June 04, 2012

This Isn't What The Multi-Channel Pundits Promised Us: Age Distribution

Take a look at this chart.

The blue bars represent the average age of individuals in 2010, per data from the Census Bureau (click here for details).

The green bars represent what I see across about 65% of catalog brands.  If we exclude Kids businesses (for obvious reasons), the distribution frequently looks like what we see with the green bars.

Yes, this means that the average catalog shopper is old.

That's fine today.  Folks around the age of 60 have more money than folks around the age of 30, right?

For a decade, we were told that if we were "multi-channel", we'd be successful.  We just had to align all of our channels around the core business, providing an "omni-channel" experience that customers craved.


Aligning all of our channels around our core business caused our core audience to like us.  

It did not cause an entire generation of customers to even bother to consider us.  And that's about to become a huge problem.

We're stuck in a nasty feedback loop.  Customers age 50-69 love our products.  We measure the products customers love, then we get more of those products, products that 50-69 year olds love.  And with a 38% annual retention rate (average across 75+ clients in 5+ years of doing this), we have to find a TON of new customers each year.  Guess where we go to find new customers?  Co-ops!!  And who do the co-ops feed us?  Well, they feed us responsive names ... and those names tend to be 50-69 years old (and often rural ... just run a report for yourself and learn what's happening in your business).  What do the names that the co-ops feed us like?  Well, it's product presented and merchandised to 50-69 year olds.

We can't get out of this nasty feedback loop.

By forcing the multi-channel experience to revolve around the catalog, and by forcing our primary customer acquisition channel to align with the co-ops, we created the scenario illustrated in the graph above.

I know, I'm supposed to offer a solution to this problem.

But we don't want to hear the solution to the problem, do we?  That requires change.  And we don't want to change what we're doing.  It's fun to spend six months creating the Holiday catalog ... it isn't fun to create sixteen flash sales events a week, it isn't fun trying to build a business that caters to a 30 year old shopper (Jasmine), a business that uses the communications channels of a 30 year old shopper.

When I presented this problem to an industry expert back in March, the industry expert issued the following statement:

  • "By the time this thing blows up, I'll be retired."

By the time this thing blows up, I won't be retired.  I'll be busy cleaning up the mess.

It might be a good time for those who won't be retired in ten years to start developing a strategy for a mess that is a few years out, but is now nearly unavoidable.

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