Two Articles For You To Think About

First, translate everything in this article about AI and Media to "AI and E-Commerce". Then you'll be interested in the topic.

Second, you should see the blank stares I get when I ask you "who" the person is that represents your brand publicly, the person and/or employee that your customers implicitly trust, leading to increased sales/profit? This article neatly summarizes why I ask the question. If you cannot answer this question, you are five to ten years behind brands who have answered it.

Merry Christmas!

Enjoy readers! Take full advantage of this multi-week period of celebration.

Top 5 Christmas Movies

Here we go. This list is non-negotiable.

Number 5 = A Charlie Brown Christmas

• According to the IMDB Link offered by Google, it is listed as a TV Movie, and therefore, it qualifies for this list. I know, I know, many of you think The Year Without A Santa Clause is the more worthy feature, where Heat Miser turns in a Tony-Award winning performance. Poor old Charlie Brown kick-started the animated tradition that all others emulated. It has an appropriate mix of Capitalism, Christianity, and Social Commentary. And it has Vince Guaraldi piano music.

Number 4 = A Christmas Story

• I'll concede that the "classic-ness" of this feature has been diminished thanks to endless runs of the movie on Turner-hosted cable television stations. Regardless, you'll shoot your eye out enjoying the premise. Also - we have a neighbor who proudly displays his leg lamp in the window.

Number 3 = Less Than Zero

• You are probably wondering why I didn't rate this classic 80s Christmas hit a bit higher? It's a tossup at this point between 1/2/3. We get to spend a few hours watching Clay (Andrew McCarthy) fly home for Christmas (from college out east) to try to save his friend Julian (Robert Downey Jr). James Spader turns in an under-appreciated performance as Rip, the drug-dealing power broker. Michael Bowen's "Hop" is a good "bad guy" as well. Spoiler alert ... not all Christmas movies have happy endings.

Number 2 = Christmas Vacation

• There's no amount of punishment that Clark W. Griswold can't endure! Anybody who ever decorated their yard knows what it is like when a strand isn't working. By the way, Julia Louis-Dreyfus parlayed a stunning performance as neighbor "Margo Chester" into a memorable role on Seinfeld. As Cousin Eddie proudly said, "Save the neck for me, Clark".

Number 1 = Scrooged

• Bill Murray is better remembered for Groundhog Day, but this adaptation of A Christmas Carol from 1988 touches all of the bases. It's the undisputed leader of Christmas features. Turns out it is fun to watch Bill Murray get hit in the face with a toaster.

Honorable Mention

• Rudolph the Red Nosed Reindeer. Any story about a youth being kicked out of a community for being different, landing on an island of misfit toys, then re-imagined as the savior of Christmas for having an unusual physical affliction that can be exploited for the benefit of capitalism deserves (at minimum) honorable mention.
• You've Got Mail. A classic treatise about retail failure at the birth of the internet. Based on an old Christmas movie called "The Shop Around The Corner" starring Jimmy Stewart and Margaret Sullivan, it's a must-see for the omnichannel marketing-loving professional.
• There's another classic animated feature where the central character had his heart grow three sizes ... that one isn't bad either.

Accountability

Part of the system I advocate is a process that leads to Merchant Accountability.

This can happen in many different ways.

At Nordstrom, Blake Nordstrom published monthly sales comps, year-over-year. Email. At Executive/Leadership meetings. If you were in charge of Accessories, your name and department (Accessories) was on a dashboard for tens of thousands to see ... they saw that you were +9% vs. last year. The Men's Tailored executive might have been at -4%. That simple act ... a dashboard with every Merchant Executive pitted against each other, rank-ordered from best performance to worst performance ... that led to a whole lotta Accountability.  When merchants were let go or "retired" ... it wasn't hard to see why. Their name was at the bottom of the dashboard.

When I worked at Lands' End, there was an elaborate post-mortem process performed on all monthly core catalogs (you've heard me talk about this previously). Every spread in the catalog was posted on the wall. The tagboard color told everybody how profitable the spread was ... Gold = 30%+ Variable Profit, Green = 20% - 29%, Blue = 10% - 19%, Red = Below 10%. It was really, really easy to see the spreads that worked, and the spreads that didn't work. It was in those post mortem meetings that I learned about the importance of new merchandise. It was in those post mortem meetings that I learned about the importance of "selling creative" vs. the fecklessness of "branding creative".

But make no mistake ... when our Circulation Director would start criticizing the merchants and creative folks for butchering the first twenty pages of the catalog (which we learned were critically important), the merchants and creative folks did not take kindly to the feedback ... and for good reason ... they were being held Accountable for their decisions. Those folks would punch back ... "you are idiots, you mailed the wrong customers", to which our Circulation Director would retort "we mail the same 4,000,000 best customers every month, now let's get back to the decisions you made." 

Those were spirited meetings.

In most of my projects, I run Comp Segment analytics and Comp New/Reactivated Buyer analytics. Remember - for the Comp Segment framework, we select all customers who bought twice in a twelve month period, and then calculate average spend in the next month ($100, $0, $0, $0, $0 = $20 average). The data is run for the past thirty-six months, giving me twenty-four months of Comp Segment results to analyze. Similarly, I count the number of new/reactivated customers on a monthly basis.

