A Strange Year For Catalogers

Lots of information in the past few months.

• For many, terrible business results, especially in customer acquisition.
• For some, very good business results - so you can't blame "the election" or "economic headwinds" for any downturn in business. At all. Don't even try. Why would other companies experience so much success if external factors were to blame?
• A significant number of leaders preparing to sell catalog brands. Got a LinkedIn request last week signaling yet another case where this is going to happen.
• Catalog brands being shuttered.
• Retail brands shuttering catalogs.
• Online brands firing-up catalogs. Remember, just because Wayfair has a catalog doesn't mean catalogs are rallying ... it is far more likely that Wayfair (and other online brands) are running out of new customers or ways to monetize existing buyers. Talk to folks at online brands, they'll tell you what's up.
• Catalog brands being reorganized (some of you have been peppering me with thoughts about Orchard Brands as an example).
• Across-the-board downturn in co-op performance ... something that is routinely talked about privately but almost nobody will say anything about publicly.
• Employee fear. This is pretty common, and I understand the fear.

Here's the interesting thing, folks. Catalogers don't really compete with each other anymore. That ended back in 2005ish when all catalogers participated in all co-ops, openly sharing all names with each other. You cannot compete with each other when your success depends upon the success of somebody else. Vermont Country Store needs Blair, Blair needs Oriental Trading Company, Oriental Trading Company needs In The Company of Dogs. Nobody will talk about this fact, but the fact is 100% true.

For the rest of this week, I am going to discuss a new thesis ... the shared Catalog Brand Ecosystem you all participate in. You are not competing with each other. If anything, you are a loose federation of brands that compete against the Online Brand Ecosystem and the Mobile Ecosystem. And here's the good part ... you've already won the battle. The Online Brand Ecosystem doesn't want your customer base (#tooold). The Mobile Ecosystem doesn't want your customer base (#grandparents). You own your customer base (customers > age 55). It's all yours!!! What a huge advantage you have.

So if you own your customer base, then your success / failure is fully dependent upon you ... you and the other brands in the Catalog Brand Ecosystem. As a result, co-op performance has nothing to do with co-ops anymore ... it has everything to do with you. If co-ops don't work well anymore, it's because of a core issue with the Catalog Brand Ecosystem you participate in - your business dynamics are driving down co-op performance.

The problems can be fixed. You can do this!!

We'll address this topic tomorrow.

And The Results Of The Test Are ...

Like a bald eagle, one can see the results from a mile away!

I performed an experiment on Friday ... the blog post, titled "Ralph Lauren - And Five Tips For Success" is, according to my email service provider, the most clicked-through and most "engaging" article of the month ... and it has only been active for a couple of days whereas other articles have had more than two weeks to percolate.

The plus-side of the experiment is that an audience can be motivated to act.

The minus-side of the experiment is that an audience can be easily motivated to act on the least important and unactionable content imaginable.

If this happens to you - a smart audience - imagine what happens on a daily basis ... even in your business?

In other words, when you seek to optimize / maximize, say, email productivity, are you doing what is best for your business, or are you following the lowest-common-denominator (#discounts #promotions #engagement) so that your metrics look good?

Ralph Lauren - And 5 Tips For Success

A great example of Merchandise Forensics in the real world at Ralph Lauren ... click here.

I'm doing a test today ... I never succumb to the noxious pap known as "subject lines". But I'll do this test today, because I want to see how you, the studio audience, respond ... do you increase opens and clicks? Because if you do, well, that's something to think about, don't you think?

Ok, here are the FIVE TIPS FOR SUCCESS, stuff that works across my client base.

• Have a Marketing Point of View.
• Proper Demographic Alignment.
• Increase Merchandise Productivity.
• Have a Robust and Diverse Customer Acquisition Program.
• Thoroughly Understand Your Brand Ecosystem.

The Catalog Brand Ecosystem

When you buy from Absolute Socks, your transactions don't go into the catalog co-op database ... but when you buy from In The Company Of Dogs, your transactions likely make it into the database.

So in this way, the catalog Brand Ecosystem at a co-op scale is largely functioning properly. You don't care that Absolute Socks transactions don't appear, because the customer buying from Absolute Socks isn't the customer buying from Blair. You don't want 100,000,000 households with detergent purchases ... you want 8,000,000 households modeled properly.

So when we hear from catalogers (constantly) that co-op performance is dying, we're left with a handful of conclusions.

