October 04, 2017

Modern Scores: Staying in Business

For nearly twenty years, we've been taught by the vendor community that the customer demands an omnichannel experience that is integrated across channels and seamless. We've been taught that if we don't execute on this thesis, we'll be sunk by agile online brands.

We followed the thesis.

And we've largely been sunk by agile online brands.

We're now at a tipping point. We have to pick one of four paths.
  • Find a Partner.
  • Find a Buyer.
  • Do it Yourself, Low-Cost / No-Cost Customer Acquisition.
  • Do it Yourself, Pay Tolls.
When the Private Equity folks call me about a business, they largely ask two similar questions, over and over and over again.
  • Does the company have a low-cost / no-cost customer acquisition program?
  • Does the company have a merchandise assortment that can appeal to younger customers?
It's the same two questions ... over and over and over again.

So you'd be wise to craft answers for each question, so that if you decide to "Find a Buyer" you have a credible answer that is appealing to the company seeking to acquire your brand.

Here's what I did in a recent research project ... I assigned "Modern" scores to every item in the merchandise assortment. Here's what I learned.
  • 20% of the merchandise assortment is preferred by "Modern" customers.
That's not bad, folks.

That's enough to form the basis of a new brand ... a brand built on online marketing.

I know, I know, you've been taught that the customer demands an omnichannel experience integrated in a seamless manner across brands.


You should have been taught that it is your job to keep your company in business.

What better way to do that than to market the 20% of your merchandise assortment preferred by "Modern" customers as a separate line of business?
  • A new brand within the umbrella of the existing brand ... "Adventures by L.L. Bean" ... or "Pop-Up Boutique at Vermont Country Store" ... or "Nicole Summers by J. Jill" ... remember how catalogers created sub-brands back in the 80s and 90s?.
  • A new, fully independent brand.
Take the 20% of the assortment that is preferred by "Modern" customers, and market the living daylights out of it within the umbrella of a new brand ... or as a new brand altogether.

Leverage online marketing channels, tactics, and ideas with this new brand.

Take advantage of leveraging fixed / variable costs associated with your Finance, IT, HR, Marketing, Merchandising, Warehouse, Call Center, Creative, Website Ops teams ... you have the infrastructure in place to do this.

You hire marketing experts ... much younger marketing experts ... and you give them the 20% of your merchandising assortment that is preferred by "Modern" customers. Ask them to sell this stuff to "Modern" customers using "Modern" techniques.

What is so bad about this idea?

Your job is to stay in business. You are going to go down one of four paths:
  • Find a Partner.
  • Find a Buyer.
  • Do it Yourself, Low-Cost / No-Cost Customer Acquisition.
  • Do it Yourself, Pay Tolls.
This allows you to Do it Yourself ... and you use the portion of the merchandise assortment that "Modern" customers appreciate in combination with low-cost / no-cost customer acquisition tactics implemented by younger marketers that you supervise.

Again, what is so bad about this idea?

Try something!

P.S.: Stranger Things on Netflix - they teamed up with a mobile game developer to create a free game you can play leading up to the premiere in three weeks. This is more low-cost / no-cost customer acquisition activity designed to create interest - and it's catnip for media partners (click here). A Vermont Teddy Bear could do something like this, or you ... why not you??

P.P.S.:  Here's something for you to read ... about how to save the mall (click here). My opinion only ... the concept of integrating the offline/online channels into "one business" is going to be proven wrong ... we are going to move in the opposite direction, where the offline channel has to be about entertainment/experience in order to survive.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.

Customer Development: Price Increases and Items per Order

Recall the first two quantified relationships. What does the relationship look like for Price vs. Items per Order. As prices increase, custo...