Nobody Expected This

Story time!

I've told this story before, but it is relevant here in 2026. It's 1998 at Eddie Bauer. Our stores were not performing well, our online/catalog business was abysmal. I was just promoted to Director of Circulation/Analytics. Within twenty-four months our Catalog Team of Executives would fix the catalog/online business, recording the most profitable year in the history of the division.

Retail was a different story.

Our bigger stores had something called a "Sport Shop", an homage to the outdoor heritage of the brand (today the casual part of the business, at least 80% of sales back then, is completely gone). If you looked at ordinary store sales reports by category, Sport Shop had a ton of square footage and a minimal amount of net sales. It was unprofitable.

Management decided to kill it. The current generation of LinkedIn experts would chime in with the #datadriven hashtag. Good idea! "The brand has a sales dashboard and the KPIs suggested this category is simply not needed - this is the very essence of letting data guide your decisions."

Six months after the category was killed ... square footage replaced by our late 90s mens/womens casual assortment, a funny thing happened.

• Existing Stores, No Prior Sport Shop.
• Mens Comps:  +2%.
• Womens Comps:  +2%.
• Existing Stores, Prior Sport Shop.
• Mens Comps:  -2%.
• Womens Comps:  -6%.

Tell me what you think happened?

Our Marketing Research team asked customers what happened. Here's what they learned.

• "When you took the Sport Shop away, you took away a shopping experience for my husband and I. He'd tinker in the Sport Shop for a half-hour while I bought clothes. Without the Sport Shop, my husband didn't want to waste a half-hour watching me shop."

Ooof.

Turns out the Sport Shop was wildly profitable but was measured incorrectly. We needed to measure the "spillover value" the category had. It attracted a browser (measured as $0) and it attracted a shopper (measured as $100 but attributed to Women's Casual).

Does this happen in your business?

Oh my Lord, does it ever happen!!

It happens every day on Instagram. That's where your browsers are ... no, not website browsers, actual browsers, people with no intention of shopping. It happens on YouTube when somebody is watching the video of one of your buyers traveling to Hawaii to meet with widget suppliers. It happens when somebody subscribes to the Substack of your Chief Merchandising Officer. I mean, all sorts of people have interesting Substacks that you wouldn't expect.

What is the category or marketing activity that bring in "browsers" who ultimately generate sales ... one way or another ... in a category that maybe doesn't deserve credit for the order?

BONUS STORY:  You probably read this little ditty yesterday. Ten years ago I fielded a phone call from an Agency Leader. At the time I was consulting with a large retail brand that mailed catalogs. The end of the conversation went like this.

• Agency Leader:  Management told me you told them to stop mailing catalogs to store buyers because holdout tests proved that catalogs had minimal value.
• Kevin:  Correct.
• Agency Leader:  God you are so stupid. Everybody knows that catalogs drive customers into stores.
• Kevin:  Mail / Holdout tests proved they didn't drive customers into stores.
• Agency Leader:  Well, I am calling to tell you that we are now the agency of record, and we are reinstating catalogs to store customers on day one.
• Kevin:  Ok.
• Agency Leader:  I am also communicating that the brand no longer is in need of your services. Is that clear?
• Kevin:  Yes.
• Agency Leader:  You know better. Goodbye.

The retail brand ultimately went bankrupt. Guess all those catalogs were, at minimum, unhelpful.

I distinctly remember the "God you are so stupid" comment. The arrogance and attitude of this individual ... the suggestion that all you had to do was override science (mail / holdout tests) with faith in paper. If the results of the test proved catalogs should be mailed, I'd have recommended more catalogs. Instead this brand drained cash reserves sending mindless / useless paper to force a customer who didn't want to go to the store to go to the store, siphoning off cash for the Agency, for Paper Reps, for Printers, and for the USPS in the process. 

Parasites.

Always do what is right for your client.