February 11, 2019

Marketing Messed Up

That's frequently how calls begin.

But that's frequently not how the analysis ends.

One of the first things I do is measure merchandise productivity for new items and for existing items.

If you see this happening, you might have a marketing problem, sure, but you without a doubt have a merchandising problem that spills over into marketing.
  • New Merchandise This Year = $30.00, Last Year = $36.00, Comp = -17%.
  • Existing Merchandise This Year = $43.00, Last Year = $41.00, Comp = +5%.
  • Total Brand This Year = $73.00, Last Year = $77.00, Comp = -5%.
Do you see what happened there?

New Merchandise performed 17% worse than last year.

Existing Merchandise performed 5% better than last year.

The Total Brand performed 5% worse than last year.

We just diagnosed a merchandising problem, and we diagnosed that new merchandise is a problem.

Could there be a marketing problem? Sure. Go look at new + reactivated buyers and see if you observe a problem. But the first thing to do is dig into merchandising data, because in this case your merchants created a problem, and new merchandise becomes winning merchandise, meaning this problem is going to spill over into the next twelve months.

Our first instinct is that marketing messed up ... we'd like to think that because it's easier to fix marketing problems.

Our first instinct should be merchandise-centric. Go figure out what we did that caused customers to buy less.

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