Case Study: Merchandise Chaos

There are simple reports I produce to introduce me to category performance. Below is a summary of five year's of demand/sales data by category. Prepare for chaos.

This is a company ("Beans" ... The Internet's Only Variety Store) that is lost.

Why do I suggest this company is "lost"?

There is no merchandise consistency within this brand. It is common for a handful of categories to be the "gravity" that holds a brand together. When I worked at Nordstrom, you'd have some mix of womens / mens / footwear / cosmetics that generally glued customers to the brand. It would have been crazy for footwear to be +40% and cosmetics to be -40% ... long before either category skewed beyond +/- 10% somebody would have been promoted/fired.

Look at Fashion ... Fashion is -46% IN JUST ONE YEAR! How does that happen?

Jewelry? It looks like it is being killed off. Same thing with Office. And Media. And Recreation.

Seasonal merch went from nothing to something to nothing.

Meanwhile, Table Top / Outdoor / Apparel Bottoms / Apparel Tops are not performing poorly.

I asked Paisley Ingram what happened?

From: paisley.ingram@beans.com
Sent: Tuesday, April 28, 2026 2:16 PM
To: Kevin Hillstrom <kevinh@minethatdata.com>
Subject: RE:  Five Year Category Performance

 

Our long-time Chief Merchandising Officer left the company four years ago to spend more time with her family. We wish her well in all endeavors. Her replacement left the company about two years ago to spend more time with her family. We also wish her well in all endeavors. Our current Chief Merchandising Officer is Sloane Montgomery. Sloane firmly believes in a focused assortment of favorites that customers love, and she is a strong believer in our apparel offering.

Thanks,

Paisley

______________________________________________________

 

From: Kevin Hillstrom <kevinh@minethatdata.com>
Sent: Tuesday, April 28, 2026 11:47 AM
To: paisley.ingram@beans.com
Subject: Five Year Category Performance

 

I took a look at category performance by year. It is obvious that something unusual happened 3-4 years ago, and again in the past year or two. Is there anything I need to know about your merchandising strategy as I dig into category performance?

Thanks,

Kevin

Case Study: What A Difference

Yesterday we talked about comp segment reporting. I can slice and dice the reporting ... in this case, I share comps for new merchandise and existing merchandise. What do the two tables tell you?

Starting in April 2024, somebody decided to not invest in new merchandise - comps responded accordingly. Of course, the most important months for Beans (The Internet's Only Variety Store) are November and December - the two-year comp in November is -49.4% for new merchandise. I mean ... that's business malpractice.

The two-year trend for new merchandise is -34.6%.

The two-year trend for existing merchandise is -1.2%.

Obviously I'm going to dig into category data, but I have to share what I've learned with the owner (Paisley Ingram). My email correspondence is listed below.

From: paisley.ingram@beans.com
Sent: Monday, April 27, 2026 9:06 AM
To: Kevin Hillstrom <kevinh@minethatdata.com>
Subject: RE:  New Merchandise and Existing Merchandise Comp Segment Results

 

I shared your tidbit with our merchandising team. They are frustrated with my marketing team. They are frustrated with copywriters. They are frustrated with the website. They are frustrated with tariffs. They are frustrated with AI. They are frustrated with overall business performance. I need to position this work as a way to make them look better instead of the work being an audit of their failures.

Thanks,

Paisley

______________________________________________________

 

From: Kevin Hillstrom <kevinh@minethatdata.com>
Sent: Monday, April 27, 2026 8:55 AM
To: paisley.ingram@beans.com
Subject: New Merchandise and Existing Merchandise Comp Segment Results

 

I had a chance to analyze comp segment performance for new merchandise and for existing merchandise during the past three years.

Over the past two years, new merchandise posted a -34.6% comp. Existing merchandise posted a -1.2% comp.

The data clearly indicate that the merchandising team made decisions to not source new products at a sufficient rate to grow your business the past two years. In upcoming days, I will dive into the data and identify categories where new merchandise investment did not meet customer expectations.

Thanks,

Kevin

Case Study: A Marketing Problem is Identified

We're busy analyzing "Beans ... The Internet's Only Variety Store!". Yesterday I ended the post with reference to a table from my Elite Program runs, called the "Comp Segment" table. There are two sub-tables within the table ... one analyzing new/reactivated buyers by month ... one analyzing how customers with exactly two purchases in the past year spend money in the following month. Here we go.

