Bypasses and Tolls

This is a map of Peoria.

Traveling East or West on Interstate Highway 74, you are given a choice outside of Peoria.

• Stay on I-74 and go through Downtown Peoria.
• Take the Bypass via Interstate Highway 474.

Be it life, marketing/e-commerce, or pickleball, I'm surprised how few people are willing to take the bypass.

I spoke at a conference pre-COVID ... the professional eagerly approached me and said "I am sure looking forward to hearing the best practices you'll offer us today!" Well, I don't communicate best practices. Best practices are for those who lack imagination. They are tactics vendors communicate to make sure you use vendor services.

Make sure you take the bypass before everybody else figures out that the bypass exists.

In modern e-commerce, once you figure out the bypass, somebody will tax it with tolls. Just like I-294 or I-355 in Chicago, somebody will figure out that the bypass is the better option and they'll charge you money to drive on it. Remember Facebook? You had all that organic activity back in 2009 ... and then POOF, it's gone ... you had to pay Facebook for access to the very customers you willingly steered to them ... for free. Omnichannel!!

• Why did you ever let Facebook get away with that stunt?

There's a whole side of the vendor world that wants to help you. Then there's the minority of vendor professionals who want you to pay a toll. They want to get paid for your hard work.

When the route through town becomes too congested, you take the bypass.

When they place a toll on the bypass?

You build a new route.

This is where we are now.

• The paper/printing/postage folks want more from you to maintain their craft.
• Facebook / Google want to extract every penny, within reason ... they know the exact balance required to make them money while optimizing how much they can get from you.

It's time for you to build a new route.

It's Not Even Available

The omnichannel thesis demanded that you sell the same items in every channel at the same price ... and if the item is backordered you pull it from your website so you "don't disappoint the customer". Which of course was "code" from vendors to use software to improve your supply chain and then have outstanding website functionality that required more 3rd party payments.

Others stuff omnichannel theory in the meat grinder. Headphones.com (yeah, them again) has been hyping this new iem for a month ... it was available for the first time two weeks ago. It's draped all over their home page.

Buy it now? You bet! Look what happens when you try to buy it now.

Oh, it's sold out. If you want it, you can pay now to reserve it.

It is really that popular that they couldn't procure enough units to get through the first week? A quick check of the internet suggests other websites are backordered as well ... however ... this could be a marketing ploy to limit inventory to create a buzz. If so, it's another hybrid marketing/merchandising tactic to create FOMO.

I wanted to see if Headphones.com posted a review of the item. When I get to the review page, I find a new review (via an in-house influencer) of a seven-year-old item (click here: https://headphones.com/blogs/reviews/sennheiser-hd-569-sennheisers-best-kept-secret). They're reviewing items that are seven years old. When is the last time you bothered to communicate to your customers how much you love seven-year-old items you sell?

A few weeks ago, an Executive emailed me, telling me he was "locked into his paper contract for the rest of the year". Think about that statement for a moment. Catalog brands are locked into inflexibility ... meanwhile your online competitors are creating FOMO over a brand new item (which is allegedly sold out) and a (checks notes) seven year old item.

• Brand A is marketing to satisfy a paper rep.
• Brand B is creating FOMO over new items and seven-year-old items (the older item being hyped by an in-house influencer), sans paper.

This is where some of my readers will tell me that the print-centric brand "can" hype new items and seven-year old items. True. Describe why it doesn't happen.

These are subtle differences in selling that result in big differences in how a brand is perceived.

P.S.:  Did you read about the omnichannel catastrophe known as Walgreens (click here: https://x.com/cnnbrk/status/1806299944929611811). A quarter of their stores are unprofitable, many of those stores will be closed. Apparently things aren't great at the corner of happy and healthy. Meanwhile, have you heard the Amazon Pharmacy commercial on (checks notes) radio? On radio! They talk about standing in line at the pharmacy, hearing the guy complain about his gout ... "the only thing more painful than gout is having to listen to somebody talk about gout". Amazon is using (checks notes) radio to force Walgreens to close more stores. Omnichannel!!

You Wake Up One Day, And You Realize Change Happened To You

Can I show you what I watched on Tuesday night while writing Elite Program papers?

It sure wasn't linear television via YouTube TV.

I start with an eight minute daily show outlining the world of dirt late model racing and dirt sprint car racing.

