Ok, I used my simulation model to illustrate what would happen to five-year merchandise lifetime value (MLV) if I was able to increase the number of new items in the top 55% by 10% (take items out of the bottom 45% and move them to the top 55%).
- Base 5-Year MLV = $1,824,039 per 1,000 new items.
- Improved 5-Year MLV = $1,971,593 per 1,000 new items.
- Improvement = 8.1%.
If the marketer just makes a concerted effort - featuring new items in low-cost areas (email, Instagram, home page, key landing pages) ... and follows through on delivering a 10% increase in good new items ... then Merchandise Lifetime Value (MLV) increases by 8%.
The best part of this? When merchandise productivity improves, marketing gets to spend more on fun activities because those activities have a better return on investment because the merchandise the customers will purchase becomes more productive.
This isn't rocket science.
And it is so darn easy to do.
Go do it!!!!