The top portion of the table shows us three years of comp new/reactivated buyer counts. If a customer purchases in a month, and I don't see a purchase from the customer for the twelve prior months, the customer is "new/reactivated".

Tell me what you see in the top half of the table?

Here's what I see. In 2024, comp new/reactivated buyers increased by 0.5% on an annual basis. In 2025, comp new/reactivated buyers decreased by 22.7%. This is likely a marketing problem. New/Reactivated buyers come from well-executed marketing tactics. We see modest decreases in November/December 2024, then consistent decreases through most of 2025.

Pay attention to November/December counts. What do you observe?

• Counts are very high in November/December.

In other words, this business is disproportionately skewed to November/December, which means that "The Internet's Only Variety Store!" is really a Christmas-based Gift-Giving store. All of the risk of the year is back-loaded into November/December. It is VERY HARD to run a November/December centric business.

Look at November 2025 ... counts are down 42.7%. This is a MARKETING problem. It likely means the CFO told the CMO to not spend money, without understanding how the business actually works. I could be wrong ... but that's the pattern I repeatedly see when I analyze Elite Program clients. When a business has an annual rebuy rate < 40%, the business must focus the majority of all marketing efforts on new/reactivated buyers ... and when the business fails to achieve this mission, the business struggles.

The bottom half of the table shows how much more/less customers who purchased exactly two times in the year spent in the following month. If we have five customers, four do not purchase ($0) and one does ($40), the average is $8.00 per customer. That's what is being reported above.

What do you observe in the table?

From April 2024 to August 2025, comparable customers spent less, consistently, vs. the prior year. This "can" happen when marketing dollars are reduced. This is "more likely" to happen when something changes with the merchandising strategy of a company.

Over the past two years, comparable customers are spending 22.9% less than they previously spent. That's unsustainable.

The two tables within a table tell a story.

• It is obvious that "somebody" decided that marketing should spend less money in 2025.
• It is obvious that there is a merchandising problem causing customers to spend less year-over-year.

Footnote:  When I woke up on Monday morning, I was greeted with three unsubs. All three were industry consultants (not people actually working for a brand like "Beans"). Two of the three were merchandising consultants. In other words, it was clear that I offended them. The same thing happened back in 2014 when I introduced Merchandise Forensics ... the most popular analysis project I ever sold. It is fashionable and easy to blame marketers for missteps. It causes uncomfortable feelings when you suggest that a merchant isn't perfect, but instead, is just like the rest of us.

Case Study: Interacting Challenges

Category performance comes later ... early in a project, I look for high level trends that help guide me to solutions.

I liberally borrow analytics from my Elite Program runs. The rolling twelve-month view of customer behavior is always illuminating.

There's all sorts of goodies in the table.

Customer counts fall away during 2025.

Annual orders per buyer have declined from about 1.17 per year to 1.14 per year ... in other words, customers are only buying once per year. More on that in a future post.

Items per order collapsed in November 2025.

Price per item purchased accelerated in November 2025. It is usually not a coincidence when items per order decrease and price per item purchased increases ... customers have a budget.

AOV decreased for years, but in the last three months of the year AOV increased at a healthy rate.

I mentioned yesterday the problem with new items. This table clearly illustrates the challenge, and the challenge is a two-year challenge that accelerated late in 2025.

The last two columns illustrate trends among items selling at/above their historical average price point (i.e. a $30 item selling for $30) and items selling below their historical average price point (i.e. a $30 item selling for $20). In the past year, items selling below their historical average price point declined faster than items selling at/above their historical average price point. Though demand collapsed, demand collapsed faster among items selling below their historical average price point. The merchandising team was trying to sell at full price. Good job!

Another important Elite Program table is the Comp Segment table. Here is the table.

There are many tidbits here that shape where the analysis is headed. I'll explain those tomorrow. Interestingly ... there IS a marketing challenge that the table above identifies. Can you see it?

So far ...

• A clear merchandising problem with new items.
• Customers only purchase one time per year.
• Customer counts are decreasing throughout all of 2025.
• Prices increased late in 2025.
• More full-priced selling in 2025.

Case Study: First Steps

When you work on a new consulting project, you don't ask silly questions like "Why is your company named 'Beans'?" You wonder, you ponder, but you don't ask.

