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Vermont / New Hampshire Presentation: April 5, 2018

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Vermont / New Hampshire Presentation: April 5, 2018

  1. 1. Four Choices For The Modern Catalog Marketer Kevin Hillstrom President, MineThatData Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 1
  2. 2. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 2 The Future Hard Work Real Marketing
  3. 3. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 3 Philadelphia Eagles 2010 = 10-6. 2014 = 10-6. 2011 = 8-8. 2015 = 7-9. 2012 = 4-12. 2016 = 7-9. 2013 = 10-6. 2017 = 13-3.
  4. 4. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 4 The Process Fired Multiple Coaches Rebuilt (Twice) Drafted A Franchise Quarterback (Lucky) Young, Fast Defense Innovative Offensive Coaches Adapted To Changes In League
  5. 5. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 5 “Adapted to Changes”
  6. 6. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 6 Companies That Started As Catalog Brands What is the process used by companies that started as catalog brands to rebuild and “win” in modern commerce?
  7. 7. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 7 Here’s A Quiz To Help You Decide If You Need To Adapt/Change.
  8. 8. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 8 Question #1: When you plan your email marketing campaigns, do you make sure that the campaigns integrate with the catalog that mails near it, or do you merchandise your email campaigns and personalize them in a way that maximizes company sales potential?
  9. 9. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 9 Question #2: Are half or more of your new customers acquired via Google, Facebook, and/or Catalog Co-Ops?
  10. 10. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 10 Question #3: Are you acquiring fewer customers today than in 2013 on the same ad cost investment?
  11. 11. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 11 Question #4: Are you generating less demand today from new items than you generated back in 2013?
  12. 12. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 12 Question #5: Do you generate more than 3% of your annual sales from customers mailing an order form and a check to your call center?
  13. 13. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 13 Question #6: Do you generate more than 15% of your annual sales from customers calling your call center and placing a catalog order that is easily tied to a catalog key code / source code?
  14. 14. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 14 Question #7: Are catalog matchbacks your primary vehicle for measuring catalog marketing success?
  15. 15. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 15 Question #8: Do you have a hard time selling merchandise if the merchandise isn’t featured in your catalog?
  16. 16. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 16 Question #9: When you introduce new merchandise, do you put a dot on your catalog calling out new items and then quietly hope the customer will buy the items while unenthusiastically featuring the items on an integrated omnichannel home page?
  17. 17. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 17 Question #10: When you review marketing activities in a quarterly meeting at your company, are catalogs the primary focus of the review, with all other marketing channels taking a back seat?
  18. 18. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 18 Question #11: When a Visiting Professional arrives at your company, do you either provide catalogs in the waiting area for the Visitor to thumb through or hand the Visitor a catalog before s/he leaves?
  19. 19. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 19 Question #12: When an outsider has ideas to grow your business, do you frequently think (aloud or to yourself) “WE TRIED THAT, IT WON’T WORK”???
  20. 20. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 20 Question #13: Does your Executive Team demand that you sell stuff today at the expense of learning something that might be valuable in the future?
  21. 21. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 21 Question #14: Do you think you are competing against Amazon?
  22. 22. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 22 Question #15: Do you watch the struggles that JCP had/has (reinvented the business, lost 30% of sales, went back to business as usual, didn’t grow, and are now stumbling again) and think to yourself … “THAT DOESN’T APPLY TO US”??
  23. 23. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 23 Question #16: Do you obtain more industry knowledge from Vendor Sales Reps than you obtain from Professionals at non-competitive organizations that have similar business models to your business model?
  24. 24. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 24 Question #17: Do some of the Professionals at an Executive Level at your company have spirited discussions about whether an upcoming catalog should be 64 pages or 68 pages?
  25. 25. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 25 Question #18: Does every customer on your email subscriber list get the exact same version of a typical email marketing campaign?
  26. 26. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 26 Question #19: Are fewer than half of your desktop/laptop/mobile website visitors from mobile devices and/or tablets?
  27. 27. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 27 Question #20: Do you penalize online buyers because they have a lower lifetime value than catalog-sourced newbies have?
