White Plains, NY—Successful catalogers know the importance of analyzing which products are profitable and which aren’t. But according to Robert Weinberg of RW Consulting, not enough marketers look beyond the individual item at the characteristics of the most and least successful products. This failure, he said during a session at the Fourth Annual MeritDirect Business Mailers Co-op and E-mail Marketing Conference, can stifle a business’s growth.
Item success, Weinberg said, “is a function of sales and of the space allocated to the item.” Conducting a square-inch analysis to determine a products profitability in relationship to the amount of real estate it takes up in a catalog is key to fine-tuning a company’s merchandise mix. In mature catalogs, 65%-75% of merchandise should be profitable. If more items are profitable, he said, the cataloger should see it as an opportunity to add pages and products. If the percentage is lower, a reduction in catalog pages and/or products carried is probably in order.
Analyzing products by a wide variety of characteristics, Weinberg said, not just on an item-by-item basis, can help you determine in which areas to grow your product line. For instance, analyzing the success of products by price point could show that your lower-end items perform appreciably better than your top-end products—which in turn could suggest that you add more lower-priced products to your mix.
Weinberg also suggested analyzing products by use of highlights such as “new” or “exclusive” in the catalog product description; page density; page creative characteristics, such as the models used; and brand products vs. house brand items vs. generic items.