Maybe you remember 2001. I sure do.
There's a reason catalog brand put all their chips in the middle of the table, betting on "multichannel". Coming off of the internet bubble, companies were faced with a series of decisions regarding the online channel. In many companies, online staffers worked in different buildings, or on different floors of the same building. They operated a different promotional calendar, one chocked full of 20% off plus free shipping offers that tempted existing customers to shop the emerging channel.
I was hired in 2001 at Nordstrom as Vice President of Direct Marketing. Our Executive Team inherited a $300,000,000+ catalog/online business that was losing more than $30,000,000 profit per year.
Just let that fact sink in for a moment, will you?
An established and profitable company being taking on those kind of losses, with an existing infrastructure in place?
So, back in 2001, you had a group of business leaders who had one job, and one job only ... fit the existing business model and the new business model together, NOW, and make it profitable.
This was happening all across our industry. The old-school folks, by and large, won that battle, simply on the basis of profit ... existing channels were considerably more profitable, at that time, than emerging channels.
Now, as long as business leaders evolve and change as market conditions change, an "integrated" or "multichannel" approach may make sense. By and large, we didn't do that.
Eleven years later, we're at an interesting crossroads.
In so many ways, the tables have turned.
Some folks will tell you that without the catalog, they'd be out of business.
Other folks will tell you that they've run the numbers, and it shows that the catalog is simply generating break-even demand, that without the catalog, the business would be half as big and just as profitable.
In the latter situation, which you see as much as a third of the time, what do you do? You have a significant staffing dilemma here, don't you? Tons of bright, highly qualified people, bursting with skills, skills that will need to find a place in a future business model dominated by Jennifer and Jasmine.
I run five year business plans for folks (contact me for your own, customized five year forecast). We simulate what might happen if the catalog didn't exist, or if it only existed for the "Judy" portion of the file.
You might want to think about this topic ... a five year business plan ... one that considers what happens if you expand catalog marketing or drop catalog marketing or modify your catalog marketing plan in some way ... one that factors in search and email marketing ... one that explores the potential of newer marketing channels.
Who in your organization is responsible for crafting a five year sales plan? What tools does that person use? Do you have scenarios ready to share with your CEO/President/Owner?
There's the obvious reason why we "celebrate" Memorial Day. And then there's the secondary outcome ... an unofficial ...
RFM is great for targeting one catalog to one customer. However, RFM is tough to manage in a multichannel environment. This becomes clear ...
If you don't like geeky math, please skip this post, because I am about to show you how the sausage is made! I have eight variables in...
As I've mentioned previously ... " Forecasting is the sum of all knowledge possessed by the Professionals working for a compan...