

Kevin:  "Then how could you possibly know how to navigate more than ten thousand employees to get your ideas implemented, and how could you possibly know the intricacies of retail to know if your ideas will actually work or not?"

Yes, there was silence.

From there, I'd use the query often with angry thought leaders who had all the ideas but none of the experience to know if their ideas mattered.

This brings me to eBay.

You already know I enjoy headphones, both open-backed headphones and iems. I've maintained a limit ... six in my collection. When I get to seven, one has to go. I sell the seventh pair on eBay.

eBay is a fabulous place to learn about copywriting, imagery, pricing, and customer service. On eBay, I have a competitor ... as best I can tell when somebody returns a Truthear Nova to Amazon or another brand, that brand sends the returned unit to this guy, who then sells it as an "open box" item on eBay. I've bought a couple of headphones from this guy.

So this guy "sets the market". Maybe the Truthear Nova sells new for $159. If he's selling an open-box version for $95, that's it, that's the ceiling of the market. I've tested selling above his price ... crickets. I've tested selling below his price, and it has to be 20% below ... you list 10% below to 20% below. If you price 20% below you charge shipping. If you price 10% below you absolutely need to offer free shipping.

I take pictures of the headphone or iem, of all of the tips, the box it came in, possibly the new headphone cable that I put on the iem that the buyer will get for free (to set the item apart from other units with stock cables). Pictures matter. They matter more than keywords matter, that's what I've learned.

Good reviews matter. How do I get a good review?

• I put a handwritten note in most outgoing packages.
• I sometimes offer headphone amp recommendations so the user knows what to buy next.
• In the case of the iPad I recently sold, I put a series of connectors (and an Apple Pen) in the box that didn't need to be sent to the buyer. I later learned that a woman bought the iPad for her Dad, and he liked having the bonus items to get started.

The handwritten notes ... that little touch, that matters. I'll tell a story of how I used the item and what I liked about it.

My stuff sells, quickly, usually within a day, normally in 3-5 days. I don't have to pay to have my items promoted.

If you are a service provider (and up to a third of you reading this are) and you want a taste of what your clients go through, and you don't have any direct e-commerce and/or retail experience, sell things on eBay (or Facebook Marketplace). You've got things lying around the house, unloved things ... sell them and test your ideas about pricing, creative, copy, and customer service. You are guaranteed to learn something new and interesting!

Small Apparel Brands Bucking Trends

I talked earlier this week about the feedback many of you provided to me recently ... "apparel is dying". I responded by suggesting this is part of a natural rhythm in business ... brands eventually commoditize an industry (Amazon, Walmart, Target) leaving low prices mega brands and fashion / high priced brands.

Then the middle fills back in with brands that "add something" to make mid-priced merchandise amenable to the customer. I asked you to forward me examples of apparel brands that are smaller, that "add something" to support mid-priced merchandise.

I'll list a few of your recommendations here (there weren't a lot of submissions), then do a deeper dive on one sent in by a reader from a client I've had a relationship with for fifteen years.

• Fair Indigo:  Sustainable, Fairly Made.
• 80s Tees:  Gen-X Pop Culture.
• Lascana
• Creation L
• 32 Bar Blues

Let's spend a few minutes on one brand sent in by an employee of a client I've had a relationship with for fifteen years.

The apparel brand?  Wool& (click here).

The reader cited the marketing hook that makes this brand worthwhile.

• "Wear one of their dresses for 100 days straight and Wool& will give you a $100 gift certificate".

Here is more on the 100 day dress challenge (click here). They suggest that 7,000 customers completed the challenge. Read the criteria for completing the challenge ... you give them your email address, you've already had to have purchased a dress, they encourage you to wear the dress eight hours a day to get the most out of it (100*8 = 8,000 hours, yeah, that's getting some mileage out of the dress). They ask you to promote the challenge on social media ... free marketing! Then you have to email them date-stamped pictures of all one-hundred wearings.

Also notice the "Why 100 Days" quotes.

• The challenge proves that wool is a performance fabric.
• The challenge proves that wool is remarkably odor-resistant.

Finally, there are 413 comments in the post about the 100 day dress challenge. I've talked about the importance of hosting your own community-based forum. Here's one. Every time you log in an participate, they capture information about you that tells them you are interested in them in-between purchases. They may not even use it, but if they worked with me, they'd use it! Who would you rather have on your customer file ... a customer who last purchased 18 months ago that you know nothing about, or a customer who last purchased 18 months ago and interacts with your community?

If 100 days is too long, they offer a 30 day challenge and a $30 gift card. Compromise!

They have community meetups. Twenty-five years ago at Eddie Bauer we had a "field marketing" team ... it was their job to foster what is now called "community". It turns out people want to feel like they are part of something. Who knew?

Here's their Facebook community ... it's private, 25,800 strong. They tell you it is, and I quote, "The Nicest Place on the Internet".

