from Kevin Hilstrom minethedata.com
Hello there, my catalog friends!
These are interesting times, aren't
they?
We are truly caught between two
eras. The past 100 years were very good to catalog brands. And in five or ten
years, there will be a road map for the catalog brand looking to enter the
future.
Between the past and the future,
that's where we are stuck. We're stuck in a period where, as one business
leader recently told me, "nothing works".
We know that's not true. Plenty of
things work. But nothing works at a scale necessary to cause optimism.
So let's discuss six important
catalog trends that help the catalog brand bridge the past and the future.
Trend #1 = Micro-Targeting: This has been talked about for decades, but we're getting
closer to seeing it happen. There simply isn't a need to send a 96 page catalog
that has a lot of the merchandise you love to sell when there is this thing out
there called the "internet" that also has a lot of the merchandise
you love to sell. We're likely to see a 96 page catalog become three or four
different 56 page catalogs, with the customer receiving just one of the 56 page
offerings. People are using this strategy to
generate 95% of the demand on about 60% of the pages --- mathematically, folks,
it works! And instead of sending remails, you can send a different
56 page version to a customer a few weeks later. I cannot predict where
micro-targeting is going to take us. I can predict that catalogs will get
smaller and smaller and smaller, since the website is the store and we don't
need to advertise everything anymore. E-mail will continue to progress down the
micro-targeting path, with more an more versions that are sent on a triggered
basis. Long-term, we'll see the slow death of the "campaign" ...
sure, campaigns will be here twenty years from now, but we're headed down a
path that cannot be reversed anymore.
Thegies:
For the first time Merchants can digitally merchandise product offers and
promotions to consumers by category and subcategory communities of interest
when they work with the ShoppeSimple Loyalty and Customer Acquisition Tools.
Trend #2 = Filtering: We will see a dramatic change in how a catalog brand views
customers. In many of my Multichannel Forensics projects, customers fall into four
buckets.
- Catalog shoppers who order via the telephone.
- Catalog shoppers who order via the internet.
- Online shoppers who order because of online marketing.
- Brand buyers who like the merchandise.
It will take every ounce of energy
possible to not mail catalogs to online shoppers and brand buyers. But this
will be essential for the catalog brand to survive the transition that is
coming/happening. Honestly, if I had to communicate one thing for a
cataloger to do right now, it would be to start filtering, immediately.
I've been able to generate a half-million to a
million dollars of profit achieved for businesses between $30,000,000 and
$100,000,000 in size just by doing a reasonable job of filtering. Quite honestly, filtering may be the difference between
profit and loss for many catalogers. And psychologically, it isn't easy for a
cataloger to transition the mindset from a customer buying because a catalog
was sent to her and a customer buying because she loves the product. This
transition has to happen, and filtering is a great place to start ---
especially from a profit and loss standpoint.
Thegies:
Imagine if you can take the above point from Kevin and deliver product
messaging (whether it is new arrivals or promotional products) several times a
day, 365 days a year without opt-out. At ShoppeSimple YOU Can!. Our client has seen
substantial increases in site traffic, a 5X increase in conversion over email
and an increase in Average Order Value. To estimate a mature TransactionalRSS (TRSS)
program from ShoppeSimple an email program is estimated to be 10% of online
revenue. A mature TRSS program is estimated to a 1/3 of email revenue. And if
you take 25% of this number and only pay a Pay Per Transaction fee to get the
sale, we haven’t had anyone say pass. Check out shoppesimple.com for more
information.
Trend
#3 = Dynamic Landing Pages:
Folks are doing this as well (just hit refresh when you visit Amazon.com).
Merchants will submit the items they want to feature, while the rules-based
system that feeds e-mail campaigns to customers will fill in the holes with
customer preferences. Catalogers will not pursue the algorithmic approaches of
their online brethren, and that could be acceptable as long as there is a warm
story being told to the customer. Again, this isn't a new idea, but it is one
that catalogers will embrace, because catalogers will understand that the
merchandising of landing pages is very similar to the merchandising of spreads.
In fact, any online strategy that can be made to look, from a process
standpoint like, old-time cataloging will be embraced by catalogers.
Thegies: Through the ShoppeSimple Loyalty and Customer
Acquisition Tools we build dynamic landing pages for every TransactionalRSS
Feed we publish.
Trend #4 = Co-Op Evolution: We're going to see between one and
three companies emerge (could be existing catalog co-ops, could be online
co-ops, could be the big data providers, could be one of the web analytics
companies), companies that focus on evaluating real-time customer behavior.
This is a very different strategy than what we see today. Today's catalog
co-ops are very good at massaging past purchase history across brands.
Tomorrow's co-op leaders will combine web analytics data with offline data and
web surfing behavior. You won't pay $0.06 for one-time access to a name.
Instead, you'll pay $0.03, and you'll get to pick the contact you wish to
employ --- catalog, e-mail, personalized online landing page, etc., or you'll
pay $0.15 to employ a multiple micro-channel campaign (catalog + e-mail +
online display ads + search optimization + ads on social media platforms). Of
course, catalogers will pay about anything for the multiple micro-channel
campaign. This will be transformative, especially among catalog brands
targeting lapsed buyers.
Trend #5 = Frenemies And Pods: As catalog productivity continues
to decline (not yours, but industry-wide), you'll see new and unusual
partnerships. Expect to see contact center and distribution center
consolidation --- a company in one industry (automotive parts) and a company in
another industry (gifts) will share contact center and distribution center
resources, human resources, information technology departments, database
marketing teams, circulation teams, all in an effort to conserve
back-of-the-office expenses. Customer lists and resources will be freely shared
across what I call "pods", a half-dozen or dozen frenemies who
leverage what each other are good at. Catalogers already share all of their
customer data with each other, and private equity firms already consolidate lists
and back-of-the-office operations. It's only a matter of time before frenemies
form pods.
Thegies: In ShoppeSimple Feeds there are opportunities for merchants
to place your ads on the iGoogle/My Yahoo Home pages, on Facebook, Twitter and
on Smartphones.
Trend #6 = Organizational
Transformation: A
generation of catalog marketers, age 50 - 65, are getting ready to retire.
Quite simply, this generation will not be replaced by individuals who have the
same passion for catalog marketing that the generation of catalogers raised in
the 1970 - 1995 timeframe had. During the next ten years, we will see a
considerable number of business failures, because a generation of individuals
used to communicating with customers age 50+ will be replaced by a generation
of leaders ready to market to customers in their 30s and 40s. The disconnect
(strategies for young customers, marketed to older customers) will drive down
productivity, and result in organizational transformation. Leading catalog
companies will recognize this well ahead of time, and will cope by developing
new brands that are targeted to a younger audience, led by a younger generation
of leaders. Think of a business like, say, Cuddledown of Maine, building a new
online brand for a younger demographic, training younger employees to manage
this business, so that when a generation of leaders and customers move on to
retirement there is an infrastructure ready to replace the core business.
Thegies: We ask our clients what is the strategic and
tactical direction regarding Social Media and Mobile and it is surprising how
few merchants can share the strategically vision in these areas. But today
Shoppesimple can help you monetize both your Social Media and Mobile
strategies. Simple checkout RSSCheck.com for answers and contact information.
Email info@rsscheck.com
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