June 15, 2011

Dealing With The Trends

I've shared these trends with you, many times previously.

Outside of a few folks nitpicking the results ("my twenty-four year old daughter just picked up the phone and shopped via a catalog, so you are wrong"), you aren't disagreeing with the thesis.

So, what do you do about it? 

First of all, recognize that the multi-channel mantra of one solution fitting all is not relevant in 2011 ... it might have been relevant in 2001 when all of this stuff was beginning to evolve.

Be honest ... if all of the multi-channel stuff really mattered, we all would have doubled or tripled the size of our multi-channel businesses over the past decade, right?

Now, the cataloger faces challenges.  

Customers age 55+ are still responsive to catalogs, but productivity will inevitably decline as the customer retires from the workforce.

Customers under the age of 45 are harder and harder to acquire via a catalog.  In fact, these customers are largely the reason for declining response rates and declining file sizes ... they are not easily acquired via catalogs.

Your co-ops respond to this by optimizing their lists based on response ... so the customers that you acquire tend to skew to 55+ rural customers.  This creates a self-fulfilling prophesy ... the customers we acquire are increasingly older.

So we have to identify audiences, based on behavior.  We have to reduce catalog mailings to customers who exhibit behaviors similar to the under-45 audience.  In many cases, we can mail more catalogs to customers who exhibit behaviors similar to the over-55 audience.  Yes, more catalogs.

When we reduce mailings, we have a choice.  We can mail fewer catalogs.  Or, we can mail smaller catalogs.  And as postage increases and the cost of paper increases, we'll get to fully explore these topics, in detail, won't we?

Over the next five years, we're going to deal with this constant cycle of "optimization", using the organic percentage to figure out where to make reductions.

Most important, we're going to figure out how the heck we sell merchandise to customers under the age of forty-five.  That may include a catalog, that may include online marketing, or mobile, or social, or Hologram Marketing in 2016, or whatever.  But we're going to figure this out, aren't we?

All These Little Taxes ... And Big Taxes Too

For twenty years, Amazon capably made a ton of profit ... they just didn't pass it on to shareholders ... instead, they reinvested the ...