December 09, 2018

Channels Influence What Sells

I know, I know, you are supposed to offer the same merchandise in every channel and create a frictionless omnichannel customer experience ... because that's what the customer wants, or so we are told. Then the customer goes and buys from Amazon anyway.

There are channels that customers prefer specific merchandise. Twenty years ago at Eddie Bauer, 40% of what we sold online was extended sizes ... yup, the customer didn't want to buy the XXL Tall shirt in a store, so he bought it online. 

It's no different today. Each channel possesses strengths, and each channel possesses weaknesses. You'll understand this when you evaluate future merchandise preference by historical channel preference.

Here's an example from a recent project.
  • Historical Preference - Catalogs = 37% buy from Merchandise Category 14 in the future.
  • Historical Preference - Online = 27% buy from Merchandise Category 14 in the future.
  • Historical Preference - Email = 29% buy from Merchandise Category 14 in the future.
  • Historical Preference - Search = 25% buy from Merchandise Category 14 in the future.
  • Historical Preference - Customer Assistance = 24% buy from Merchandise Category 14 in the future.
We learn that there's an interaction between customers who historically loved catalogs and customers who buy from Merchandise Category 14 in the future.

This is a big deal. Why?
  • Companies that try to evolve their catalog toward an "omnichannel merchandise assortment" are companies that have problems with catalog productivity.
In other words, the catalog can be really hard to change, because there's a predisposition for some customers to align with certain merchandise categories. When you homogenize the whole experience to please the omnichannel customer experience thesis, you erode profitability.

Let each channel cater to the customers who love the merchandise in that channel. You can offer the same stuff across channels, but you don't have to FEATURE the same stuff across channels, ok?

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