Chicago–What does the future hold for you? Get ready for extreme marketing, according to the participants in yesterday’s Power Forum brunch here at the Annual Conference for Catalog & Multichannel Merchants (ACCM). Moderated by MULTICHANNEL MERCHANT editorial director Sherry Chiger, panelists Jim Okamura, senior partner, multichannel practice for the J.C. Williams Group; Michael Sherman, former vice chairman, Crosstown Traders; and Bart Sichel, associate principal, McKinsey & Co., weighed in on where multichannel marketing was headed. The fundamental basics won’t change, the panelists agreed, but merchants are going to have to adapt some of the strategies they’re using today and take them to the extreme.
For instance, Okamura said, marketers “will need to provide excellence in the fundamentals,” such as merchandise selection, product editing, and customer service. Indeed, Sichel noted, expect to see a “stepping up of how hard we push the limits of what we do.” The channel mix might be slightly different, he explained, but it will still include printed matter, an online component, and for most merchants, a retail aspect.
Speaking of retail, the panel was asked if it will be possible for catalog/Web marketers to exist with just the two channels. It may be possible, Sherman said, “but it’s going to be harder.” It will depend on your value proposition if you can survive without retail, he added, but if you have only catalogs and Websites while your competitors have stores as well, “then you only have two clubs in your bag.”
On the flip side, store retailers will likely find that they can’t survive with only the bricks-and-mortar channel. Companies such as electronics merchant Best Buy are already embracing the direct channel, Okamura said. He added that his clients are becoming more patient regarding when they’ll see a payoff from direct marketing, as they realize they need at least five years to see real results rather than two or three years. “It’s important to see success stories in the industry [like Best Buy] to show retailers that there is a payoff.”
The Internet will certainly figure into the future prominently, although Sichel believed that “we may be hitting the limits of consumer acceptance of disruptions” in terms of e-mail and mobile technology. Mobile search is probably going to be the next big application, Okamura said, but he noted that all types of technology have their limitations. The future will involve technology that delivers content rather than offers, he explained, providing “information that helps customers meet their shopping needs.”
One thing you will continue to see in the future is print catalogs. The paper catalog will still be the center of direct marketing 10 years from now, Sherman predicted, crediting former Fingerhut president Ted Deikel as saying “You can’t take your laptop to the bathroom.” Sichel added that a catalog “makes the brand tangible—it puts the brand in the customers’ hands.”
One aspect of print cataloging that may change is an increase in the use of selected binding, Sichel said, adding that magazine publishers are already doing substantial print runs of different versions. Similarly, Okamura anticipated that advances in segmenting and targeting “will allow for some different metrics.”
What are the gravest errors multichannel merchants are guilty of? Not prospecting heavily enough is a big one. “The response in tight times is almost always to pull back” from prospecting, Sichel said. “Marketers must have a long-term mindset.”
Sherman echoed his sentiments more bluntly: “We’re afraid to find new customers.” Most merchants would rather just rent the names of their competitors than invest in bringing new consumers into the direct fold, he said. If you want to succeed and grow, Sherman noted, “you have to do more than mark up last year’s marketing plan.”
One way to add more names to the direct marketing universe is through search engine marketing, Okamura advised the audience. “We’re underinvesting in search,” and that’s a problem, as search is a good way to expand the pie to some nondirect customers.
ACCM is a joint production of MULTICHANNEL MERCHANT magazine and the Direct Marketing Association.