I harp on Merchandise Productivity, and for good reason.
Now, you can get customers (via marketing) to add items to orders, and that's always a good thing.
The best thing, of course, is to sell stuff that customers want to purchase. Easier said than done. Getting more customers to buy stuff is really important.
But the results are indisputable. Look at this Marketing Budget Experiment. Here, merchandise productivity increases rebuy rates and new buyer counts by 5% for just one year. Just one year.
In year one (the year merchandise productivity increased by 5%), profit increased from $35.6 million to $39.4 million. An additional 52,643 customers purchased.
Look what happens thereafter. Remember, merchandise productivity returns to normal for each of the next four years.
- Profit is $1 million higher, then $0.9 million higher, then $1.0 million higher, then $0.9 million higher, then $0.8 million higher. That is "interest" being paid by having a good year!
- Customer counts are still higher ... compound interest for having a good year ... 17,090 then 15,242 then 13,715 then 13,007.
- Sales increased by $11 million in the year with good productivity, then increased $19 million thereafter.