So, yeah, this is what "plus something" looks like. You add all of this and all of a sudden you can get away with mid-priced or even non-fashion expensive-priced items. You're not competing against Target. You carefully define your corner of the world.

I know, I know, this is where you tell me that I'm crazy, and you tell me this is too much work, and you tell me there is no guarantee of success. If that's how you feel, tell me how your call-to-action A/B creative test on Facebook worked, because you're left fighting for customers in a soulless digital landscape, all-the-while being pressured to lower your prices to Amazon / Walmart / Target levels.

You Reacted!

Talk about catalog marketing dying and you'll get feedback, pro and con.

Talk about apparel dying? Overwhelmingly positive feedback, and plenty of it! As much as I've received from a post in a decade.

One of our readers offered an interesting thesis ... "There is a proliferation of $5 million to $10 million apparel brands online ... There is no one place to see them like ... Amazon".

Let's test this thesis. Send me an email (kevinh@minethatdata.com), listing a small apparel brand you shop from. You are also required to tell me what the marketing hook is that they use to give you a reason to purchase from them. If I get enough responses, I'll share your perspectives.

So, please, overwhelm my mailbox with the small apparel brands you are buying from and the "hook" they use to cause you to avoid luxury apparel or commodity apparel. Go!

Apparel (Not All of It) is Dying

Many of my clients sell apparel ... often Women's Apparel.

And many of you are telling me that Apparel is dying.

Some of you don't say it specifically ... you tell me things like "Our sporting goods business is solid but apparel just keeps losing ground". There is some synergy between apparel losing ground and catalog marketing now in a free fall ... both interact with each other in a negative feedback loop.

A decade ago I consulted with a business that ended selling casual apparel (which was a reasonable percentage of the business), favoring outdoor apparel instead. Lots of internal strife ... "this is the end of the brand".

• Narrator:  "It was not the end of the brand."

Sure, the brand got smaller, but then the brand stood for something, and moved forward. Their marketing tactics changed. Their creative treatment of products and personas completely changed. They were free to be "who they wanted to be" because they didn't have to constantly cater to a casual apparel customer that was ... well ... different.

As we ease into 2025, we're at an inflection point if you are an apparel brand. You are being squeezed into oblivion.

• Amazon / Target / Walmart:  They commoditized apparel. Why should I pay $79 for something from Under Armour or Nike when I can get something that is 85% as good from Amazon for $19 and if it fails I can get two more and still have $20 in my pocket?
• Fashion:  Meanwhile, some brands think they can get you to spend $149 on a dress. They can. A "comparable" item might cost $25 on Amazon ... it's not comparable, but it is comparable enough that most traffic heads to $25 while a small fraction spend $149. But it is the "right" traffic for that brand. They are competing on a very different level, and they have to pay for that, don't they? But they made a choice.

So, if you are Lands' End and you have a comparable dress for $89 at 40% off for $54, where do you fit? Why should the customer pay $54 when the customer can pay $25 and save money? Why should the customer pay $54 when the customer can pay $149 and get the ooohs and aaahs from the public? Financial benefits on one end. Social/Emotional benefits on the other end. What does $54 buy you?

One of my favorite books is The Demography of Corporations and Industries. One of the chapters deals with beer. There used to be hundreds/thousands of breweries ... which all were whittled down to a handful of "macro-breweries" by the 1990s. Bud or Miller. Enjoy! If you sold a middling beer at a middling price? Good luck, you were doomed. Only a handful of breweries existed by the mid-1990s.

What happened next? Micro-breweries. Walk down the beer aisle at Safeway in 2024 and you'll see a small area of macro-brews and an extensive array of micro-brews, all generally more expensive than the macro-brews that wiped out the beer industry thirty years ago. Who would have thought that "Summer Shandy" would command a higher price and that people would want beer that tasted like (checks notes) a lemon?

• You have luxury beers.
• You have quirky beers ... the "Summer Shandy's" of the world.
• You have commoditized beers.

When apparel reinvents itself over the next decade, it will likely take the "Summer Shandy" path ... it will be apparel ... plus something ... like beer plus lemon, for instance. Might be quirky, might be different. 

I can't tell you what that "plus something" is ... that's your job, that's what you get paid to do. You don't get paid to send money to Facebook in exchange for customers, a bot can do that.

Apparel isn't the only thing that is dying. Gifts are dying. Home products are dying. Electronics already died years ago (commoditized to Best Buy and Costco and Amazon). I speak often about headphones ... headphones are being re-invented after the market was decimated by Apple and Beats and Noise Cancelling offerings from Bose / Sony / Sennheiser. Go buy a Zero:2 iem for $25 and tell me why you'd buy a Beats headphone for $200 - $300 ever again?

It's your job to find the "plus something" that causes an item to be appealing when compared to "monopoly brands" like Apple, Target, Walmart, Amazon, Best Buy etc. I know, you don't want to hear that, some of you will email me and tell me I'm wrong. That's ok. But you can't fight progress, and if you don't figure it out, somebody else will, at your expense.