Instead you do two things.

1. You listen.
2. You run client data through the Elite Program Code.

Remember, Beans ... The Internet's Only Variety Store ... was a $31 million dollar business that is now a $20 million dollar business. That's an unacceptable drop, and a drop of that nature is generally self-inflicted. Businesses can collapse on their own, they can collapse because they are mismanaged, and they can collapse for both reasons. Typically ... somebody mismanaged something or didn't understand something. 

Somebody at Beans mismanaged something or didn't understand something.

I like to run new data through my Elite Program framework. I want to see how a client compares to all other clients. Within a client, there are many points of view ... there are fables, there are stories employees tell themselves. There are also facts about actual customer behavior and actual merchandise categories.

Let's look at a simple comparison in the data. Depicted below are two graphs, one for annual demand from new items, one for annual demand from existing items. I elected to graph each metric with the same scale on the y-axis because doing so is illustrative of the challenges Beans faces.

What do you observe?

Existing item demand takes a hit in the last months of 2025, sure. Now look at the trajectory of new item annual demand. From fourth quarter 2024 through fourth quarter 2025, we have a catastrophe.

I'm literally 30 minutes into the project, and I already have a potential culprit - it's the Chief Merchandising Officer. In my mind, I prepare myself for the fact that future discussions are not going to go well. If this was a marketing mistake, both graphs would decline at the same rate. If this is a merchandising mistake (and it most certainly is), one graph doesn't look too bad while the other graph looks ... bad!

Yup, we're off to a good start.

I'll typically send a tidbit to the project sponsor and anybody the project sponsor wants me to include. I'll clearly communicate that my first view of the data suggests a merchandising challenge, not a marketing challenge. Then I'll duck, because somebody is likely to be angry with my assessment.

P.S.:  If you like the comparison above, consider becoming part of my Elite Program, with runs in June / October / February of every year. Cost is $1,800 for the first run, then $1,000 each thereafter. June is just around the corner, friends!

Case Study

Let's spend some time talking about a case study. I will analyze a business called "Beans". The data is real, the company and scenario is fictional.

The business is owned by Paisley Ingram. She calls Beans "The Internet's Only Variety Store". If you ask Paisley, she'll tell you ... "I sell whatever I want to sell. Always have. My customers love me."

Annual Demand/Sales for the past five years.

• Demand 4 Years Ago:  $31.0 million.
• Demand 3 Years Ago:  $28.4 million.
• Demand 2 Years Ago:  $27.4 million.
• Demand 1 Year Ago:  $25.6 million.
• Demand as of 1/1/2026:  $20.8 million.

Woo boy.

Let's dive in and see what a study of merchandise and categories can tell us about the problems at The World's Only Variety Store.

Your Mission

Years ago I worked with a CEO who had a Mission for his team.

He firmly believed in retaining customers, in loyalty programs. He believed that he could "force" a customer to become loyal. Seriously. He talked about it. Just get the right offer in front of the right customer at the right time. Throw some points at the customer. Let the customer redeem points when he told the customer it was the right time to redeem points. "It works for BJ's Restaurant and Brewhouse!" Good for him ... free pizookies all around.

The Mission? "We're going to thrive by creating a large number of highly loyal customers, and we have the tools to do this outside of the merchandise we sell."

I mostly disagree with the guy, but he had a clear Mission for his team. 

• (IDEAS) * (TALENT + LEADERSHP + STORYTELLING) = MISSIONS

His team moved in lock step with his Mission. The guy did his job as a Leader. His Team was talented. His Leadership was good. His ideas were poor. His storytelling was non-existent. This meant his Mission, while clearly articulated, had minimal value.

He needed new customers.

It is possible to have a good Mission but a bad outcome.

Stories Support Missions

I met with a client ... the analyst was struggling to articulate something important. I spent fifteen seconds tying thoughts together ... an Executive then said to the analyst "Why didn't you say that?"

The analyst looked mortified.

Because HE DID SAY THAT!!!

Of course, he didn't say it in a way that resonated with anybody.

Every three or four years, stories re-emerge. They re-emerge because technology moves us in a direction we don't fully understand, leading to a handful of individuals who articulate the future in a way that allows us to feel comfortable, feel knowledgeable, feel confident, and consequently take action.

