August 30, 2009

J. Crew: Required Reading

If you want to move beyond the "three easy steps to running a multichannel business ... 1 offer great product, 2 make it available in all channels, 3 offer great customer service" punditry, and learn about real people talking about real issues in a real multichannel business, then read the transcript of the Q2-2009 J. Crew Conference Call.

The comments represent the horse sense that is sorely missing from those selling multichannel solutions, from those offering 140 character untested nuggets of wisdom on your favorite micro-blogging service.

For instance, did you know that 40% of the J. Crew online assortment is not available in stores? This violates best practice #1 of multichannel marketing --- "offer the same merchandise at the same price in all channels". And yet, the business is successful in a horrific economic downturn.

Did you also know that J. Crew is wiping out catalog circulation, down 36% vs. last year, violating best practice #2 of multichannel marketing --- "catalogs drive sales across all channels".

J. Crew also is also staying away from the markdown business, violating best practice #3 of multichannel marketing --- "offer incentives and promotions that are redeemable across all channels". Mr. Drexler mentions that once you get in that business, it takes decades to get out.

J. Crew violates best practice #4 of multichannel marketing --- "cater to the long tail of inventory, offering the best customers numerous options to satisfy their needs." J. Crew states that "excess inventory is worse than expired milk".

J. Crew violates best practice #5 of multichannel marketing --- "use multiple channels to grow market share". J. Crew states that you need 150% of the inventory to accommodate 100% of the customers.

Pay close attention to what multichannel leadership talk about, and compare it to what the micro-blogging community and vendor community talk about.

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