I know, I could do screen shots on my laptop, but you have to remember, I'm writing Elite Program papers right now.

Up next? Watching a 5.0 level 13 year old play pickleball with his Dad.

Then it's a half-hour daily show from an ag company outlining weather patterns across the United States, the Pacific, and the Atlantic.

And finally, it's the Men in Blazers featuring an appearance by Michael Davies, sporting his L.L. Bean attire.

All this seemed perfectly normal to me until I realized that prior to COVID, I would have done NONE OF THIS WHATSOEVER. I'd be reviewing a network television guide featuring a prime time game show called The Quiz With Balls (yes, that's a thing).

I realized that change happened to me. It happened slowly, then all at once.

It's like all of a sudden realizing that Alibaba is doing more than a hundred billion dollars of worldwide commerce.

My working hypothesis is that when we were sent home for COVID, we immediately began inventing the future. It took years for all the puzzle pieces to fit together, but when it finally fit together, wooo boy did things change. It happened behind the scenes ... and then all of a sudden ... there it is!!

You'd be interested to know that my client list is a U-shaped curve right now ... either performance is awful, or performance is off-the-charts spectacular ... very few folks in-between. Those on the positive side of the "U" are doing things differently. They have a marketing hook, they have a product hook, they have a community hook (which is why I keep talking about this), and they often have an in-house influencer who is the "expert" of the brand ... is the person who is trusted, is the person who potential customers look up to. They've accepted change.

The "community hook" is something I will continue to share with traditional brands who view customers as "lists" or as a "housefile". Your community represents your better customers who want to interact with your brand and help potential customers. You community solves problems. Your community recommends new products/services. You have at least one individual, often a half-dozen +/- who manage the community. Think of the community as your "list" of great customers, brand advocates, and future customers. When you think of it that way, you become very interested in managing your community, right?

Anyway, 2024 is one of my favorite years in marketing, to date. It's just so fun to see what people are doing.

History Repeats ... Change is Coming

I see this ...

 

... and I think back ... for instance, to 2007, when Don Libey discussed exporting knowledge of how to execute direct marketing to people in China and India: https://www.dmnews.com/libey-says-rate-increases-declining-prospecting-monster-dm-trends/.

He also nails the challenges associated with the paper / printing / postage ecosystem and third party vendors.

Yeah, in 2007.

History repeats.

P.S.:  Watch the Euro soccer matches and you are inundated with AliExpress ads. These folks have more money than the GDP of Bolivia. I sense a seismic shift in e-commerce is on the horizon. While you raise prices to counter inflation, the complete opposite is happening elsewhere. Surely Amazon sees the future. And yet, you're helpless to fight the future.

I See Dead People

From LinkedIn, where I wrote this on Sunday: 

https://www.linkedin.com/posts/minethatdata_kendrick-lamar-starts-his-screed-against-activity-7210702809925570560-Fhwi?utm_source=share&utm_medium=member_desktop.

Yes, I'm testing something here.

An Example of Hopping on to Chat With Your Community

Do you have a community?

Do you have one off-platform?

Here's an example of a Sennheiser product manager hopping on Reddit to chat with his community. It went well (click here).

Every one of you has a product manager / marketer / merchant who would love to have individual communications with your community. What stops you from doing what Sennheiser did here?

P.S.: I share this stuff because the number one complaint I get from readers is that marketing channels are now too expensive and unreliable. Agreed. So work around them. Invest in alternate methods today so you aren't dependent upon high cost channels tomorrow.

P.P.S.:  They also have 140,000 followers on YouTube and have a nice series called "Beyond the Curve" (click here). You are a media company ... start acting like one.

Do You Want To See What You Are Interested In?

The stats below represent data through about Noon Pacific Time on Thursday.

Ok, I wrote about the E-Commerce Priority Grid (click here). There were a whole bunch of links in the post ... I put the links in there to measure what you are interested in. There is what I want you to be interested in, there is what you are actually interested in. Those things don't always align, and it causes me to be flummoxed when you aren't interested in something central to the plot.

Here are the number of actual clicks ... actual clicks in this post are about 1/3rd of normal, and that fact alone causes me sadness.