In my hobby (headphones), people will ask questions about headphones or review headphones on Reddit (https://www.reddit.com/r/headphones/). You can sniff out bad storytelling in two seconds ... it is clear contributors using AI to write, and you know it the minute you see it. AI has a structure that is synthetic and inauthentic. It's obvious. Bad storytelling.

The same thing happens in business.

In catalog marketing, there are no storytellers ... and that is horrifying because the most famous sitcom of all time leveraged catalog storytelling as a core component of the series (Elaine working at the J. Peterman catalog). Seriously ... pick one employee from any ... ANY catalog brand who is a brilliant storyteller. I'll wait for your reply ...

You'd think the catalog vendor community would be able to communicate a compelling story that does not use terms like "digital fatigue", "Gen-Z", or "leading brands".

Human Teams = Talent + Leadership + Storytelling.

Our equation evolves.

• (IDEAS) * (TALENT + LEADERSHP + STORYTELLING) = MISSIONS

Strong Teams, Weak Teams

Last year, my Green Bay Packers were a very good team that was decimated by injuries to key players.

There are three overriding teams on a football team.

• Offense
• Defense
• Special Teams

In the playoff game in Chicago, the Bears scored 25 points in the fourth quarter to rally for a 31-27 win. They entered the fourth quarter trailing 21-6.

On offense, the Packers generated 421 yards and had zero turnovers. That should be enough to win a game.

On defense, the Packers yielded 445 yards, but generated two turnovers.

In terms of penalties, the Packers had 65 penalty yards vs. just five for Chicago.

Here's a fun stat. On special teams, the Packers kicker missed two field goals and an extra point. That's seven points given away in a four point loss.

In other words:

• The offense was good enough to win.
• The defense was good enough for three quarters then fell apart in the fourth quarter.
• Special teams gave up seven points in the kicking game.

One team ... three sub-teams with varying levels of success.

Does the same thing happen at your company?

I'll go out on a limb and say ... yes ... yes it does.

It's easy to pick on the merchandising team ... they source the products that customers buy. If they do a poor job, there's no amount of help that anybody else can provide to prevent a lousy outcome.

It's also easy to pick on the marketing team. It's a discipline that, historically, has been populated by an odd combination of absolutely dim-witted knuckleheads, brilliant business leaders who will run brands in the future, highly competent individuals who execute campaigns flawlessly, and analytics professionals who want to optimize things that nobody else wants to optimize. Try running a great team with that combination of talent!

I've spent a lot of time talking about category performance in the past month, for good reason. When the marketer or analytics professional understands how merchandise categories fit together (and interact with marketing channels), the professional can "be a bridge" between marketing and merchandising ... the professional can be a Leader, growing categories that yield high-value customers, capitalizing on the profit generated by specific categories.

Your business has a lot of teams. Those teams are unlikely to function perfectly. Be the person who helps teams function better.

Ideas * Human Teams = Missions

A quote from the Prof G newsletter:

• This is the moment where we should all start believing again, when ideas become missions ..."

Ideas do not become Missions without Human Teams.

That's where you enter the picture!

Ideas generally come from an individual. To implement the idea, you need one or more (sometimes many) Human Teams to get the work done, to build the bridge from ideas to a Mission.

Take a moment, and articulate in ONE SENTENCE what the MISSION is of your marketing team.

I know, it's hard to boil the essence of your marketing team down to one sentence.

This might be the MISSION of your MARKETING TEAM.

• "To connect as many people to your brand as many times as possible at the lowest possible cost, thereby generating increased profit."

The equation that represents your MISSION is as follows:

• (IDEAS) * (HUMAN TEAMS) = MISSIONS

The equation can be stated differently. Are your HUMAN TEAMS effective? Divide each side of the equation by IDEAS and you get the following:

• HUMAN TEAMS = (MISSIONS) / (IDEAS).

This is where it gets good! For instance, assume you have 1 mission and 10 ideas.

• HUMAN TEAMS = 1 / 10 = 0.10.

Now assume you have 1 mission and 100 ideas.

• HUMAN TEAMS = 1 / 100 = 0.01.

You have a framework for thinking about how effective your HUMAN TEAMS are. What if your marketing team has no missions and 200 ideas?

• HUMAN TEAMS = 0 / 200 = 0.00.

