Dear Catalog CEOs:
When we focus on the success of a direct business, we like to think about things like channels and customers.
We almost never read about merchandise. What a shame.
Last week, we talked about "Class Of" reporting, analyzing items that were "born" during a certain year.
In this example, take a look at how new items perform in the year they were born, and then look at how those items perform one year later.
- 2005 New Items = $4,883 per item. 2006 Performance = $8,501 per item.
- 2006 New Items = $7,650 per item. 2007 Performance = $12,243 per item.
- 2007 New Items = $7,566 per item. 2008 Performance = $6,780 per item.
- 2008 New Items = $7,275 per item. 2009 Performance = $8,070 per item.
- 2009 New Items = $5,043 per item. 2010 Performance = $5,722 per item.
There are two really important pieces of this puzzle.
- New items must perform at an acceptable level.
- There must be enough high-performing new items to drive future productivity.