Here are the metrics for total direct (catalog + online) sales and retail comp store sales.
- 1991 - 1999
- Direct CAGR = 17.1% annual growth.
- Retail Comp Store Sales CAGR = 6.0% annual growth.
- 2000 - 2005
- Direct CAGR = 16.9% annual growth.
- Retail Comp Store Sales CAGR = 3.7% annual growth.
All of us in the multichannel world need to step back, and contemplate the true relationship of the catalog channel, online channel, and where applicable, a retail channel. Not all businesses will follow the Direct channel growth rates observed at Williams Sonoma. But the transformation of the catalog channel into an online channel requires considerably more study than we give it today. The issue isn't really about whether a catalog drives business to the online channel. The real issue is how customer behavior is changing, and how we, as database marketers, respond to that change in customer behavior.
Multichannel pundits tell us what we must do to be successful. They tell us we must have catalogs, we must have an online channel, and we must align all merchandise, creative, pricing, and marketing along all channels.
The real challenge is figuring out what our customers really want, not what pundits tell us what our customers really want. And once we figure that out, we must consider whether we can afford it? Williams Sonoma must have done some fancy dancing to add the infrastructure of a website, and the costs associated with it, while all along not increasing sales at a rate faster than sales were increasing when only a catalog channel existed.
My observation (with no data to back it up) is that consumers now expect ecommerce functionality in addition to the print catalog, and that without it, the credibility of the brand is suspect. So even if it costs more, and does not increase revenue, it's simply a cost of doing business that mail order companies have to accept. Darn it.ReplyDelete
Thanks for the feedback. Too bad that other expenses (like people) sometimes get cut to pay for the online expense.ReplyDelete