Your HUMAN TEAMS are effective when they convert ideas to missions at a high rate.

This is the thing we all observe ... all the time. There's nothing more irritating than sitting next to an "ideas person". The "ideas person" slows everything down ... they are ineffective in that nothing gets done at a reasonable pace but they control the discourse by constantly polluting your marketing ecosystem with ideas. "Big Ideas" are even worse.

Now think about Apple with the iPhone. That's an IDEA that is converted to a MISSION through HUMAN TEAMS. The device doesn't have to do everything ... that's too many ideas.

Bad ideas also result in problems, because bad ideas consume human teams, taking resources away from good MISSIONS. When #papertarians demand that you turn the clock back to 1955 and mail a catalog (because Gen-Z has digital fatigue or whatever), they are asking you to implement a bad idea that consumes the resources of human teams, taking away your ability to complete your MISSION.

(IDEAS) * (HUMAN TEAMS) = MISSIONS.

Teams

Sometimes content and ideas just coalesce into a meaningful narrative.

I'm reading Prof. G's Friday newsletter about traveling to the Moon and "ding" everything came together. He talked about the Artemis 2 mission. On the one end, we have the AI gurus and those backing 'em with investments ... suggesting AI will bring the end of work as we know it and the only thing we can do is trust those who are bringing the end of work to us to ... well ... to do who knows what.

That's one end.

There's the other end of the spectrum. That's the end you are on.

You are part of an ecosystem of Teams.

Your marketing team is part of that ecosystem.

Your merchandising team is part of that ecosystem.

Other teams support marketing or merchandising ... creative, IT, website ops.

Your teams are supported by vendor-based teams ... really important people. They manage social media or your search budget (as examples). They help execute your email marketing program.

Teams aren't only represented by people. Your categories represent "teams" of product working together to support your customer. Your marketing channels represent "teams" that support the products that support your customer.

All these Teams interact. With each other. With your customers.

As every new technology evolves and advances, it seeks to become a Team that interacts with your existing human-based Teams and marketing/merchandising Teams.

The metrics we have to measure Teams are woefully inadequate. We measure the ROAS of digital advertising without regard to the effectiveness of the Team of humans managing the process or the long-term payback of digital advertising. FACEBOOK ROAS IS 3.43 THIS WEEK, DOWN 8%. So what? What if ROAS is down 8% but the Team of humans managing the process prevented ROAS from being -16%? I'll take the the Team of humans all day long. But how are you measuring the Team of humans?

What about a lousy Leader managing a category that is growing by 15% industry-wide? Is the lousy Leader responsible for good performance? Is Amazon responsible for developing a great marketplace that causes 5% of the 15% increase?

I'm going to frame discussions in terms of Teams and Storytelling in the near term. It has become painfully clear that we don't have a framework for thinking about the importance of Teams ... and not just human Teams ... we have Teams of categories that work together, we have Teams of marketing channels that work together. We need to do a better job before AI does our jobs for us.

Weird Categories

Every one of you managed Weird Categories.

In the data I'm analyzing, a customer could buy from a category last year or not ... then buy other merchandise (or not). This creates three twelve-month buyer segments. I segment based on behavior 13-24 months ago, then measure rebuy rates in the past year.

Here's what a normal category looks like:

• Buy From Category 2 and Buy From Anything Else = 15.2% Category Rebuy Rate.
• Buy From Category 2 no Purchase From Anything Else = 8.1% Category Rebuy Rate.
• No Order From Category 2 and Buy From Anything Else = 2.4% Category Rebuy Rate.

Normal categories benefit from purchases in other categories, but benefit most from a purchase within the category. Duh!

Here's what a weird category looks like.

• Buy From Category 6 and Buy From Anything Else = 12.4% Category Rebuy Rate.
• Buy From Category 6 no Purchase From Anything Else = 16.2% Category Rebuy Rate.
• No Order From Category 6 and Buy From Anything Else = 0.8% Category Rebuy Rate.

Very weird. The customer is less likely to repurchase from the category if the customer buys something else in the past year from other categories ... and ... the customer has virtually no chance of buying from Category 6 if the customer only bought from other categories last year.

If you are responsible for Category 6, you don't send batch-and-blast emails to customers who haven't bought from Category 6 very often because those customers just don't want to buy from this Weird Category! There are seasons that likely cause customers to consider Category 6, that's when you try to cross the customer over into this category.

