Dear Colleagues,
As our final newsletter of the year we go out with nothing less than a fully loaded edition of “The Difference”; it should be called the “Red Meat” edition.
What a year it has been. Unfortunately, our sanguine predictions were dead on and we are looking at a holiday season that will be down as much as 10% over last year and we will have had to say goodbye to certain catalogers that were unable to sustain the cost increases leveled upon them. We saw little if no outrage by the Direct Marketing Association and we see the grave threats to the catalog industry as whole still looming.
For the full year of 2009, we expect flat growth in terms of customer buying segments as a blended whole:
- The community of savvy shoppers who buy only off-price will continue to grow. These buyers love and cherish the Brand but are less concerned with the luxury of the Brand experience. To reach them and win their sales, Brands must focus on quality, easy access, and easy return. Think accessibility in 2009 on all levels.
- Traditional core shopping seasons like Christmas, Back to School, and Spring Fashion will continue to contract. Buyers will be looking for the bargains that follow these seasons. The traditional retail calendar will shift to shorter seasons on full price and longer seasons on off-price. All marketers will need to respond to these changing consumer behaviors.
- The number of households shopping the multichannel world will be flat. Graduates, new marrieds, and divorced couples will continue to create new households, participating in the economy but with a restricted spend. The senior citizen segment is growing and as it moves into retirement, its spending will be constricted, as seniors feel the brunt of this current financial upheaval and try to conserve their funds in its wake.
- The new marketing stratagem for 2009 is regionalizing your contact strategy. Focus on region as a start, then merchandise, and then consumption.
Therefore, 2009 is the year for the sophisticated marketer to rise up, take what marbles are left, and plow forward. Marketers need to use finely honed tools to lead the Brand worlds to the next level irrespective of the revenue size of their organizations or products.
To those industry leaders in all sectors who continue to be mired in the spiral downturn, I say, in the words of the character of Loretta Castorini played by Cher, to Ronny Cammareri played by Nicolas Cage, in the movie Moonstruck (the one handed baker in love with his brother fiancé), “Snap out of it!” Stop asking for the dissection of the data, endless hours in a conference room with no windows looking to find marketing spend cutbacks. Search out those individuals and or suppliers who will show you only one thing, and that is, your customer path to purchase.
Build your team with those who understand, articulate, and know how to respond to what is happening with the market, the merchandise, and the customer’s decision to spend or not spend. Stop surrounding yourselves with those whose fear helmet is so tight it keeps them from being able to see beyond the walls of their offices or their next paycheck. Warriors only need to stick around for the fight.
Many in the direct industry have long believed that customer in/customer out was the mantra of retailers, that they did not know how or really want to understand their customers. Catalog and online marketers like to tell stories of egregious missteps in the work of retail marketing – standard practices of blanketing coupons on door steps with little regard to affinity, poor capture of customer information, lack of understanding of the customer desires, and a world of missed opportunities to cross sell; while gloating that they as direct marketers, had the understanding, the tools and the focus to find their customers and speak to them.
Well… it is a whole new world out there. Say “good-bye” to your old whipping post. This last month I had the chance to attend a multichannel marketing forum held by Women’s Wear Daily focusing in on multichannel marketing for Brands in all sectors and sizes. A single word, “WOW!” The line-up was filled with impressive speakers – industry leaders who shared their vision, passion, and desire to ensure they are aspirational, relevant, and targeted in a multichannel world by using data, trends, and an obsession with the customers’ desire to consume their product.
These leaders were talking growth, big ideas, using target marketing and data to drive the way they deliver value to the customer. They talked of luxury being attainable for all. They described the new luxury which is about incredible, personalized service. Many of the great Brand names discussed the same key directives:
- The desire to have a place in the consumer’s life, where the product was a manifestation of shared core values between the company and the customer, creating trust in the Brand.
- The need for both new and old media to be measured and integrated.
- Merchandise wrapped in great service as the foundation for a Brand’s growth trajectory.
These speakers all got it – that the customer and how she consumes is paramount. Treating her with respect, understanding what she would love to have next, and making sure she is in love with the experience is mission critical. Retailers are poised for moving to the next level.
At the same time, this year I listened to many catalogers who have lost their passion and understanding of the customer except through what I call RFM on steroids – using pumped up segmentation to cut back circulation to the point that growth is impossible. These marketers have lost their focus on the customer path to purchase as they try quick fixes to respond to the crisis of insanely overpriced United States Post Office costs and the failed and grossly overpriced technology systems. These mailers show a lack of desire to integrate merchandise purchase behavior into the contact chain for relevancy, and consequently have driven response rate down and costs up. There are very few places for these catalogers to turn. My heart breaks for the direct industry community that gave birth to my career. But in 2009 you can no longer linger; every cataloger must move forward with bold steps of action and laser focus on the customer.
So, fear not. In this issue we give catalogers and retailers insights and tools we believe to be game changing in 2009 and show how Marketsmith can take you to the next level of play to read results and optimize advertising spend.
Read on. Look in this edition for the article on merchandise – the lost art/lost revenue, the elusive marketing database – why does it make us angry (because the cost is high and the value is low), more postal points, and finally what Monica would do if she were running your business, Ask the Marketsmith.
Additionally, we at Marketsmith have created a game plan for mailers to address the economic uncertainties. If you would like a copy, please let me know and I will send it to you.
Finally, I would be remiss if I did not say that I am eternally grateful to those who have given this newsletter the opportunity to be seen by so many. I greatly appreciate your notes, your forwards and your questions. To you all know that I am humbled by your graciousness and I take seriously the trust you put in me and my staff to deliver beneficial and groundbreaking content and services.
To all of you, your team and your family from me, my team, and my family, please have a wonderful holiday season, keep your chin up, do great and be great in 2009 and beyond.
My Best Always,
M-
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