Case Study: Dispelling Legends

At "Beans: The Internet's Only Variety Store" there is a legend ... that a broad assortment "holds the brand together".

It's been my opinion that Leadership is violating this "legend", assuming the legend is true.

So ... I performed a classic Factor Analysis to demonstrate categories that customers like to purchase from. If dots on the image below are close together, customers like to purchase from the categories "near each other" on the image. If categories are far apart, it means different customers prefer the categories.

Here's the image from the Factor Analysis.

There appear to be three reasons why customers buy from this brand.

1. Apparel Tops:  We know this is a high-volume category, and it is all by itself meaning that many customers ONLY purchase Apparel Tops.
2. Home / Outside:  There are clearly customers who view this brand as a Home / Outside brand. There's some bad news here ... some customers clearly come for Home / Outside, but a few weeks ago I showed you that Home decreased from $6.0 million to $2.9 million over four years. No bueno.
3. Everything Else:  There are customers who view this brand as an eclectic mix of categories (the right/middle side of the image).

Of interest ... Apparel Bottoms does not align with Apparel Tops ... it aligns with "everything else".

I have to analyze new customers by these three groupings ... if the future value of a customer who aligns with "Everything Else" is higher than other categories, we have a lot of freedom as marketers to be clever. If "Apparel Tops" drives new customers, we have to concede that those customers might not appreciate the "entire assortment". Messaging to Leadership doesn't always go well on that topic.

P.S.:  If you like what you are seeing here and are interested in a Category/Customer centric analysis, send me an email (kevinh@minethatdata.com).