Heavy Lifting

Every category plays a role in your customer/brand ecosystem.

Category 17 - the highest sales category - is responsible for bringing new customers to this brand. This category truly does the heavy lifting for the brand.

Loyal customers are attracted to categories 4 / 6 / 7 / 13.

There's a natural ebb and flow to your business. Customers enter via certain categories, develop in another set of categories, then spend their loyal efforts across a handful of categories. Knowing this ebb and flow allows you to calibrate your marketing efforts. It's stuff you need to know, correct?

New Logo

There are things a marketer can do to improve business performance. A new logo is not one of them.

At worst case, you become Cracker Barrel. At best case, absolutely nothing happens. Either way, dollars are spent and time is wasted.

Thirty years ago I worked for a Sr. VP who suggested that business was 70% merchandise, 20% marketing and 10% creative. If marketing is 20% of the reason why a business is successful (it's more than that, by the way, not a lot more, but more), the tactics you choose to work on define whether sales are +10% or -10% ... in reality, they're the reason why your business is profitable or unprofitable. Yes, correct, it's that important. All of the little things you should be working on add up and make the difference between profit/loss.

In other words, you can't waste your energy on a logo.

P.S.: Yes, I realize I just offended 40% of you.

Conflicting Data

As you've been told, I write a Weather Newsletter. I also write a Pickleball Newsletter, but that's a topic for another day.

About three weeks ago an epic heatwave gripped the Western third of the country. I received two themes of feedback.

1. This is what happens when climate change is amplified. The future is worse than this.
2. This weather pattern is a normal weather pattern with an extreme outcome and has nothing to do with climate change.

Both sides are very passionate about their argument. They're quick to educate, they're in some ways overconfident ... they surely believe they are "right".

Forty years of data analysis suggest that humans struggle with conflicting data. We struggle with feedback loops. We struggle with interactions.

It happens in ecommerce. Remember our Category Impact table.

Category 17 is the biggest sales driver (sales are not shared in this table). It is also the biggest source of new customers. It also negatively impacts Category 6. This means when Category 17 does a good job, Category 17 hurts Category 6.

Assume you are the CEO of this brand. The merchant in charge of Category 17 looks great. She's responsible for a high-volume category that brings in new customers. And yet ... every time she does a good job, the poor merchant in charge of Category 6 looks bad. His sales decrease.

Should the CEO fire the guy running Category 6 if sales decline in Category 6? Or is the guy running Category 6 at the mercy of the woman running Category 17?

It's a nuanced situation, isn't it?

Just like weather / climate is a nuanced situation.

Obviously, you need the right data to even consider a reasonable response.

Almost none of you have the data to answer this question.

Selling Chickens

If you think you're performing ecommerce magic, you probably are, but you aren't doing what Sears did in the 1930s and 1940s when they (checks notes) sold live chickens via catalog.

Categorizing Categories

Based on the table below, we can categories our categories into three groups.

• Givers.
• Neutral.
• Takers.

You want Givers/Neutral categories. You want to de-emphasize Takers.

Here's the table.

There are ten obvious Giver categories.

• 2 / 3 / 6 / 7 / 8 / 9 / 12 / 13 / 14 / 17.

There are a handful of Neutral categories.

• 0 / 4 / 10 / 14.

There are a few Taker categories.

• 1 / 5 / 11 / 16 with 11 being an egregious Taker!

The email marketer tells stories about anything not in the Taker category.

The social marketer can do "something" with Taker categories, but not much. If you have to promote Taker categories, do so with channels that have essentially no variable cost ... like oraganic social.

The search marketer adjusts spend based on Giver / Neutral / Taker ... spending more on Giver categories, spending less on Taker categories.

The catalog marketer? You won't do this, but you cannot put Neutral / Taker categories in your catalog. Maybe just the winning items in those categories, that's enough. Those pages are TOO DARN EXPENSIVE to cause harm to your existing customer base. If you disagree (and you will disagree), talk to the paper / printing / postage / boutique agency folks and demand they align the expense structure of the discipline back to 2006 levels.

Alright, I'm off the soapbox.

Next week, we'll put all of this category stuff into perspective.

