Live from NEMOA: Make the Most of Your Merchandising

Boston–Customers will always respond to new, innovative and creative products, according to veteran catalog consultant Jim Alexander, principal of Alexander & Co. Keeping an eye on key merchandising metrics will help you do a better job at offering them.

Speaking at the NEMOA conference here on March 11, Alexander said that the most important merchandising benchmark is sales per book per item. “This is the leading indicator of a successful business,” he said.

“Focus on demand money first, then margin money, and then units,” Alexander said. Sales per book per item measures what customers want to buy and indicates success at picking product. Use it to “find winners and exploit them,” he said.

Catalogers today use a lot more product presentations or photos—250 to 400—than they did in the 1980s. “Merchandising with fewer products puts tremendous pressure on the merchants and inventory control needs to be perfect,” he said. And single-item presentations nearly always outperform multi-item presentations.

A catalog’s merchandise assortment should drive page counts, Alexander said, adding that fixed page counts are “usually a sign of a slower growth business. You get bigger bang for the buck with increased assortments and pages.”

When incorporating seasonal merchandise, compare your house file for all seasons on a sales-per-book-per-page basis to see if there are any opportunities for a merchandise expansion or contraction.

But do avoid what Alexander calls “The Christmas Nightmare,” or trying to sell items in your holiday catalog that you don’t offer the rest of the year. It may be tempting to target gift buyers, but you need to resist the urge, he said.

Alexander also had a warning about repeating products, which is something most catalogers do: “If you repeat items at breakeven margins, you are destined to lose money,” he said. “Those planning for breakeven margins usually achieve them—or worse.”