As mentioned previously:

• Comp Segment results reflect strongly on merchant talent/results, especially when measured at a category level.
• Comp New/Reactivated results reflect strongly on marketing talent/results/spend.

In my system, it's pretty easy to see who needs to be held Accountable. Here's a case where the merchants are Accountable for poor performance.

• Comp Segment Results = -9%.
• Comp New/Reactivated Customer Counts = -6%.
• Merchant-Adjusted Comp New/Reactivated Counts = -6% - -9% = +3%.

In this example, the merchandising team is struggling, while marketing is performing reasonably well. In my system, I'd drill down into the -9% comp at a category level, then I'd run some "Class Of" reports, and within a few minutes I'd know what is going on.

Here is an example where marketing needs to be held Accountable. This example is happening all over the catalog marketing world right now as the catalog co-ops die a painful death.

• Comp Segment Results = +4%.
• Comp New/Reactivated Customer Counts = -24%.
• Merchant-Adjusted Comp New/Reactivated Counts = -24% - 4% = -28%.

The Merchant-Adjusted Comp New/Reactivated outcome of -28% is a catastrophe, and it's happening everywhere in catalog marketing. Too many catalog brands aligned with their "trusted partners" (agencies, paper reps, printers, USPS, catalog co-ops, list exchanges) ... and once the customer aged into his/her 70s everything collapsed. Without a strong digital marketing presence, the bottom is falling out. Catalogers are dying due to structural issues, and it is the marketing team that is to blame ... the marketing folks have had 25 years to figure out how to become strong digital marketers and instead adhered to the omnichannel thesis. Ooops.

Regardless, in my system it's important to determine who is Accountable for business challenges. In e-commerce it's frequently the merchandising team. In catalogs, it's the marketing team. In retail, it's a structural challenge (stores are dying).

Does that make sense to you?

Spending $4,000 to Grow a Community

Here's an example from my hobby (headphones ... click here).

• Time-Limited.
• Showing Number of Entries to Demonstrate Authority.
• YouTube / Instagram / Discord Integration.
• 20 Entries per $100 Spent (they're rewarding buying something a minimum of 20x as much as list generation activities).
• 3 Entries per Referral (they're rewarding spreading the word 3x as much as normal list generation activities).

They're giving away three iems for a total of about $4,000.

They're adding about 10,000 entries per day.

There are so many ways to build out your "prospect list", to use an old-school term, to avoid collapsing print response as well as troubles via Google/Facebook.

So many ways.

If Discounts Aren't Part Of The System, What Replaces It?

You might remember this presentation from May 2024 (click here).

Last week I visited their community forum, and on the website I looked at an item I saw mentioned in the community forum. Yes, I was logged in. So yes, they sent me an SMS message two hours later following up on product I looked at. You don't have to look at the item, either. They send SMS messages based on your community comments and interests, triggered by a visit to the community.

• They have a half-million registered community users. How many do you have?
• When a member of their community reads a post, they record the activity and act upon the activity. Do you do that?
• They are able to generate eight figure annual sales in a world where Amazon can deliver the same item at the same price immediately. That's an important test ... if a customer chooses you and your slower-than-Amazon delivery over Amazon at the same price for the same item, your "system" is working.

Now, I get it. You don't believe in communities, though many of you have thousands of people watching your videos (so you do have a community, you just don't call it one).

There are two additional things that are an important part of my "system".

• When a customer is inactive or lapses, record every possible interaction you have with that customer, because often the customer isn't inactive ... the customer is just not purchasing. You want a customer who has not purchased in 18 months if the customer is still interacting with your brand monthly.
• When an inactive customer decides to interact with you, ACT UPON IT!! This is where merchandise personalization is so darn important. Merchandise personalization adds 20% to 50% to your response/conversion metrics. You can double/triple response/conversion by acting upon an 18 month buyer who decides to interact with your community and you then personalize the merchandising experience for the customer.

Mass Discounts Have No Place in My System

Can I tell you a story about a brand many of you are familiar with?

• October = 40% Off.
• November = 50% Off.
• Black Friday = 60% Off.
• Saturday After Black Friday = 60% Off ... Hurry, Ends Tomorrow.
• Sunday After Black Friday = 60% Off ... Hurry, Ends at Midnight.
• Cyber Monday = 60% Off Plus Free Shipping, Hurry, Ends at Midnight.
• Tuesday After Cyber Monday = Cyber Monday Extended!! 60% Off Plus Free Shipping.
• Wednesday After Cyber Monday = Cyber Monday Extended!! 60% Off Plus Free Shipping.
• Thursday After Cyber Monday = Cyber Week Continues!! 60% Off + Free Shipping $50+.

When I clicked through the Thursday email campaign to test their tactics, one hour later they sent me an email with 60% Off + Free Shipping No Hurdle ... I get a "perk" because I clicked through their email campaign.

Yeah, if you ordered Sunday because 60% off was about to end, you'd be upset to know that had you waited until Monday you'd have also received free shipping. Nice. 

I realize you're going to have to discount from time to time.

It should not be your reason for existing.

And you should never, ever ... ever ... mislead or lie to your customers. The above-mentioned cadence misleads customers. Explain to me, those of you who love discounts, why it is acceptable to mislead your customers? I await your response (kevinh@minethatdata.com).