A Taker

We've all met takers in our personal lives. It's a horrifying experience. A narcissistic politician, an angry mother-in-law, a friend who always wants everything his way. All of it exhausting.

It isn't much different in ecommerce.

You undoubtedly have a merchandise category that is a TAKER. It takes away from other categories. It doesn't develop other categories, instead it borrows customers who then spend less in other categories and more in the TAKER category.

Here's our table. Take a look at category xx.

Read across the category labeled M11.

What a train wreck.

The category only adds value to categories 8/11/12.

The category TAKES value away from a whopping ten (10) categories next year.

This is a category that you shouldn't advertise. You can offer the category if it is profitable, sure (though that is questionable given this table), but your ROAS-obsessed analytics folks are making rampant mistakes giving this category equal treatment in any marketing channel. Catalog marketers should not feature this category anywhere ... bury it in the back of the catalog! Only feature winners here. Email marketers needs to not feature these items ... make it easy for the customer to "get" to the items online but most certainly don't feature this stuff ... those items are TAKERS harming your business long-term.

If you are going to advertise TAKER categories, do so on Organic Social. It costs you nothing. Do not waste precious marketing dollars on categories that don't play well with other categories.

A Giver

What you really want is to offer merchandise that causes customers to want to buy EVERYTHING you sell. That's how you know you're doing a good job.

Remember our table from yesterday? This brand has seventeen (17) merchandise categories. Reading across the rows, we see how much money a customer will spend next year in each category (columns) based on $1 spent in the category (row) previously. I weight historical dollars (100% past year, 60% 1-2 years ago, 35% 2-3 years ago, 20% 3-4 years ago) to add a "recency" component to historical purchases.

Here's the table.

Read across the row labeled "M09". This is Merchandise Category 9. This category is a GIVER. When a customer buys from this category, the customer spends more money next year EVERYWHERE!.

• $0.05 in Category 1.
• $0.21 in Category 2.
• $0.37 in Category 3.
• $0.23 in Category 4.
• $0.20 in Category 5.
• $0.22 in Category 6.
• $0.24 in Category 7.
• $0.11 in Category 8.
• $0.20 in Category 9.
• $0.29 in Category 10.
• $0.48 in Category 11.
• $0.33 in Category 12.
• $0.18 in Category 13.
• $0.33 in Category 14.
• $0.10 in Category 15.
• $0.26 in Category 16.
• $0.22 in Category 17.

This category is a GIVER. It delivers added value to every category. It either causes customers to "need" what is offered in other categories (i.e. an iPhone buyer purchasing an Apple Watch) or adds a halo to the brand experience.

This is the category that gets extra attention on your home page, in your email marketing campaigns, in social. You pay extra in Google Ads for items in this category. Terms like ROAS have no real meaning, because ROAS is what average marketers use to judge success ... you have a category that adds value to every category in the future ... you're willing to pay more to have more success.

And for the catalog marketers in the audience? Your catalog pages are too expensive now, you can't afford to feature stuff like you used to. Feature the categories that cause customers to buy everything in the future. Use your catalog dollars in a smart manner, ok? (and yes, I realize that won't happen but it should happen).

Givers and Takers

It's unlikely you look at your business this way.

It's time for you to look at your business this way.

You have categories that "give" ... when a customer buys from the category the customer immediately becomes more valuable to most/all categories.

You have categories that "take" ... when a customer buys from the category the customer aligns with the category and spends less elsewhere because of the purchase within the category. It would be like buying a Quarter Pounder with Cheese at McDonalds ... only for the customer to switch to a Filet o' Fish and not go back to the Quarter Pounder with Cheese. If your job is to sell Quarter Pounders with Cheese, you become protective of "your" customer.

This is the table we'll start noodling tomorrow.

National Griddle Week

Watching soccer and a halftime commercial comes on ... it's Blackstone ... and they're promoting NATIONAL GRIDDLE WEEK. Whaaa?

I visit their website ... sure enough.

AI knows all about it.

It's apparently an event they made up out of thin air.

I gave a presentation back in 2016, talking about how "brands" (as the pundits say) would ultimately have events that they can promote everywhere ... that "brands" would become similar to sporting leagues in that a sporting league might have the Final Four or the FA Cup or Opening Day (baseball) or the NFL Draft ... events that build excitement and lead to free advertising (even if paid advertising is used to create free advertising ... remember, Glenn Glieber once said "I love free advertising").