  28. 28. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 28 Question #21: Do you have long-term winning items that are adored by long-term high-value catalog customers?
  29. 29. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 29 Question #22: Does your catalog marketing program account for more than 35% of annual sales?
  30. 30. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 30 Question #23: When asked if you are a catalog brand, you respond by saying “Oh no, we’re not a cataloger, we’re an omnichannel brand who leverages catalog marketing in an integrated manner. Catalogers are dead. We’re fine!”
  31. 31. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 31 Question #24: Are you skeptical of giving responsibility to younger Professionals (those under age 35)?
  32. 32. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 32 Question #25: If you have retail stores, are you learning that you lose more sales in stores than you make up online (i.e. did you lose $10,000,000 in stores in 2017 while your online channel grew by $7,000,000 in 2017)??
  33. 33. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 33 Question #26: Are you working harder to reactivate lapsed buyers because you are having a hard time finding new customers and need to make up for the new customer shortfall?
  34. 34. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 34 How Many “Yes” Answers Did You Have?
  35. 35. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 35 YES Answers 23+ = OMG! 14-22 = You Must Do Something Different! 7-13 = Old School, You “Should” Do Something Different!
  36. 36. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 36
  37. 37. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 37 What Changed? Shifting Demographics Remember Judy / Jennifer / Jasmine?
  38. 38. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 38 What Changed?
  39. 39. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 39 What Changed?
  40. 40. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 40 What Changed?
  41. 41. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 41 What Changed?
  42. 42. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 42 What Changed?
  43. 43. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 43 What Changed?
  44. 44. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 44 What Changed?
  45. 45. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 45 What Changed? You can’t be a “digital” / “omnichannel” brand if your core customer is 65 years old and purchases merchandise preferred by 65 year olds and lives in rural areas where customers love merchandise offered by catalog brands.
  46. 46. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 46 What Changed? Co-Op Feedback Loop The algorithms were quite good … so good in fact that they over-optimized catalogers into a merchandise assortment for 65 year old customers.
  47. 47. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 47 What Changed? The End of Customer Acquisition as we know it. Ask E-Commerce Brands who are selling themselves to large brands. They wouldn’t do this if cheap customer acquisition was still easy!
  48. 48. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 48 What Changed? Gatekeepers Google + Facebook + Catalog Co-Ops own customer acquisition. Without a credible low-cost / no-cost program, you are at their mercy. Not good.
  49. 49. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 49 What Changed? Expenses Cash required to prop up a 30% ad-to- sales ratio limits experimentation.
  50. 50. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 50 What Changed? Expenses We were told to be “omnichannel” and leverage retail stores for success at the very moment when fixed costs (and debt) became a problem.
  51. 51. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 51 What Changed? Partners / Expenses Catalog Holding Companies operate with lower fixed costs and cross-pollinate. It’s happening in e-commerce too (Wal-Mart).
  52. 52. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 52 What They Do Source = Stratchery Blog
  53. 53. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 53 What We Do Source = Stratchery Blog
  54. 54. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 54 What Changed? New Merchandise New Merchandise is the lifeblood of a catalog brand. New Merchandise that can easily be sold on Amazon becomes useless to the cataloger.
  55. 55. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 55 What Changed? Channel Continuum Mail  Phone  E-Commerce  Search  Social  Mobile  AI / Machine Learning. You can’t be on the Mail/Phone end of the continuum anymore.
  56. 56. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 56 What Changed? Vendors Own “The Conversation”
  57. 57. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 57 What Changed? Over-Emphasis on Tactics Who cares what your “emoji strategy” is? Or personalization? Or “engagement”? Or your “variable printing strategy”? We went way too far down the rabbit hole.
  58. 58. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 58 What Changed? Matchbacks Matchbacks became dramatically outdated in the past five years … whereas mail/holdout groups became more important than ever.
  59. 59. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 59 What Changed? Wrong Metrics We measure the engagement of a tweet in real time but we don’t know how many of last year’s customers we retain.
  60. 60. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 60 What Changed? No Middle, Few Winners You are either big and you “scale” or you are small and unique and scrappy and very different. The middle is now fully owned by Amazon / Large Retail.
