I frequently talk about the 2005-2006 timeframe at Nordstrom, when we killed a traditional catalog business, pulling $36,000,000 of advertising out of the mail, and still grew net sales.
You try pulling $36,000,000 of advertising out of the mail and still grow sales! It's not easy. Especially if you don't have a plan.
I recall sitting in the office of the Inventory Executive at Nordstrom Direct. This was a well-seasoned professional. She had no faith in "the plan" - and for good reason - she was a "data driven" person, and the "data" suggested that without catalogs, you would not generate sales online. Yup, that's what the data said.
But there was a plan. Yes, it was a plan based on faith. There wasn't data to suggest that the plan would work ... this was 2005, after all.
- Stop renting names via the co-ops.
- Take Nordstrom names off the list rental and co-op market, permanently.
- Remove $36,000,000 of catalog mailings from the mail stream.
- Double the email frequency.
- Move $15,000,000 or more into paid search.
- Integrate the merchandise across channels.
- Work as a team - encourage in-store associates to promote the website.
- Produce a monthly catalog whereby each page was sold to vendors for $29,000 each - vendors picked the merchandise that appeared on the page.
That plan, as outlined right there, sure doesn't inspire confidence, does it? That plan had to recoup $150,000,000 in annual net sales. And when we mailed those vendor-funded catalogs and realized we'd only recoup $20,000,000 in annual net sales, well, geez, that didn't sound too good.
But then time progressed. Customer behavior shifted. We lost most of the customers who generated the $150,000,000 of catalog demand, and ultimately replaced them with $165,000,000 of online demand generated by customers who were much younger, and who liked the new assortment (which in many ways mirrored the retail assortment).
I get it. You come up with plans all the time - and your Finance team or Analytics team beat you over the head because you cannot prove that your plan will work.
Have a plan.
And have faith.
Yes, you're going to be wrong, often. But if you listen to the Finance team, and if you listen to your Analytics team, you will never make anything more than tiny, incremental changes.
Have a plan.