• 38 Clicks on the Actual E-Commerce Priority Grid.
• 33 Clicks on AliExpress.
• 27 Clicks on Temu.
• 38 Clicks on The North Face.
• 0 Clicks on Lume.
• 58 Clicks on In The Company of Dogs.

This was my expectation.

• 20 Clicks on the Actual E-Commerce Priority Grid.
• 100 Clicks on AliExpress.
• 100 Clicks on Temu.
• 20 Clicks on The North Face.
• 150 Clicks on Lume.
• 50 Clicks on In The Company of Dogs.

The point of the article was to get you to think about AliExpress / Temu / Lume. I mean, Lume went from $0 to $100,000,000 in seven years. Do you want to grow at that rate?

Your preferred path was In The Company of Dogs / The North Face.

Interesting.

E-Commerce Priority Grid

In my project work, it is increasingly clear that there are four types of e-commerce businesses. I represent each business in the grid below.

Let's think about each business model.

Pay 3rd Parties For Customers / Focus on Promotions/Campaigns

• "I see dead people".
• This is the land of AliExpress (owned by Alibaba) and Temu. Two days ago each brand offered an iem headphone that cost $15.99 on Amazon for $5. Marketplaces!
• It's over. Not just for you, but eventually for Amazon. These folks will gamify you (and Amazon) into oblivion.
• You cannot compete when you are in bidding wars for customers against enormous brands possessing bottomless budgets. It's over.
• You cannot compete when you sell something for $19.99 and Amazon sells something comparable for $14.99 and AliExpress/Temu sell something comparable for half the price Amazon sells the item for as part of their endless item-level promotions.
• DO ... NOT ... TRY ... TO ... SUCCEED ... IN ... THIS ... REALM.
• "I see dead people".

Pay 3rd Parties For Customers / Focus on Merchandise.

• This is the common e-commerce business model ... where the "digital experts" roam the Earth.
• Think of The North Face as an example. Yes, there is a brand-centric selling approach to their merchandise, maybe that is necessary when you focus on merchandise and don't focus on discounting. You'll pay for success somewhere in the p&l.
• Lume is another example. You can't avoid that woman yelling PITS, PRIVATES at you on commercials if you still watch linear television. They're north of $100,000,000 in sales in seven years. And interestingly, they have some semblance of community on Instagram (194,000 followers ... think about that). Go to their website, you immediately see a focus on best sellers (hint - they care about merchandise).

Generate Your Own Community / Focus on Promotions/Campaigns

• REI and their co-op model, paired with promotions and campaigns (20% off Experiences, Earn 5% via their Loyalty Program, their Outlet etc.

Generate Your Own Community / Focus on Merchandise

• Apple
• Lululemon
• Headphones.com
• GoPro

I get it ... those who generate their own community also pay Google/Facebook for customers. But they don't "have" to do that ... they already have a community of avid customers and prospects.

Let's think about an example ... how about In The Company of Dogs.

• No social media presence to speak of (so they're not a community-based brand, are they?).
• 40% off on the home page.
• Sale on the home page.
• Sign up for emails (that's a community) and get 10% off your first order (that's a promo).
• Click on item after item after item and you'll see at the bottom "write the first review" in small print. No community.
• You can get free catalogs on their website, so they are focused on promotions/campaigns.

In all likelihood they are a bottom-right quadrant brand.

• "I see dead people".

Unless there are changes, they're dead, they just don't know it yet.

Where does your business fall on this grid?

I Just Don't Understand It

E-commerce pros ... I'll address you tomorrow.

Can I share something with the rest of you?

I'm as busy right now as I've been in six years. It's because of you. All of the catalog professionals who read this, who are dealing with a lot of moving parts right now, who are frustrated, who want to know what the next several years look like. You are worried that the 30% cost inflation you've experienced over the past three years ends your discipline in three more years. 

You already know the answers to your questions.

Online, in the socials, I run across your support network ... paper reps, printers, boutique catalog vendor professionals. Their communications are in stark contrast to your concerns. I just don't understand it. They craft narratives.

Narrative: The USPS is the problem, not us. We're all in this together ... against them.

• I'll let them have that one. But it's such a tiny, tiny issue, and it cannot be solved. No amount of trips to Washington DC, no matter how holy they make you feel, will make any difference on the future. And it doesn't change all of the other issues, all of the other ways your paper partners and printers sent you down the river.