  61. 61. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 61 What Changed? Boring Stinks Boring is being replaced by convenient. This battle is seldom won by small companies … it’s the domain of “scale”.
  62. 62. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 62 What Changed? Monetization How we get paid is changing. We used to write descriptive copy coupled with images and customers paid us $. Instagram killed this business model.
  63. 63. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 63 Others Are Dealing With This Problem. We’re Not Alone.
  64. 64. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 64 Newspapers / Cable News vs. Facebook/Twitter (and Fake News).
  65. 65. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 65 Television & Declining Paid Subscriber Base
  66. 66. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 66 Fewer People Are Attending College Football Games
  67. 67. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 67 Fewer People Are Visiting Malls (i.e. the co- op problem in retail).
  68. 68. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 68 Facebook Is Killing Monetization of Comedy.
  69. 69. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 69 NASCAR Racing Attendance and Viewership Are At 10 Year Lows.
  70. 70. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 70 Landlines Are In Fundamental, Irreversible Decline.
  71. 71. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 71 How Does Garmin Compete Against Google Maps?
  72. 72. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 72 How Do Rolex / Omega Compete Against Fitbit / Apple Watch?
  73. 73. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 73 How Does Barnes & Noble Compete Against Amazon/Kindle?
  74. 74. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 74 How Does A Musician Compete Now That CDs are Dead?
  75. 75. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 75 Apparel?
  76. 76. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 76 PC Sales?
  77. 77. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 77 Food?
  78. 78. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 78 Hotels?
  79. 79. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 79 Multiple Brands
  80. 80. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 80 Pizza / Cars
  81. 81. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 81 New Stadiums Luxury Boxes, Gourmet Food, 33-Degree Slope on Seats, A Standing Section, Covered Grandstands that keep rain out and noise in, 500+ Wireless Access Points, Fewer Seats (to create demand to buy tickets now), Great Locker Rooms & Peanut Butter Sandwiches (to attract players).
  82. 82. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 82 Fan Experience
  83. 83. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 83 We’re Heading Toward Events / Activities That Do Not Compete Against Amazon.
  84. 84. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 84 But That Isn’t The Only Path To Success For Traditional Brands.
  85. 85. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 85
  86. 86. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 86 SCALE = AMAZON, WAL-MART
  87. 87. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 87 BUY!!
  88. 88. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 88 BUY!!
  89. 89. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 89 BUY!!
  90. 90. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 90 BUY Alps & Meters
  91. 91. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 91 Want To Be Unique?
  92. 92. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 92 Want To Be Unique?
  93. 93. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 93 Pundits + Unique
  94. 94. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 94 Simple and Unique
  95. 95. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 95 Gliebers Dresses I’ve analyzed 50ish catalog brands in the past year. The following Gliebers Dresses example is an average of what I see across 70% of my catalog client base when performing my “FIX IT” analysis framework.
  96. 96. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 96 Gliebers Dresses Executive Team Glenn Glieber (Owner, CEO, 40+ Years). Meredith Thompson (Chief Merchandising Officer, 40+ Years). Roger Morgan (Chief Operating Officer, 10 Years). Lois Gladstone (Chief Financial Officer, 9 Years). Pepper Morgan-Pressley (Chief Marketing Officer, 8 Years).
  97. 97. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 97 Gliebers Dresses If you want change to happen, you can’t just tell people what to do. You have to convince an Executive Team to do things that are in the best long-term interest of the company … stuff that they may not be employed to see come to fruition. What is their motivation to make change happen?
  98. 98. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 98 Gliebers Dresses: Rebuy Rate 2017 Rebuy Rate = 37.7%. 2016 Rebuy Rate = 36.8%. 2015 Rebuy Rate = 37.5%. 2014 Rebuy Rate = 38.1%. 2013 Rebuy Rate = 37.4%.
  99. 99. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 99 Gliebers Dresses: Rebuy Rate If your annual repurchase rates are < 40%, then you have no choice but to focus the majority of your marketing efforts on Customer Acquisition. This is the opposite of how most of our marketing teams are calibrated, and helps explain why growth is so hard to achieve.
