December 01, 2013

Dear Catalog CEOs: The Nonsense Of Cyber Monday

Dear Catalog CEOs:

As you prepare to offer 30% off plus free shipping, or whatever nonsense the trade journalists encourage you to do so that trade journalists can generate additional page views that lead to advertising revenue for trade journalists, I want you to run a query for me.

Query #1:  For the past five years, sum Black Friday - Cyber Monday demand.

Query #2:  For the past five years, sum October + November + December demand.

Query #3:  Subtract Query #1 from Query #2.

I've run this query for numerous clients. The results are interesting. Here's an example:

Black Friday - Cyber Monday Demand:
• 2008 = \$1,500,000.
• 2009 = \$1,800,000.
• 2010 = \$2,200,000.
• 2011 = \$2,700,000.
• 2012 = \$3,400,000.
• 5 Year Compound Annual Growth Rate (CAGR) = 23%.
Looks like Cyber Monday works, huh?

October - December Demand:
• 2008 = \$23,000,000.
• 2009 = \$23,500,000.
• 2010 = \$24,000,000.
• 2011 = \$24,500,000.
• 2012 = \$25,000,000.
• 5 Year Compound Annual Growth Rate (CAGR) = 2%.
October - December Demand, After Subtracting Black Friday - Cyber Monday
• 2008 = \$21,500,000.
• 2009 = \$21,700,000.
• 2010 = \$21,800,000.
• 2011 = \$21,800,000.
• 2012 = \$21,600,000.
• 5 Year Compound Annual Growth Rate (CAGR) = 0.1%.
As the Black Friday - Cyber Monday timeframe grew in importance, the rest of the business struggled to keep up. In fact, the business featured here is failing - unable to grow demand during the other timeframes. In other words, demand is being cannibalized out of the October - December timeframe, into the Black Friday - Cyber Monday timeframe.

And guess what? The demand that is being cannibalized is full price demand, or lower-than-average discount demand. You take a full price order with free shipping from mid-November, and move it to a 30% off plus free shipping on Cyber Monday.

No, that's not #winning. That's nonsense. That's called #HurtingYourBusiness.

Why do we purposely hurt our businesses, just so we can be part of the #buzz?