Dear Dr. pROfIt
By Kevin Hillstrom
About Kevin
Kevin Hilstrom is president of MineThatData, a consultancy that helps CEOs understand the complex relationship between advertising, customers, products, brands and channels. His clients include billion dollar retailers, international direct marketers, publishers, catalog brands and online pure-plays.
Prior to founding MineThatData, Kevin spent nearly 20 years in multichannel retailing at some of the most well-known brands in the U.S., including Nordstrom, where he was the vice president of database marketing, Eddie Bauer and Lands’ End. Kevin is also author of numerous books, including his most recent, “Online Marketing Simulations,” available at Amazon.com.
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Use Merchandise Intelligence to Fuel Email Success
This is a fun exercise … I promise. Using whatever tagging or source code method you employ within your email marketing campaigns, identify all customers who purchased from your last email campaign.
Next, look at the merchandise purchased by these customers. What percentage of the merchandise sold was actually featured in the email campaign? Is it 6 percent? Twenty percent? Eight-five percent?
The new decade presents marketers with many challenges, one of them being what I call “merchandise intelligence.” Merchandise intelligence involves understanding how merchandise presentation impacts what actually sells. It turns out that there isn’t always a direct link between the merchandise that's featured in an email or catalog marketing effort.
Companies are learning that email marketing isn’t always about featured items. More and more often, featured items are designed to drive consumers to marketers’ websites. Once they arrive at your website, it's the job of the website to convert shoppers to buyers — regardless of what the merchandise is.
I’ve worked for catalog brands who thoroughly understand this concept. They omit low-performing merchandise from their catalogs, knowing from mail/holdout tests that customers driven to their websites ultimately find the low-performing merchandise. High-performing catalog merchandise ultimately funds sales of low-performing merchandise online, a win-win for all products.
Paid search works the same way. Many companies observe — via merchandise intelligence reporting — that consumers click on certain terms, only to buy different merchandise when they're directed to the website.
The future is about direct marketers who know what merchandise inspires consumers to buy something, anything.
Unfortunately, this world isn’t about gut feel. Putting merchandise in an email campaign because it “represents the essence of the brand” is unlikely to work on a consistent basis.
Instead, move beyond gut feel and instinct, beyond open and clickthrough rates. Marketers need serious merchandise intelligence: a thorough understanding of what sold to which audience, sharpened via mail and holdout tests.
Email marketing has long been viewed as the playground of marketers. In the next decade, merchants need to take a seat at the table, using analytics to derive merchandise intelligence that fuels effective direct marketing strategies.
Kevin Hillstrom is president of MineThatData, a database marketing consultancy. Kevin can be reached at kevinh@minethatdata.com.
