November 26, 2018

Merchandise Lifetime Value (MLV) - Incremental Improvement

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!!!!

Email Marketing and Discounts

It comes up over and over again. The email marketing team wants to maximize open rates (not profit, mind you, open rates). How does one...