Narrative: The reason direct mail (and specifically, catalogs) don't work is because marketers don't know how to use them properly. Marketers are the problem, not the discipline.

• This is such a poor response. Empty. Lacking understanding. Lacking empathy. Fully incorrect. It allows the vendor to hold the moral high ground.
• One of your "trusted partners" told me this (marginally paraphrased) ... "It is true, they just don't know what they're doing in direct mail and catalogs and they're part of the problem. If they did things the right way, there wouldn't be a problem".

This narrative is everywhere right now. They write about it frequently. Check LinkedIn for a cooking reference, FYI.

Narrative:  Direct Mail works.

• Direct Mail can (should) work with customers age 65+.
• Direct Mail can work when communicating overwhelming benefits to a customer that the customer cannot ignore (i.e. Nordstrom's Anniversary Sale).
• Outside of those situations, it no longer works. It's over. If print worked, you'd see it everywhere. Instead you see contraction. The paper/print industry contracted dramatically in the past 15 years. Just ask them. And where it hasn't contracted, it evolved toward supporting Amazon (i.e. boxes).

Narrative:  All generations love Direct Mail.

• Wrong.
• The laptop started the fire, the iPhone burned everything down. It's over.

Narrative:  We can help you be effective.

• For some companies, yes. Go get 'em!!
• For most companies, absolutely not. It's over. It's over. Admit it.

Narrative:  We can cost engineer marketing to make Direct Mail effective.

• No.
• 2-3 years ago paper didn't exist for catalogs. That's on your paper rep. It's his fault. Fully on him. His industry contracted and couldn't handle a small bump in demand, forcing my clients elsewhere. 
• 1-3 years ago printers couldn't even schedule your circulation job. Printers fired my clients (my clients have the receipts).
• It's hard to be a cataloger if you can't get paper.
• It's hard to be a cataloger if printing capacity doesn't exist and your printer fires you.
• It's hard to be a cataloger with 30% cost inflation over the past three years.

I'm fully on your side, catalogers. You've been treated poorly. You can see what is coming. You are making changes. And no amount of industry narrative to spin the truth otherwise will dissuade you from advancing into the future.

Paper Folks, Printers, Boutique Catalog Vendors - please join us.

P.S.: You're probably wondering what the future is. Nearly fifteen years of catalog optimization projects clearly outline the future. Here's what is coming.

1. If you have 100,000 twelve-month buyers today that you mail, you will mail 10,000 of them in three years.
2. If you mail 100,000 twelve-month buyers eight times per year today, you will mail 10,000 twelve-month catalog-loving addicts twenty-four times per year in three years. You might mail them catalogs, you might mail them loyalty information, but you will only communicate to a small number of customers who care. Everybody else is digital, and you will have to spend very little money on them to be profitable (hint - you'll be a media company to your community).

Disagree? Send me an email (kevinh@minethatdata.com) with your thesis.

P.P.S.:  Don Libey would be 80 years old, +/- today ... and he'd have a field day calling out the vendor industry on how they damaged my clients. It would be breathtaking.

P.P.P.S.:  I bring this up (and the amount of time I'm spending on this going forward will decrease, significantly) because I'm tired of you being blamed and criticized for something fully out of your control.

Just ... Classic

This happened about a decade ago ... a CEO hated, and I mean HATED "old fashioned" merchandise sold by a brand. So the CEO discontinued a bunch of long-term winning items, replacing them with what were called "fashion forward" items.

Sales dropped, almost immediately, by about 10%. The CEO pressured everybody to figure out "what was wrong", but everybody knew what was wrong.

Think about McDonalds ... what happens if they discontinue the Quarter Pounder with Cheese? It almost wouldn't matter what they replaced it with - they're gonna suffer a sales decline.

Anytime you want to reinvent your merchandise assortment you almost have to reinvent your customer file / community at the same time. Ticking off your existing customers while failing to cultivate new customers is just a classic recipe for trouble.

An Industry That Is Lost

Can I show you what it looks like when an industry is lost?

Here's Macy's.

JCP.

Chicos.

In the Company of Dogs. Not as dire as the other examples, but the message is clear.

Eddie Bauer.

Let's revisit a few of my hobbies ... how about headphones, what does Headphones.com feature?

Oh, a new set of headphones ... yeah, let's click through the pre-order button and see how much these bad boys cost.

