December 27, 2007

Looking Ahead To 2008

If you had told me two years ago that 1,020 folks would spend the day after Christmas reading an article I self-published about the catalog industry, I wouldn't have believed you.

That's how fast the craft known as cataloging is changing.

2008 will be a year that demands change in the multichannel cataloging and retail industry.

A Conversation Is Happening All Around Us. Are We Listening?

When I wrote about Catalog Choice, an eco-friendly organization encouraging consumers to reduce catalog mailings, leadership from Catalog Choice left comments for our community to read. The DMA and ACMA did not participate in the discussion.

In 2008, multichannel catalog and retail organizations will be forced to monitor what is being said about them, and might even begin participating in the discussion.

In 2007, when I wrote about multichannel catalog and retail organizations, I noticed a half-dozen or so visits from the brands I wrote about, within six hours of publishing an article. Some of you are monitoring what is being said. In 2008, some of you will actively participate in promoting your brand in a positive light. For catalogers, this will become an essential part of the marketing mix as eco-based organizations pressure us to change.

We Will Upgrade Our Information Infrastructure In 2008

Multichannel catalog and retail organizations spent most of the past decade installing an e-commerce infrastructure. In 2008, we will embark upon an overhaul of our information systems. No more mainframe-based reporting systems, or weekly updates of customer information. We will start the process of integrating clickstream, e-mail, call-center and retail information into one real-time customer database.

It will also become painfully obvious that we can no longer manage our brands on the basis of key codes. This realization will cause pain.

We'll also figure out that we truly know little about the long-term impact of our marketing decisions. We'll realize that we've been led astray by our hyper-dependence on matchback algorithms, and will begin to put the analytic infrastructure in place to understand the combined impact of traditional marketing, catalog marketing, e-mail, search and online marketing.

We will be baffled and confused by what we learn, because what we learn won't tie out with what we've been taught about "multichannel marketing".

We Will Realize That People > Systems/Software

In 2008, we will realize that systems and software give us the capability to do great things, but people are what really matter. Many will invest in systems and software to obtain a competitive advantage. Some will outsource customer intelligence to co-ops, list processing vendors, or inexpensive oversea analytics organizations. The best brands will pay a premium to have the brightest individuals work for them, either on-staff or via flexible contract arrangements.

We Will Realize We've Given Too Many Folks A Seat At The Executive Table

In 2008, catalogers will realize that we've given up control of our own destiny. A power struggle will begin to form in 2008. Catalogers may (should) form unusual alliances with competing catalog brands to "have a say" in our future.

Catalogers will realize that a host of silent partners are actually pointing our brands toward a future that we find increasingly difficult to understand and control.
  • The USPS.
  • Co-Ops And List Processors, Even More So If They Run Analytics Or Host Your Database.
  • The Paper Industry.
  • Your Printer.
  • Your Search Marketing Vendor.
  • Your E-Mail Marketing Delivery Vendor.
  • Google, A Brand That Ultimately Determines Your Online Reputation As Well As Your Online Sales Trajectory.
  • Vendors Who Supply Best Selling Merchandise Lines.
  • Big Box Retailers Who Mimic Your Innovative Products Within A Few Months At Lower Prices With Better Quality.
  • Third Party Eco-Friendly Organizations.
  • Bankers Who No Longer Offer Easy Access To Cash For What Used To Be Called The Middle Class.

We Will Re-Learn How To Market In Difficult Economic Times

In 2008, we will have to truly compete for the attention of the consumer. No longer will consumers be running from retailer to retailer, flush with home equity proceeds. Economic downturns provide fantastic opportunities for innovative brands willing to embrace change.

We Will Be Torn Between De-Centralization And Centralization

In 2008, decisions will need to be made quickly. Very quickly. We'll find we cannot make rapid decisions with centralized control, yet we cannot control our businesses with rampant, de-centralized activity. We'll battle this problem for several years.

We Will Put The Concept Of "Multichannel" To Rest

In 2008, we'll realize that a decade of pundit-speak about having to be "multichannel" didn't result in improved sales, EBIT, or customer retention. Instead, we'll learn that we're simply going through an epic transformation in the way that consumers interact with brands.

We'll learn that free next-day shipping, free returns, fair prices and spectacular customer service mean a lot more to consumers than a beautifully-integrated e-mail, paid search and catalog marketing program featuring the same product and creative styling across all channels.

And once we realize that customer service matters more than multichannel marketing, we'll be playing catch-up with brands that have a huge head start in this arena (i.e. Zappos, a single-channel brand that dominates online shoe sales).

We Will Fiercely Cling To Tradition

We'll descend upon Orlando in May for the Catalog Conference (or the ACCM, per re-branding efforts from earlier this decade), eager to see how "other folks are innovating", but longing to go back to a time when cataloging was a beautiful and noble craft not being disrupted by the internet. As always, we'll adapt to change, but not without a heartfelt longing for the past.

What Does 2008 Mean To You?

Share your thoughts on how 2008 will bring change to the multichannel retail and catalog industry. What are the trends you plan to follow? How do you think our industry will change? What role will you have in the evolution of our industry?

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