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.