April 11, 2024

Sameness: Tell Me Which Companies Are Selling The Products Here

You want to see a completely tepid, bland, homogenized shopping experience? Yes! Ok! Tell me the brands that are represented here. Good luck!







I'm not going to tell you the answer. It's the same darn presentation. This is awful. Same web development tools, same analytics packages yielding the same conversion rates, all praised by digital gurus who love it when brands adhere to "best practices".

It's not a best practice if everything looks this ... the same. 

It's tepid.

It's horribly boring.

It's time for a change.

Yes, I'm ready for your complaints.



April 10, 2024

Equal Does Not Result In Better

I'll show how this relates to commerce in a moment.

Ok - NASCAR - last Sunday, they raced at Martinsville. A fun track. A half mile. Too many cars for the track. Normally cars are passing, and more importantly, cars are being lapped all over the place. Action. But on Sunday, nobody wrecked, nobody passed, and consequently nothing happened. Fans are fed up. NASCAR created a new car a few years ago where most of the car cannot be adjusted and the parts are the same for every car. In other words, the cars are the same. And if the cars are the same, they go the same speed, which means nobody can pass. Boring.

An analytics person simulated where the 15 fastest cars would have finished if they all ran their median lap time over the final 50 laps.


Yeah, they're all running the same speed.

Three years ago the spring race was loved by the fans. Here's where the fastest 15 cars would have finished if they all ran their median lap over the final 50 laps.


See what you can do when you simulate results? It's a shame that the e-commerce world chooses to not embrace simulation environments.

Anyway, if everything is the same, then everything is boring. Nothing happens.

Which brings us to e-commerce.

Is there anything more boring than the mis-guided vendor-fueled thought-leader-promoted consultant-driven research-endorsed omnichannel thesis? Same price / same experience / same promos / same merchandise / same presentation / same everything in all channels.

BORING!

When things got really boring (mid-2010s), customers revolted ... they walked away from retail, killing malls ... they migrated from e-commerce to Amazon and have not looked back.

Omnichannel!

Sameness plagues my industry. You use PLAs and Paid Social to find new customers, paying third parties for the same handful of customers who are gullible when reached by those platforms. When I ask you to think outside of PLAs / Search / Paid Social, you look at me like I am an alien. Then you go back to the same analytics tools and look at the data the same way and wonder why you can't break out of the muck?

You're all the same. It's an industry-wide plague.

Results are tepid.

Customers are bored.

Amazon / Target / Walmart / Apple benefit as a consequence.

There's a reason Kaitlyn Clark was so compelling in Women's College Basketball this season. She was different. She played the game like an NBA point guard, she shot like Steph Curry.

Different.

Different is good!

April 09, 2024

Merchandise Dynamics Video 002: The "Class Of" Table

It will only take ten minutes out of your day - enjoy this video about Merchandise Dynamics and the "Class Of" Table that you've seen me discuss often over the past eleven years (click here).

For those of you who want a larger image of the table in the video, here you go (click on the image).





April 08, 2024

Drilling Down A Bit On The Problem

Yesterday we talked about a brand that had stalled ... from about $57 million four years ago to $53 million today.

And yet, our 30,000 foot view of the Class Of Report didn't really illustrate a glaring problem. Sure, prices had increased, but there wasn't a merchandise class where new items appeared to be failing and there didn't seem to be a huge issue with existing items being discontinued.

Let's drill down a bit. Now we're at around 18,000 feet ... that's where the jet stream does a lot of work. Can we see anything by looking at new/existing items and items selling at/above vs. below their historical average price point? Click on the image to enlarge it.



Ok, we're starting to get somewhere. Remember, this is still at a total-brand level. Individual categories will reveal more mysteries.

Let's go to the bottom of the table, to the section titled "New vs. Existing". Here we compare new/existing items selling at/above their historical average, or below their historical average price point. When items are selling below their historical average price point, items are being discounted ... either via lower prices, or via marketing promotions that destroy pricing integrity and margins in one fell swoop.

New Items Selling At/Above Their Historical Average Price Point:

  • 37-48 Months Ago =   $9.1 million.
  • 25-36 Months Ago = $10.4 million.
  • 13-24 Months Ago =   $8.8 million.
  • 00-12 Months Ago =   $7.9 million.


Well, that's no bueno. After peaking two years ago, demand is on a straight downward trajectory.

How about new items selling below their historical average price point? 

  • 37-48 Months Ago =   $2.3 million.
  • 25-36 Months Ago =   $2.1 million.
  • 13-24 Months Ago =   $2.3 million.
  • 00-12 Months Ago =   $3.1 million.

Ah ... HA!  We have a story.

New items are not meeting expectations, so the brand is discounting and/or liquidating to move stuff.

The problem is worse with new items ... but the problem happens with existing items as well, just at a slightly different cadence.

Existing Items Selling At/Above Their Average Historical Price Point:
  • 37-48 Months Ago = $32.8 million.
  • 25-36 Months Ago = $31.9 million.
  • 13-24 Months Ago = $31.7 million.
  • 00-12 Months Ago = $28.8 million.


The problem starts 25-36 months ago (when new items performed best), but was stable the year after ... only in the past year did the problem really manifest itself.

Existing Items Selling Below Their Average Historical Price Point:

  • 37-48 Months Ago = $12.6 million.
  • 25-36 Months Ago = $10.6 million.
  • 13-24 Months Ago = $11.5 million.
  • 00-12 Months Ago = $13.0 million.


