Always Plan by Channel
Increasingly, catalogers are moving into the multichannel model, and the numbers tell you why. A 2006 Direct Marketing Association survey showed that buyers who use two channels to purchase from a marketer spend 32 percent more on goods and buy 12 percent more frequently than those who purchase from a single channel. Furthermore, customers who purchase from three channels are 73 percent more likely to buy similar products from that merchant, strengthening brand loyalty across all channels while increasing the volume and frequency of sales.
The key to expanding into a multichannel marketplace is how you handle the channels. The tendency is to want to treat all channels the same, and here’s where problems can occur.
Each channel has its own standards of marketing, merchandising and fulfillment designed to address the differences in how people shop within that channel. The businesses that are most successful are those that recognize the uniqueness of each channel and plan accordingly.
This means applying best practices to account for the unique characteristics of catalog, online and retail merchandising at every step of the planning process. That means establishing the company’s overall financial plan, as well as financial plans for each channel, including:
✔ open to buy;
✔ assortment planning;
✔ demand planning; and
To plan effectively, catalogers must consider such key factors as the number of titles and drops, response-rate targets, timing of their mailings, new vs. repeat strategies, merchandising hierarchy, robust color/size analysis, and how their products are offered on the page.
Web sites need to be approached as more than electronic catalogs. Merchandisers must consider such issues as the number of Web sites, landing page changes, e-mail campaigns, conversion rates, portal plans, factors that drive sales to Web sites, and seasonal assortment planning.
Likewise, the retail channel has unique considerations. The planning process must take into account new and company stores; seasonal curves; individual store attributes, such as climate and location; as well as attributes and volume grade that can impact assortment plans. In addition, retail merchandisers must not only plan for initial stock quantities, but also back stock and the allocation of assortments to stores based on item performance.