March 30, 2023

Catalog QuickScores and Gift Buyers

One of the challenges faced by Catalog Brands is dealing with a Gift Buyer. A Category Development project shows that these customers are unlikely to purchase the rest of the year.

Pretend that Gifts are 10% of a July catalog ... while all other merchandise is 90% of the catalog.

Pretend that we have a customer with a Gift QuickScore of $70.00 and a General Merchandise QuickScore of $30.00. Pretend that Gross Margin Percentages are 50% for all merchandise.

  • Catalog QuickScore for Gifts = $70.00 * 10% of Catalog * 50% Margin = $3.50.
  • Catalog QuickScore for All Other Merch = $30.00 * 90% of Catalog * 50% Margin = $13.50.
  • Total Catalog QuickScore = $3.50 + $13.50 = $17.00.
Now, pretend we have a customer with a Gift QuickScore of $8.00 and a General Merchandise Quick Score of $92.00. Same Gross Margin Percentage of 50%.

  • Catalog QuickScore for Gifts = $8.00 * 10% of Catalog * 50% Margin = $0.40.
  • Catalog QuickScore for All Other Merch = $92.00 * 90% of Catalog * 50% Margin = $41.40.
  • Total Catalog QuickScore = $0.40 + $41.40 = $41.80.
Mind you ... both customers are exactly equal in terms of quality ... but "what" you offer paired with "what" the customer likes to purchase results in two customers with two very different levels of value.

Seems like this is something you'd be interested in knowing, right?

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Oh, It Adds Up

Let's look at an example. You have a winning item. It sold 50,000 units last year at an average of $30.00 each, for $1,500,000 in sales....