  100. 100. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 100 Gliebers Dresses: Rebuy Rate Meredith Thompson, Chief Merchandising Officer: “Obviously Pepper has no idea what she is doing. Either she is mailing the wrong customers or is acquiring the wrong customers. If she found the right customers, our rebuy rates would be fantastic. Customers love my merchandise!!”
  101. 101. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 101 Gliebers Dresses: Migration Among 2016 Mail Customers, 93% will buy again via mail next year. Among 2016 Phone Customers, 91% will buy again via Phone next year. Among 2016 E-Commerce Customers, 24% purchased next year via Mobile/Tablet. Among 2016 Mobile/Tablet Customers, 77% purchased next year via E-Commerce.
  102. 102. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 102 Gliebers Dresses: Migration Gliebers Dresses customers are mostly “fossilized”. They are stuck. They like the channel they buy from, and they’re not willing to move along the Mail  Phone  E- Commerce  Search  Email  Social  Mobile timeline. This is a classic symptom of a company with an older customer base that does not want to change. You may want to change, but your customer base won’t let you change. 70% of my catalog client base is in this situation.
  103. 103. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 103 Gliebers Dresses: Migration Lois Gladstone, Chief Financial Officer “Have you ever engaged with us on an iPhone? It looks like you’re playing Space Invaders on an Atari machine from 1986. Roger needs to get his nose out of Woodside Research reports and actually put competent developers on the task of creating a credible mobile presence. And then we need to stop selling dresses that 65 year olds like and actually have a credible Instagram presence. Pepper and Roger are killing this company.”
  104. 104. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 104 Gliebers Dresses: Migration Roger Morgan, Chief Operations Officer “How do you have a credible mobile experience when your pay grades won’t accommodate a thirty year old employee who deserves to be paid $175,000 a year and wants stock options that we can’t offer. And honestly it doesn’t matter, because the 74 year old mailing orders with a check isn’t going to start buying on a iPhone 8.”
  105. 105. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 105 Gliebers Dresses: Profit
  106. 106. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 106 Gliebers Dresses: Profit Meredith Thompson, Chief Merchandising Officer “We just had the most profitable year in the past five years. Retail is imploding and we had a really solid year. Everybody just needs to shup up and support my efforts to grow the business. Find the right customers. Deliver the right merchandise quickly. This isn’t a merchandising issue, and the p&l demonstrates that I am right. I mean, Glenn Glieber put a million dollars of after tax cheddar in his bank account. He’ll tell you it was a good year.”
  107. 107. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 107 Gliebers Dresses: Newbies
  108. 108. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 108 Gliebers Dresses: Newbies New Customers: Co-Ops = 329,443. New Customers: Google = 45,983. New Customers: Facebook = 15,004. New Customers: Other Marketing = 43,832. New Customers: Not Tracked = 62,473.
  109. 109. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 109 Gliebers Dresses: Newbies This is the classic signature of a brand that has no credible low-cost / no-cost customer acquisition program in place. More than 85% of customers are acquired via marketing. That’s a problem. UNIQUE brands obtain 50%+ of new customers via word-of-mouth.
  110. 110. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 110 Gliebers Dresses: Newbies Pepper Morgan-Pressley, Chief Marketing Officer “I am in an impossible situation. If I cut the co-ops off, our business is eighteen months away from failing. If I keep investing in them my metrics look awful and I acquire fewer customers. The customers I acquire from co-ops are 65 years old and they only want to shop from a catalog, they don’t want to make the move to digital. And digital customers don’t want to buy dresses that attract 65 year old catalog customers. Tell me exactly what I should do to solve this problem?”
  111. 111. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 111 Gliebers Dresses: Newbies Lois Gladstone, Chief Financial Officer “I empathize with Pepper. There’s no way she can sell dresses tailored to a 60-70 year old audience to a digital customer who spends her time on Instagram. And yet, that’s exactly what we have to do in order to move into the future. How do you do that without throwing the core brand under the bus? How do you do that when you don’t have cash to start a new business unit that caters to a 30-40 year old digital Mom?”