1. The 8,000,000 best catalog names are constant, but are performing worse over time.
2. The 8,000,000 best catalog names are slowing churning into 6,000,000 catalog names, and the co-ops fill the remainder with unproductive buyers from online categories or grocery stores or wherever/whatever. Best have been reduced because the catalog ecosystem is dying.

Nobody in this industry wants to admit that (2) is a possibility. Careers are on the line. I get it. It isn't fun to talk about, so instead we fantasize about how some new allegiance model will deliver breakthrough results.

One CEO told me that a large co-op told him that only 45% of the names he gets have ever purchased from his category ... and hint, everybody has to have what this person sells. This cannot happen unless the co-op is incompetent (they aren't) or the universe is dwindling rapidly.

Catalog names are like salmon to orca whales ... if there aren't enough salmon, orca whales up here in the Pacific Northwest struggle to survive.

Your co-ops have all of your data. They could describe the catalog ecosystem to you in an hour. Heck, they could all band together, host their own conference, allow you to attend for free with all the money you've paid them, and they could give you a thorough description of the overall Catalog Brand Ecosystem. They could tell you that what used to be 14,000,000 great names was 8,000,000 three years ago and is now just 6,000,000. They could fully describe what is happening, in easy-to-understand terms. They could describe what is happening to the Catalog Brand Ecosystem. Then, they could get busy helping you move into the future.

Contact your favorite co-op immediately. Ask them to perform a Catalog Brand Ecosystem analysis for you. Ask them to explain just what the heck is causing such lousy performance. These are good people, they should respond to your request, right?

Marketing Tactics Feed The Brand Ecosystem

Take a look at this little beauty from the Direct Marketing Association.

You pay the DMA $30,000 a year ... $300,000 over a ten year span. They take your money, and they create ads with potentially inappropriate word play.

Maybe you think it is funny.

Maybe you don't think it is funny.

Either way, this form of advertising feeds their ecosystem with the kind of individuals who like this form of advertising.

I have a client that is exhausted with constantly having to find new and better promotions. When I asked the client how they acquired new customers, they mentioned that %-off and free shipping promotions "work best".

Well, what kind of customer do you think this brand acquires?

What kind of customer do you think the DMA acquires, using your money?

Your marketing team makes decisions today that impact what your brand ecosystem looks like tomorrow. Make sure your marketing team is making decisions that align with an ecosystem you'd be proud of.

60 Data Scientists?

A VC I've previously worked with mentioned on Twitter that StitchFix has sixty (60) data scientists on staff ... he stated that StitchFix is going to do to retail what Moneyball did to Major League Baseball.

Now, I've managed Data Scientists ... back when they were just Statisticians with Masters or PhDs to their credit. And like anything else, I can tell you that just because you have sixty numbers oriented people doesn't mean you have a 60x increase in insights into why your business does / does not work.

But it is also possible that 60 data scientists give you a 120x increase in insights.

If you want to understand how your Brand Ecosystem works, you have to invest in people. No, not invest in your favorite vendor, because your favorite vendor cares more about how their ecosystem works than how your ecosystem works ... and they should care more, because they cannot survive without understanding how their ecosystem works (do you think that vendors measure their own ecosystem based on client repurchase rates and spend and product affinities and the like ... a good question, don't you think?)

You cannot learn how your Brand Ecosystem works if all you ever do is figure out how to "target" a customer. You have to actually map the system, from newbie to loyalist. You have to know how much of your email sales are incremental, and how much is cannibalized from other channels. You have to understand the role of every single merchandise category. You have to understand the role of new merchandise, existing merchandise, winning items, contending items, low price points, average price points, high price points.

You have to do some work.

Show of hands ... how many of you have a thorough understanding of your brand ecosystem?

Hiring 60 data scientists for a $200,000,000ish business is one way to get a head start.

Fertilizing The Field

In any ecosystem, you need food. Food makes the whole thing go. Remove one step in the food chain, and the top end falls apart.

Your business is no different - new customers are like food to the profit and loss statement. Without new customers, who are you going to spend all of your beloved energy targeting? How can you have a loyalty program if you don't have enough customers being acquired to eventually graduate to the loyalty program?

See the green sticker on the car window? That's for evo (click here). It's right next to the Apple logo.

When is the last time you saw a Macy's sticker on a car?

The stickers represent the marketer, busy fertilizing the field ... for big (Apple) and small (evo).

It's not hard to create a takeaway like this. Tell me what stops you from doing it? It's not cost, is it? What stops you from paying attention to small details?