April 15, 2024

You're Not Doing It Right

Back in the 2001-2002 timeframe, I'd invite our list partners to a once-a-year summit. I'd line up some Executives to communicate the direction we were headed in as a brand, I'd share out department-level plans, and I'd ask each list partner to present how they thought our brand should evolve and how their brand could help us with that.

I recall in 2002 that the Executive from a co-op shared during her presentation that we needed, and I quote, to be "more Omnichannel". She wanted the same merchandise in all printed materials, and she wanted all customers to see the same merchandise. Same price, same merchandise, same customers. One brand. She wanted us to mail oodles of catalogs to retail customers (meaning she'd make more money for her brand).

There was one little problem with her thesis.

We measured her idea ... we had pieces where we tested same merchandise to same customers regardless of channel. Guess what? THE TACTIC WAS LESS PROFITABLE ... in fact, it was much less profitable. The best thing for the p&l was to tailor the merchandise in various pieces to the customers who liked the merchandise ... and at that time, retail customers liked different merchandise than the rural customer who liked shopping via catalogs. In fact, one of our biggest learnings happened during the 2002 Anniversary Sale, when my team mistakenly mailed our prospect catalog to our best customers and our large catalog to our prospects/lapsed buyers. Sales were virtually unchanged (about a million dollars less on a plan of $16,000,000 if I remember correctly). The fact that about half of our catalog pages generated essentially $0 changed how I viewed the effectiveness of catalog marketing. To this day, I use that knowledge to determine how many pages to mail a customer on an annual basis (click here for pricing).

I shared our data. The vendor Executive looked me in the eyes and said "well, then you're not doing it right".

I was always amazed when vendors would criticize what we were doing, and we'd have data to demonstrate that what we were doing was the most profitable answer. I don't care that you worked with Norm Thompson or Lillian Vernon and they did something unique in 1993, we're doing "x" and we've tested "y" and "x works better than y".

I have a lot of clients who want to know the specific tactics ... A then B then C then D ... that will allow them to be successful. I don't tell them the tactics. It's fool's gold. I don't work for your company and I don't know your customers. 

Only you know the answers.

I relished telling this Executive that we were discontinuing our catalog (back in 2005) because Management wanted to implement an Omnichannel approach, and Management decided that the catalog was not a profitable strategy within an Omnichannel approach. Even though I was largely losing my job and more than half of my team was being let go or being reassigned (i.e. my days at Nordstrom were nearly over), I had run the numbers and knew that the catalog had no place in an omnichannel approach.

We were much more profitable the year after we discontinued the catalog ... and a catalog that we thought generated 40%ish of direct channel sales, it turned out, generated about 3% of direct channel sales. Which meant, of course, that all of our testing was right and all of the attribution logic shoved down our throats by vendors was ... wrong. Now, did we get things wrong? Absolutely! We knew the customers who would stop receiving catalogs would spend less ... a lot less. We didn't know that reallocating that money to paid search would bring in so many new customers who liked our new merchandising direction, causing the direct channel to thrive. Life is a highway.

Don't let outsiders tell you that "you're not doing it right". You know more about your customers and your brand than they do. You are the expert.

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