I gave variants of that talk at conferences from 2016 - 2019. Attendees HATED IT! The idea of having to use your brain to create events that might not work was not embraced. The idea of doing virtually no work and paying Facebook for names ... that idea, dear readers, was embraced.

It's 2026 (I realize you already know that). My inbox is filled with feedback and commentary about doing the absolute easiest tasks that involve a bare minimum of work ... paired with comments like "show me a best practice that you see working across your client base". That sentence is the essence of empty, vapid nonsense.

We all have to take risks, creating reasons for customers to do something. If you're not willing to make up your own "National Griddle Week", you're not willing to go to bat for your "brand".

What is your version of "National Griddle Week"?

Difference: Old vs. New

On Friday, severe storms were developing in the Midwest. A storm chaser was broadcasting live to his followers ... he was at one of those speedy oil change places. When it was time to pay the $49 or whatever, the employee told the storm chaser that the oil change was free. One of the viewers recognized the establishment, called the Store Manager, and paid the bill.

That is one way that the modern economy works for those exploring new business models.

Then you have old school brands working with YouTube, as shown below.

First of all, there's the brain dead marketing approach used by Michaels. Does anybody at Michaels think that my stream of Podcasts, Headphone information, Weather, and Pickleball videos aligns with their brand?

But secondly, YouTube knows everything about me. They know what I watch. They know what I subscribe to. On what planet does their algorithm (#AI) believe that THIS is the ad I need to see?

Either Michaels is dumb, YouTube is dumb, or both of 'em are dumb.

We've had the wombats telling us for nearly three decades that they can serve the right ad at the right time to the right person.

They cannot do that.

When you step back and watch what modern marketers are doing vs. old school marketers, you see a gulf that is difficult to bridge.

It Won't Impact Me

It depends.

One professional emailed me to suggest his company is using AI to generate 9% increases in reactivation rates. Another professional told me he's using RFM ... a 35-50 year old technology, to decide which customers are worthy of being reactivated.

Which professional is looking to the future?

Neither.

Or both are.

We don't know. We don't know how either individual thinks about the future.

Am I future-proofing myself by creating cartoon images via AI? Noooooooo.

You might think carefully about what happens if the return on investment on AI does not materialize fast enough? Remember 1996 - 2001? The adoption of the internet and monetization of the internet did not keep up with the Goobers who overspent. I worked for a company that went from $78 a share to $1 a share within six months. You might want to think about what it means for your company and your job if the market "corrects" because AI doesn't monetize itself fast enough.

There is going to be a generation of Leaders who navigate companies through the current political environment and the adoption of AI, avoiding bubbles and controversies. Pay attention to these people, because they're the ones who own the future.

A Glimpse Ahead

I've told you about Ryan Hall Y'all and his severe weather shows on YouTube. We're in a weather pattern that will likely lead to some severe weather for a few days, so his show becomes very popular.

When he's not broadcasting (which is the vast majority of the time), his team programmed an AI-bot to run a show that describes the weather ... called the Yall Bot (click here).

Driven by artificial intelligence, the bot communicates anything currently happening and previews weather trends likely to influence the next few days ... an automated Weather Channel if you will. In the screen shot above, with absolutely nothing happening, 1,400 people were watching, and "engaged" users were chatting ... chatting about weather being broadcast by a bot.

This is the point in the discussion where somebody tells me "Hey, Goober, what does this have to do with ecommerce and my job?" Good question!

It's trendy right now to talk about how AI will eliminate jobs like copywriting. "What will Sharon do when AI takes her job?" Yes, AI is coming for Sharon's job. Which means, of course, that Sharon has to adapt.

If a bot can be programmed to broadcast the weather 24/7 (and your awful phone weather app replaces the role of the meteorologist telling you the weather on the news), you have to change as the times change.

It's easy to see the future of ecommerce when watching the Yall Bot. Take all the modern aspects of influencer retailing on TikTok and fuse it with old-school aspects of the Home Shopping Network and you have your future job ... a computer-centric Video Director providing 24/7 programming that is a fusion of automation, creativity, and authentic human selling, all projected into AI marketplaces by the bots/agencies that replace much/most of your marketing team.

We know it's coming. We know we aren't going to stop it. We know we have to adapt. Best to start adapting today.