Here's what I want you to try:
- Select every customer from your database who purchased via an iPad in the past year.
- Measure the percentage that purchase via an iPad on the very next purchase.
If the percentage is greater than 50%, your mobile business is in the process of decoupling from the e-commerce experience. You've got excitement, and you've got challenges. Both will make coming to work worthwhile.
If the percentage is less than 20%, your mobile business is not being embraced by your customers ... on a subsequent purchase, the customer migrates away from the iPad.
Or lump the iPad and iPhone and all Android devices and Blackberry devices and Windows Mobile together ... and run the same metrics above.
Increasingly, I am analyzing businesses where the customer is in the process of decoupling from e-commerce. If this is your business, then you need to stay on top of it. You need to be all over it!!
Decoupling is interesting - it works opposite of what the experts tell us. The customer makes a decision, and changes behavior. When this happens, we sub-optimize the customer experience by forcing the customer to tether herself to old-school channels.
Leave your desk right now, and have your analytics guru run a query for you:
- From May 14, 2012 to May 13, 2013, calculate the average price point purchased by marketing channel.
- Compare email marketing to every channel.
What do you see?
There's a high probability that the average price point purchased via email marketing is lower, significantly lower, than all other channels.
This happens when you hyper-optimize a marketing channel.
Email marketers hyper-optimized their channel. 20% off. Free shipping. Gotta get open rates up, who cares about the profit and loss statement, right?
Over time, the email customer file was built, and it became fundamentally different than the rest of the business. It's not uncommon to observe an email customer file that purchases items 20% cheaper than those purchased by the rest of the business. It's not uncommon to observe an email customer file that buys 75% of items via discounts/promotions, whereas 20% of the remainder of the customer file purchases via discounts/promotions.
Once this happens, the email customer file has been decoupled from the rest of the business. Integration with the rest of the business becomes sub-optimal, and for good reason ... you're dealing with a fundamentally different customer. It's a lot like JCP abandoning discounts/promos and being thumped over the head with a bag of oranges, to the tune of a -25% to -30% comp store sales performance.
When you decouple the email customer file from the rest of the business, you actually have freedom to make changes, to reverse the process of multichannel/omnichannel integration. Use email marketing to play to the strengths of customers who buy from email marketing ... those customers receive versions tailored to their interests.
Dear Catalog CEOs:
It's happening ... and it's happening largely opposite of what you were told.
I remember being at Eddie Bauer, way back in 1998. Our e-commerce business went from a million in 1996 to something like five million in 1997 to about fifteen million in 1998. We observed a funny thing about that fifteen million in demand in 1998.
- It was heavily skewed to male-gender merchandise.
In other words, the demand generated online reflected the audience that was using the internet in 1998. And when demand launched toward sixty million in 1999, well, those thoughts went out the window. Demand was more reflective of total direct channel demand, and the concept of "multi-channel integration" was born.
That's what folks focused on. Integrate the business. Make everything the same, same merchandise, same offers, same creative ... same same same.
This made sense (to some) as the baton was handed from old-school cataloging to modern e-commerce.
But once the baton was formally passed, a funny thing happened.
The trends that we observed at Eddie Bauer, way back in 1998, have reappeared ... in reverse.
E-commerce now dominates the share of demand generated by the vast majority of catalogers. But go take a look at the items that customers shopping your call center purchase.
You remember your call center, right? It's the building with old-school corded phones that took in 90% of orders in 1996 ... that same building that now captures 2% to 22% of orders today (unless your customer is June, of course).
Rank-order all items that sell at your contact center ... first to number one hundred. Then compare those items against the top-selling items from your pay-per-click program, or the top-selling items from your email marketing program.
Yup, they're different.
In other words, we're in the process of decoupling demand. All of the integration activity of the past ten or fifteen years is becoming much less important, as small tribes of like-minded customers pick and choose the channel that they prefer.
This is our future ... it's opposite of what we were told. Small tribes of customers, with unique preferences, shopping the way they want to shop, buying the merchandise they want to purchase. Our job, of course, is to respond to this trend in the most profitable way possible.
Sameness seldom results in the most profit.
It's time to get busy serving unique cohorts of customers.