Here's what seems to be happening.
If your customer is Judy (age 54-69), and you are a catalog-centric brand, then your version of "omnichannel" is using a catalog as the center of your universe. The catalog is almost more important than the merchandise you sell! All of your marketing programs are spokes, the catalog is the hub. Your Tuesday email campaign features merchandise that was offered in last week's catalog in-home window. Paid Search campaigns are designed to coddle customers who are driven to internet via a catalog. Your relationship with the co-ops, "data brokers" as you now know them from the 60 Minutes story, leaves you with a pool of customers who both love shopping via catalogs, and love merchandise targeted to a 54-69 year old customer. Omnichannel, as long as it fits within this context (a 54-69 year old customer sourced through the co-ops who has a Baby Boomer product preference) can work in the short-term.
If the customer is Jennifer (age 38-53), then the story changes. The elephant in the room is Amazon, a company that offers merchandise specifically targeted to Jennifer's lifestyle (low price, good service, rapid delivery, free delivery with Prime, few mistakes, high convenience). Here, the omnichannel narrative flips. The cataloger, catering to the 54-69 year old, executes omnichannel strategies that, in theory, should appeal to Jennifer. However, the tactics (emails, catalogs, paid search, social, mobile, free shipping or cheap shipping, slower shipping) drive Jennifer to Amazon. Amazon is going to be cheaper than you are. Amazon is going to ship faster than you are. Amazon is going to be more convenient than you are. You spend marketing dollars, Amazon reaps the return on investment of your marketing dollars. This creates a perverse dynamic, in that some of your marketing dollars fuel Amazon's success, while the marketing dollars that cater to Judy create your success - causing the co-ops to send you more names like Judy, which causes the merchandise that Judy likes to sell better, which causes your merchants to respond to this feedback loop by offering even more merchandise that Judy likes, which causes Jennifer to like your merchandise assortment less, causing Jennifer to simply choose Amazon when she has a need.
The problem gets worse by the time we get to Jasmine (age 22-39). The co-op / Amazon / Merchandise feedback loop that involves Judy / Jennifer creates a whole set of challenges for Jasmine. First, Jasmine could care less about the catalog being the hub of a marketing plan. If something is important to Jasmine, it will find her, in the same way that none of us watch the same news programs but the important news finds us anyway. Jasmine, however, is turned off by the typical cataloger merchandise assortment ... "that stuff is for old people" is a common lament I hear from Jasmine. When I spoke in London, I mentioned "Boden", and was told by a member of Jasmine's generation that "nobody even thinks about them". And that's a popular UK cataloger! For Jasmine, the co-op / merchandise feedback loop results in a merchandise assortment that is fundamentally distasteful. Most important, Jasmine won't buy from a cataloger because the cataloger's merchandise/story is not relevant to her.
Omnichannel strategies work (in the short-term, and "work" is a relative term) for Judy, because the merchandise is aligned with Judy's interests.
Omnichannel strategies don't work well for Jennifer, because the merchandise is somewhat misaligned, and when pricing is cheaper and products are shipped more conveniently through Amazon, Jennifer chooses Amazon (or Staples.com or eBay or Overstock.com or Nordstrom.com or Kohl's.com), causing catalogers to spend marketing dollars to chase the customer away from the cataloger. That's not an efficient way to spend money!
Omnichannel strategies cannot work with Jasmine, because the merchandise is fundamentally mis-aligned with Jasmine's lifestyle. Why use 37 marketing channels to drive Jasmine to merchandise that she could care less about? We spend and spend and spend and spend, and then offer Jasmine something she has no interest in. Omnichannel!!
In my contact strategy projects, I frequently recommend mailing more catalogs to Judy. Yes, more! I'm talking increases from 20 a year to 30 a year. Happens all the time. Judy's needs are being under-served by the vast majority of marketers. Modern marketers have given up on Judy. Catalogers have a short-term opportunity here, but it comes with a price - Judy will be retiring soon.
In my contact strategy projects, I frequently recommend mailing Jennifer only 3 times a year. Yes, 3 times a year. Why invest all that money driving Jennifer to Amazon, when you already have a website (that Jennifer is choosing not to visit), and mail/holdout tests prove that Jennifer will spend 50% to 70% of her money without ever receiving a single catalog?
In my contact strategy projects, I frequently recommend mailing Jasmine only 1 time a year. The merchandise alignment issues with Jasmine are too great to overcome. Catalogers would be better served by creating separate brands for Jasmine, featuring merchandise that Jasmine likes, via marketing channels that are part of Jasmine's lifestyle.
Yes, your omnichannel strategies should work.
But your omnichannel strategies cannot work if the merchandise is aimed at Judy - you simply drive Jennifer to Amazon, and you are not relevant to Jasmine.
That's what seems to be happening. It's the dynamic that causes omnichannel strategies to fail, repeatedly. It's the dynamic that causes catalogers to shrink circulation by 40% over the past seven years. It's part of the dynamic that helps Amazon grow ever-stronger. It helps explain why so few 22-37 year-olds shop the websites of catalog brands.
It can all be fixed with a merchandise-centric view of the world. Not a channel-centric view of the world, but a merchandise-centric view of the world.
Excluding the minority of companies that have been unimaginably blessed by a worldwide pandemic (I'm looking at you Walmart and many on...
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...
Say you manage a paid search program. Last month you spent $100,000 and the following happened. Cost = $100,000. Clicks = 200,000. Co...
Two weeks ago I ran a poll on Twitter, asking if users calculated the profitability of their marketing efforts. 32% said "no"...