Oh my goodness. $8,000. And I can only pre-order them. You are discounting like crazy and they're featuring an $8,000 set of cans that you can't even order yet. But yeah, let's keep adhering to the retail calendar for June.

How about Pickleball Central?

It's product focused ... on shoes. They're not adhering to the retail calendar for June, either. What's wrong with them?

You attract the community you deserve.

My industry craves building a community that will never, ever buy from us unless we cheapen everything we sell.

This is an industry that is lost.

Show some creativity.

Be proud of what you sell.

Best Practices? Probably Not. Sold Out? Yeah!

From time to time I share information with you from the fish monger in downtown Phoenix. And I know you'll tell me that they're a small business, you are a "brand" and therefore you cannot do what they do.

Wrong.

Look at the yellow-highlighted text below (they did the highlighting, not me, not exactly a best practice in email marketing).

"We sold a record number of them last week."

Here's the thing. You have a thousand styles or maybe seven thousand skus. For some of those styles, you sold a record number of them last week, right? It's mathematically impossible that you didn't sell a record number of "something".

Is there a reason you aren't proud of this fact?

Is there a reason you conceal these facts from your customer?

Why not tell your community exactly what is selling well, and create some urgency?

I mean, stop doing this.

Think about it ... that tepid message above tells the customer that NOBODY WANTED the junk they're forcing on you. Nobody.

My fish monger is telling you what customers care about.

You attract the community you deserve.

Disappointing Moments

Here's Headphones.com celebrating the release of a new closed-back headphone.

In the same email message, you can watch a review of the new headphones by one of their in-house influencers (you have a team of 5-6 in-house influencers ... right?).

Now, in my project work, I get to see how much new merchandise is sold via email marketing, and how much existing merchandise is sold via email marketing. That's when a small tear rolls down my cheek. It's obvious that too few of you speak to your community about new products ... for if you did, your community would buy new products via email marketing at rates higher than in, say PLAs or non-branded search.

My analytics are calibrated to quickly identify these moments ... these disappointing moments.

What in the name of Gimbels are we doing here?

Sure, if you sell something for $49.99 and either your merchant messed up or your inventory manager messed up, you'll have to liquidate it at $29.99. And when that doesn't work, the marketer is forced to move that item at $14.99. When you sell a $49.99 item for $14.99, your email marketing metrics look great. You want your metrics to look great. You'll do more of this in the future.

Is that the community you want to have? A community that buys a $49.99 item for $14.99?

Or would you prefer the community that eagerly awaits a new item selling for $349 (click here) in a crowded marketplace where the customer could spend < $25 and get something that is 90% as good (click here)?

You get the community you deserve. I'm a great example of that fact. 90% of those reading this message have never hired me ... some of you have been reading my content for eighteen years but have no intention of ever hiring me. That's the price I pay to attract the 10% who will hire me. It's particularly disappointing when I see other consultants or service providers copy my analytics and sell them at less than half the price I sell them at. That's my fault - I attract the community I deserve.

How would you describe the community you've attracted?

They're Lurking, And They're Fighting Back

One of my favorite moments as a Consultant happened several years ago when I, in a meeting, mentioned that I had more followers on Twitter than a billion dollar brand had. The point of the verbal barb was to communicate to the Leadership Team they were missing out on an opportunity to, you know, build their community.

Yeah, I saw an email a few days later from the Social Media team, sent to a distribution list of somewhere shy of 400 leaders. The quote? 

• "This guy doesn't get it".

Sennheiser doesn't have that problem, with more than 150,000 followers on Twitter (X) and an active presence in the headphone community.

So when a headphone reviewer with more YouTube followers than Sennheiser has Twitter followers reviews a new closed back Sennheiser headphone (and doesn't love it), Sennheiser is there ... lurking. And ... they're responding in a spicy manner when somebody who hasn't heard the headphones criticizes the headphones.

Video and Comments: https://www.youtube.com/watch?v=CzCbijx0wzs.

Every one of you operates within two communities.

• Those who are fans of the product category you operate in.
• Those who are fans of what you sell, sometimes even buying your stuff.

Sennheiser decided to not listen to the Lawyers ... they spiced things up and defended what they sell.

Look at this ... this influencer with nearly a million followers has good things to say about J. Crew. https://www.youtube.com/watch?v=TAG1KSboXYM. Where is J. Crew? Nowhere to be seen. Not interacting with fans of the product category they operate in.