25-36 months ago there was minimal discounting/promotions. 13-24 months ago there was a modest increase. In the past year, yup, here we go!


It's been my experience that these issues are typically merchandise-centric, but when I see both new/existing items being discounted I at least have to research new customer issues and measure comp segment performance.

It's also been my experience that the problems are not "global" ... several merchandise categories are causing a problem, and it is common for the marketer to slap on a 40% off promotion across-the-board as a global response to a local problem, further amplifying the problem.



April 07, 2024

The 30,000 Foot View

Here's a "Class Of" Report for a Brand I studied ... it's for the total brand, looking at a high level ... 30,000 feet high. And yet, the stories begin to speak to us. Click on the image to make it bigger.


The top portion of the table shows us what top-line demand looks like by annual merchandise class. This brand is contracting ... from $54.6 million to $56.8 million three years ago ... then problems begin, down to $55.0 million, then $54.2 million, then $52.8 million. This is the point where people usually decide to hire me (you might be in that boat ... here's project pricing as an FYI ... so you know, your problems are usually merchandise-related, not marketing-related).

I include units sold, because it is common for the old adage "units = customers" to appear in these projects. Units sold are in decline as well, so let's page down to the bottom portion of the table, where I evaluate price per item sold by merchandise class. Here we go.

  • 49 - 60 Months Ago = $46.15 per item.
  • 37 - 48 Months Ago = $46.57 per item.
  • 25 - 36 Months Ago = $49.43 per item.
  • 13 - 24 Months Ago = $50.66 per item.
  • 00 - 12 Months Ago = $51.89 per item.

Yeah, the brand is walking prices up higher and higher. If demand is down and prices are higher, it means that units sold are down even more (which means customer counts are down even more - but that is a topic for another day).

Let's look at the average price of a new item by merchandise class.

  • 37 - 48 Months Ago = $48.05 per item.
  • 25 - 36 Months Ago = $47.60 per item.
  • 13 - 24 Months Ago = $53.56 per item.
  • 00 - 12 Months Ago = $50.50 per item.


Ew. Results are all over the board, aren't they? This tells me there are myriad stories to be told at a category level.

Here's the average price point of an existing item by year.

  • 37 - 48 Months Ago = $46.57 per item.
  • 25 - 36 Months Ago = $49.43 per item.
  • 13 - 24 Months Ago = $50.66 per item.
  • 00 - 12 Months Ago = $51.89 per item.

Existing products being sold are more expensive over time. It suggests that the brand is either raising prices or are discontinuing older items that are cheaper.

At 30,000 feet, there is a problem, but we're too far away from the problem. We need to drill down a bit. We'll do that tomorrow ... and Wednesday I'll publish another video for those of you who enjoyed that style of diversion from your daily routine.

April 04, 2024

This Is An Example Of Merchandising Yourself Into Oblivion

Let's look at a "Class Of" merchandising report for a brand. Tell me what you see (hint - look at the colored cells in the table).

Somebody messed up.

The class of merchandise from two years ago generated only $2.6 million in demand. That year, the brand contracted from $35.6 million to $34.2 million.

That's where the overreaction happened.

Somebody decided to discontinue a whole bunch of existing items (look at the old class of items from 4+ years ago), and the results were predictably awful ... those items dropped from $27.1 million to $15.5 million, tanking the brand. However, a bunch of new items were introduced, and they generated $8.6 million, making up some of the difference. Still, the brand contracted again ... from $34.3 million to $29.6 million.

Three things happened last year.
  • Once those old items are discontinued, they're gone. You don't get the $12,000,000 you gave up back. You have to live with that catastrophe for years.
  • The class from two years ago was meager ... you have to live with that catastrophe for years as well.
  • The bumper crop of new items from a year ago are paying this brand back, with more than $8 million in the second year (compare that to the new items from the year prior, which only generated $2.1 million in their second year).

This stuff happens all the time.

The marketer takes the fall too often for these issues.

Here we have a merchandising team (or multiple generations of teams who are progressively hired/fired) who spun the product roulette wheel without bothering to understand how customers might respond to the changes.

Yeah, this happens all the time.

P.S.:  I have a mini-project ($5,000) that combines my Elite Program runs with a Class Of Analysis by category ... if you think you might have a new customer problem, a customer retention problem, or a merchandising problem, this is a good starting point. Email me for details (kevinh@minethatdata.com).



April 03, 2024

Yeah, I've Been Busy

Plenty of work right now, and the Southwest Regional Pickleball Championships are happening in Mesa this week ... win your bracket and you earn a trip to Nationals. It's an event here in Arizona / New Mexico that you can't miss if you are a pickleball player ... more than 1,250 players are striving this week for an opportunity to advance to Nationals.

I ask this frequently ... but do you have an event (no, Cyber Monday is a confection, not an event that benefits you in any tangible way) that is all yours, that is so important that your customer must participate or feel significant FOMO?

If the answer to that question "no" or "well, Christmas is a big deal", then you know what your job is for the rest of the year ... it's time to create an event worthy of FOMO.

Sameness: Tell Me Which Companies Are Selling The Products Here

You want to see a completely tepid, bland, homogenized shopping experience? Yes! Ok! Tell me the brands that are represented here. Good luck...