Dear Catalog CEOs:
Take a look at the image below - this is from a recent simulation I ran - we're analyzing the migration of 1,000 call center buyers.
In three years, 81% of the demand from call center customer demand will still be sourced from the call center.
Back in 2006, 81% of call center customers would have migrated online within three years.
I can't over-state the importance of this trend, my friends.
Simply put, the transition of customers from old-school channels to e-commerce is over.
Yes, sure, customers are still migrating. But more important, the vast majority have completed their migration. This has huge ramifications for the businesses we manage.
Ramification #1: The catalog is changing. Call center buyers (unless you're buying a $500 item that requires human contact to complete the transaction) are largely Judy or June ... in other words, age 55+. These customers have very different needs than Jennifer or Jasmine. There is nothing wrong with creating separate business units that target June / Judy ... the 55+ call center buyer. This will be a lucrative niche, one that may have a 20 year shelf life of profitable opportunities. Tell me what is wrong with that? You do not have to serve all customers age 18-98.
Ramification #2: The catalog has some meaning to Jennifer, minimal or no meaning to Jasmine. Back in 2006, online buyers happily shifted back to the call center (and vice versa), leading to multi-channel nirvana. But once the customer is fully trained to use e-commerce and online channels (especially email), the catalog becomes a secondary demand driver. There's huge cost savings to be had here. In fact, you can pay for free shipping with hurdle promotional program (all year) by taking advantage of the cost savings here. Surprisingly, not many catalogers want to take advantage of this opportunity, because if "feels" wrong to not mail catalogs to customers. In 2013 and 2014, catalogers have an opportunity to shift dollars from unproductive catalog mailings to productive shipping tactics.
Ramification #3: The shift from e-commerce to mobile is coming. Outside of e-commerce, it's already happening. Maybe this won't be on a phone, but it will be somewhere between a 4" display, a 7" display, or a 10" display, +/-. We've been experiencing channel migration for forty years ... we went from mailing in checks to call centers with credit cards (that was a huge transition) ... we went from call centers with credit cards to e-commerce ... now we're going from e-commerce to an intermediate device (maybe tablets). By the way, this doesn't guarantee that tablet commerce is the next step. Lots of people are going to try lots of different ways to get customers to shop on intermediate devices ... the customer is going to choose the "right" device / experience combination. Regardless, customers are always migrating from older channels to newer channels ... it's been happening for decades (or longer). E-commerce experts keep bragging about posting +10s and +20s year after year after year ... strongly benefiting from the shift from call centers to e-commerce. The same dynamic is going to haunt e-commerce experts when mobile arrives upon a preferred method of demand capture with customers.
Ramification #4: Channel migration business skills will be VERY important. There will be leaders who know how to manage transitions between channels ... these leaders know the inflection points where/when the organization must pivot. With the call center to e-commerce transition complete, there will be opportunities for business leaders with knowledge of this transition to apply leadership skills to the mobile device transition. Quite possibly, these skills will be ignored by the younger generation of mobile experts (increasingly, extensive old-school skills are ignored in favor of new-channel experimentation) , but that doesn't mean that the skills aren't valuable.
Ramification #5: Nothing is directly attributable anymore (and it's been this way for awhile). Measurement gurus will strongly disagree with me, and that's fine. In the old days, you put a key code on the back of a catalog, and you tracked the demand associated with that code to the catalog that caused the order. Sure, there were problems with this methodology, but the problems were in the +/- 15% magnitude. Today, everything is measurable, and yet nothing is definitive. It's a paradox. And it's ok. You have a marketing budget, you kind of know in total what you're marketing efforts are generating. Leadership needs to, believe it or not, leverage gut instinct, when managing the transition from older channels to newer channels.
Ramification #6: Simulations will become important. When nothing is directly attributable, it becomes very hard to understand "what to do" or "when to do it". Simulations will allow business leaders to make decisions in a safe environment, playing "what-if" games.
Ok, time for your thoughts. Please offer them in the comments section of this post.
Here's a common situation that supports reactivation efforts. When you acquire a new customer, you might have the following metrics over...
It is time to find a few smart individuals in the world of e-mail analytics and data mining! And honestly, what follows is a dataset that y...
Here's a common dynamic in my projects ... see if this happens at your company. Your average price point is $40.00. Customer response...
I always face a challenge from marketers when I talk about implementing a Welcome Program. When I tell marketers that a Welcome Program gene...