  112. 112. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 112 Gliebers Dresses: Newbies Roger Morgan, Chief Operating Officer “Woodside Research demands that brands become digitally native, offering an engaging experience that spans all channels in a relevant manner. They recommend leveraging machine learning and artificial intelligence to capture the heart of today’s digitally native Millennial audience. They make it sound easy, and it probably is easy. But then I wonder to myself, if it were so easy, why isn’t Woodside Research doing it? They must have a good reason.”
  113. 113. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 113 Gliebers Dresses: Comps
  114. 114. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 114 Gliebers Dresses: Comps Meredith Thompson, Chief Merchandising Officer “Nobody uses the Comp Segment framework to measure business effectiveness. Nobody. I don’t trust stuff that isn’t used widely within my industry. Show me a square inch analysis and I’ll show you a Consultant I trust. Maybe the Comp Segment framework is effective in e-commerce, but our business is unique and special and requires a nuanced analysis leveraging best practices from experienced industry consultants … folks I know and have worked with previously.”
  115. 115. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 115 Gliebers Dresses: New Merch
  116. 116. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 116 Gliebers Dresses: Exi. Merch
  117. 117. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 117 Gliebers Dresses: Merch Meredith Thompson, Chief Merchandising Officer “I keep trying to tell people that this isn’t a merchandising issue. I really think Pepper has lost the ability to engage the audience. There was a time, about a decade ago, when we rotated through Marketing leaders on an annual basis. It might be time for us to put some fresh marketing ideas on selling new and existing merchandise effectively.”
  118. 118. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 118 Gliebers Dresses: Class Of
  119. 119. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 119 Gliebers Dresses: Class Of Meredith Thompson, Chief Merchandising Officer “Yes, we cut back on a large number of existing items that were not trend-right. It was the right thing to do to protect the brand. But I think Lois deserves some blame here as well. She required us to cut back from an average of 84 pages per catalog to an average of 80 pages per catalog. That killed my ability to tell a compelling story – I mean, we lost two spreads fifteen times last year. That has to be what is driving some of the negatives. At least that’s what our paper rep said.”
  120. 120. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 120 Gliebers Dresses: Class Of Roger Morgan, Chief Operating Officer “We spent $800,000 less on marketing last year, that one is on Lois. Did we have the best year in the past five years? Yes. But at what cost? Leading companies invest in marketing. We need to invest more, especially in omnichannel initiatives, because Woodside Research says that forward-thinking brands no longer view the world in terms of channels, but in terms of one brand / one customer. Does that make sense? It’s advanced stuff, I know.”
  121. 121. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 121
  122. 122. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 122 What Quadrant Is Gliebers Dresses In?
  123. 123. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 123 Gliebers Dresses: SELL! Issues leading to a SELL designation: Profit is tepid. Unique = 10%+ EBITDA. Repurchase Rates < 40%. New Customer Counts are Failing. Marketing Covers Up Problem With Lapsed Buyers. Channel Crossover is “Fossilized”. New Merchandise Comps Are Inconsistent. Existing Merchandise Comps Are Inconsistent. Merchandise Classes Are “Killed Off” Too Soon. Co-Ops + Google + Facebook
  124. 124. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 124 How Do You Communicate Facts To Gliebers Dresses Management?
  125. 125. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 125 Gliebers Dresses: Facts Roger Morgan, Chief Operating Officer “Woodside Research says we are in the age of ‘data- driven’ decisions. I think you just let the data speak for itself. I’ll have my team produce a series of reports and I’ll bounce the reports off of our sales rep at Woodside Research and we’ll just go from there. It will be a series of unbiased reports because my team isn’t in marketing and therefore doesn’t bring pre-conceived notions to the table. Let the Information Technology folks who report to me make solid recommendations. We can fix this!”
  126. 126. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 126 Gliebers Dresses: Facts Pepper Morgan-Pressley, Chief Marketing Officer “Samantha is our Data Scientist. She has produced a thousand reports based on a hundred different models, some leveraging machine learning and artificial intelligence. We’ve been down this path every month for the past five years. Nobody listens to us. Nobody. So we just stopped talking to people. We do the ‘right thing’ behind the scenes, making the company money. When we do the right thing, Meredith gets credit. It’s a simple process, to be honest.”
