April 20, 2016


See the car below? That's what a 1971 Dodge Demon looks like when it is rebuilt, from scratch.

You may have run across those TV car auction shows, where a car like this might sell for $20,000 or $25,000 or $30,000. People have to have it ... it's like a brand new car, loaded full of nostalgia instead of airbags.

Now, this is what a 1971 Dodge Demon looks like when it is old, tired, and neglected.

Do you see the difference?

For some of us, especially those who followed the vendor / consultant / pundit / trade journalist playbook, we are like the rusted out vehicle above. Any cataloger / retailer with total sales growth under 10% over the past three years falls into this category.

Catalog marketing could look just like this ... and for some, it does.

With a car, you invest a lot of time, effort, and money ... and in time, the car is rebuilt. You have to invest in new parts (just like you have to invest in new customers and new merchandise). And for most of us, we have to hand the job of doing the rebuild over to somebody else.

In baseball, the process is similar. My Milwaukee Brewers were in first place in August 2014. Then they won a third of their remaining games, and missed the playoffs. Standing pat, the Brewers largely treated their team like the worn out Dodge Demon above ... and began the 2015 campaign with a record of five wins and eighteen losses. Since then, a rebuilding process was initiated. The manager was fired. The general manager "retired", and was replaced with a thirty-year old. Let that one sink in for a moment. More than half of the major league roster turned over. Star players were traded for prospects, prospects who will not play at the major league level for a few years, if ever.

The Cubs, Royals, and Astros followed this playbook. For a period of time, each team was HORRIBLE. Then, the young players made their way through the system, arrived at the big league team, learned the ropes, and some of them eventually performed at a high level.

What have we learned? 
  • If you don't rebuild a car, the car rusts out and is junked.
  • If you don't rebuild your baseball team, performance declines, and it takes longer to return to winning.
Back to catalog marketing.

Catalog marketing is fundamentally broken. Nobody will tell you this, because those who could tell you earn $$$ by having you do the same things the same way. They stay in business if you don't change.

A decade ago, leading brands in the catalog industry took a different path. They personalized their websites, they greatly cut back on catalog circulation, they reinvested the money in a diversified customer acquisition portfolio, and they made e-commerce the centerpiece of their business, coupled with outstanding merchandise. They used outstanding merchandise to attract new customers.

In retail, "fast fashion" is essentially a practice of using outstanding merchandise and newness and low price points to attract new customers.

The rest of the industry followed the preferred path of the vendor community. Customer acquisition became an algorithmic game that lacked thought or strategy (it's this way in e-commerce too, with Google and Facebook generating algorithmic names). Today, the co-ops that mastered the algorithmic game are dying, though nobody in the industry will tell you so because acknowledgement of the issue would send the entire industry into an outright panic ... look at your own co-op response over the past five years ... it is obvious that the co-ops are dying ... it is obvious every one of us must have a new strategy in place to find new customers before co-op declines overwhelm us. 

Then Victoria's Secret pulled $100,000,000 of catalog advertising out of the ecosystem. Notice that your vendor partners aren't publishing a lot of thought leadership pieces about that decision, but when JCP mails one (1) catalog, your inbox is populated with reasons why this is a "good" decision.

We are at the end of an era.

Nobody will acknowledge that we are at the end of an era, because it scares all of us to acknowledge it. How do we acquire customers if our preferred source of algorithmic names is drying up?

Catalog new customers have dried up.

Retail new customers are drying up ... that's why those folks are closing stores and are downsizing staff.

In time, e-commerce new customers via Google/Facebook will dry up as mobile, bots, and virtual reality consume e-commerce ... it will happen, we have history on our side.

We are pointing toward a complete rebuild of our marketing organization. We are going to undertake a rebuilding project, not unlike a sports team or a car enthusiast. You aren't going to like what I am going to say over the next several weeks. You will find every reason to tell me that I am wrong. Your vendor partners will tell you that I am wrong ("don't listen to him, he's against our industry, trust us."). But you are a professional, and you know that something needs to change. So let's get busy focusing on change.

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