I get it ... it's easier to pay Facebook or Google money for customers than it is to actually face your customers.

But if you are going to grumble that inflationary ad costs are hurting you, please consider all the things you can do for free. It's hard work, sure. But come on.

Halfway

Now, let's be fair ... most companies go about 15% of the way to where they need to go, it's hard work beyond 15% so we all just stop (me included, I should be working a lot harder), call it good and pay Google / Facebook some money. Done!

Here's what halfway look like.

All sorts of positives here ... relevant marketing (assuming people still care about the Olympics, which is debatable, this isn't the era of Mary Lou Retton, but enough people care to matter), apparel tie-ins, stories about athletes.

But ... Halfway.

What happens on August 1? The Olympics have been over for five or six days. All that work to create this "campaign". What next? And what do you do next year in late July when you don't have the Olympics to comp against? Now what?

That's why this is Halfway to where we all need to be.

If you do the hard work ...  building a community that adores you (and if you don't have a community, you're wrong, you're already getting there with your email subscribers), then the community is still with you on August 1 when the campaign ends. The campaign fuels your community. But the community is always there, regardless whether campaigns begin or end.

Surely Your Products Follow A Generational Tree

I thought you might enjoy this visual representation of how Hifiman got to the Edition XS headphones on sale for $379.

Surely ... you have products that are the result of generations of product development and a relentless pursuit of excellence. Right? So why aren't you telling your customer how hard you worked to get to this point in time?

Seriously?

Why aren't you communicating with your customer?

Are You Telling Me You Don't Have SOMEBODY In Your Organization Who Is THIS Person?

This woman has 923,000 followers on YouTube. Here's one of her recent videos. https://www.youtube.com/watch?v=5YQ9JjhgTG0.

Every one of you has an employee who has this level of PASSION. That's the person who should represent your brand ... that's the person who should be shouting from the rooftops why customers/prospects/community should be buying from your brand. Not sterile copy on page 14 of your catalog or on a page six levels deep into your website. No. This person! Somebody like this person.

What stops you from identifying this person within your company and then giving this person free reign to do whatever is necessary to grow your brand?

Email me (kevinh@minethatdata.com) with your responses.

You Have A Grumpy Customer Who Doesn't Trust You

Jimmy John's says "you have a free bag of chips in your loyalty account, use it or lose it by June 1".

Well, that was Saturday, and I didn't have to take advantage of free chips, but why not?

Like an idiot, I didn't know how my local franchise prioritized orders.

I'd soon find out how they prioritized orders.

Could I have ordered online? Yeah. Could I have ordered online and had my order delivered? Sure. But I'm an idiot. I got in the car and drove eight minutes to the nearest location.

When I enter the store, some guy is sitting at a booth. He informs me that it will be at least fifteen minutes before somebody takes my order because there is a large corporate order being fulfilled. I stood in P1 (position #1 in racing parlance) waiting to have somebody take my order. The three employees worked hard fulfilling this big order. They ignored me. For eleven minutes. Once there were four of us in line, they turned their attention to us.

Turning my order around was not "freaky fast".

I noticed something interesting.

When a new customer entered the store and said they placed an online order, the staff said "we'll prepare your order right now". That order jumped ahead of my order. The large corporate order was worked on in-between online orders. My order? Nope. 

Delivery orders were filled quickly.

More online orders were filled.

Eventually, they took care of my order. With a free bag of chips, I drove home, handing my wife her ham and cheese sandwich, entered correctly on the receipt.

Her sandwich was turkey and cheese.

Some of you reading this are good, high quality, kind digital marketers. You're working behind the scenes to make sure you provide a frictionless ... "freaky fast" process for your customers. You toss in a $3 bag of chips for free to stimulate a purchase, and guess what, your efforts worked!! 

And yet, due to issues out of your control, you have a grumpy customer who doesn't trust you.

I was always amazed during my time at Nordstrom how much Regional Managers (essentially an EVP-level job) and Store managers (essentially a DVP-level job or Sr. Director Job) were revered. They should have been revered. They kept the wheels on the bus. They were the ones who made sure standards were met ... and if they did a good job, the digital marketers were more effective. Regional Managers and Store Managers made everybody look good.