  127. 127. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 127 Gliebers Dresses: Facts Meredith Thompson, Chief Merchandising Officer “Samantha says she stores her analytics in the cloud. I’m telling you that her HEAD is in the cloud! I don’t need some snobby Professional with a Master’s Degree in Computer Science telling me that her ideas have a 96% chance of succeeding. She’s never been a merchant. And cripes, the last thing I need is Roger Morgan shoving reports down my throat authored by third parties. What do outsiders know about a business I’ve worked in for more than forty years?”
  128. 128. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 128 Gliebers Dresses: Facts Lois Gladstone, Chief Financial Officer “I’ll trust any report that ties out to the financial reports my team produces. I can count on one hand the number of times marketing tied out their web analytics data to anything meaningful. And catalog matchbacks, geez, those things can be rigged to say whatever you want them to say. So maybe marketing can do the hard work for once and tie things out and then I’ll pursue a data-driven approach.”
  129. 129. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 129 How Do You Get Gliebers Dresses To ACT Given What They Already Know?
  130. 130. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 130 Tell The Room What You Would Do If You Led Gliebers Dresses?
  131. 131. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 131 Leadership. Shared Goals. Shared Bonus. Rebuild. Reward. Experiment NOW.
  132. 132. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 132 Shared Bonuses Objective #1: Increase annual new customers to 575,000 at a total profit-per-new-customer of > $0.00 total. Exceeds (2 points) = 625,000 or more new buyers in 2018 and a PPNC > $0.00. Meets (1 point) = 575,000 – 624,999 new buyers in 2018 and a PPNC > $0.00. Missed = 0 to 574,999 new buyers in 2018 or a PPNC < $0.00.
  133. 133. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 133 Shared Bonuses Objective #2: Increase annual demand to $65,500,000 with 53% of annual demand from new merchandise. Exceeds (2 points) = $70,000,000+ with 55%+ from new merch. Meets (1 point) = $65,500,000 - $69,999,999 with 53%+ from new merchandise. Missed = Failure to hit $65,500,000 annual demand or failure to generate 53%+ from new merchandise.
  134. 134. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 134 Shared Bonuses C-Level Executive Payout = 100% of Salary. Vice President Payout = 70% of Salary. Director Payout = 40% of Salary. Manager Payout = 25% of Salary. Analyst Payout = 15% of Salary.
  135. 135. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 135 Shared Bonuses 4 Points Earned = 100% of Bonus Level. 3 Points Earned = 75% of Bonus Level. 2 Points Earned = 50% of Bonus Level. 1 Point Earned = 25% of Bonus Level. 0 Points Earned = 0% of Bonus Level.
  136. 136. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 136 Shared Bonuses All employees are forced to collaborate to make the two objectives happen. You will tell the entire industry you are looking for the best talent – talent willing to work hard and be rewarded with a highly credible compensation structure. No growth – No reward. Big growth – Big reward.
  137. 137. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 137 Shared Bonuses Management must post a dashboard on LED Televisions all across the building, communicating how the company is progressing toward each objective. Call it Gliebers TV. Have employees host shows communicating how key merchandising, marketing, creative, IT, website ops projects are generating new winning items and new customers above-and-beyond objective levels.
  138. 138. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 138 Why Is Gliebers Dresses Willing To Pay Marketing Vendors $15,000,000 A Year But Not Pay Employee Bonuses?
  139. 139. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 139 Fix The Existing Business In The Short-Term.
  140. 140. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 140 Buy Yourself 2 Years To Experiment With New Ideas, Merch, Mktg.
  141. 141. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 141 I Know, You Don’t Want To Do This … “This Idea Won’t Work, Give Us Something That Works.”
  142. 142. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 142 Do You Want To Be Trapped In The SELL Quadrant?
  143. 143. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 143 Rudolph Was Banished Before He Was Deemed Valuable
  144. 144. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 144
  145. 145. Kevin Hillstrom, President, MineThatData (http://blog.minethatdata.com) 145 Questions?

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