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F. Curtis Barry & Company’s Executive Forum is not a lecture but an interactive peer to peer exchange with other senior managers and four experts in the multi-channel industry.  It’s a great way to validate the strategies you are developing for 2008. Each of the attendees is interviewed to set the final agenda. Topics include how to make money in this challenging business climate, strategic marketing initiatives, improving merchandising, strategic multichannel issues, customer service and operations, inventory management and how to reduce expenses. We’ll close the Forum with an exciting fast-forward, five years into the future: a look at what your catalog business will look like in 2013.

Our multichannel experts and co-facilitators include:

• Kevin Hillstrom, president of MineThatData, marketing strategies and tactics
• Monica C. Smith, president of Marketsmith, Inc., strategic marketing company
• Jon Reagan, president of Reagan Consulting, merchandise consultant
• Curt Barry, president, F. Curtis Barry & Company, consultant operations, systems and inventory

Talking Points

Results For 2007

• How did your company finish the 2007 sales year compared to original plan? 
• How did the Internet online retail results for 2007 end up?
• How did your company finish sales for the Holiday 2007 season compared to original plan? 
• What are the national retail store results for Holiday 2007?
• How have you achieved profitable growth in this uncertain business climate?
• How have you “re-invented your business” as the climate has changed?

Planning for 2008

• Plans for 2008for the year overall, and specifically Spring and Summer 2008?
• Early Spring 2008 results?
• Each year, customer shops closer to Holiday.  How are you dealing with this?  After Christmas - is there a “future” (full price) season that isn’t Spring?
• When are the economic experts predicting the slow down will ease?

What are the strengths, weaknesses, opportunities, and threats to the direct-to-customer catalog, multi-channel business? 

• What are the trends in the multichannel industry?
• Expansion of categories, items, number of pages and page density
• Reduced size of catalogs
• Mailbox competition for customer readership (same drop dates)
• Reduced catalog life (number of weeks, faster selling curves)
• Product rotation:  more offers, fewer drops?
• Shrinking 12 month buyer files and universes of names (prospects)
• Response rates continue to decrease long term (over 10 years).
• Multi-title growth
• Acquisitions and consolidations
• Postage increases
• Paper increases
• Privacy
• Inbound and outbound shipping & handling cost increases
• Continued Internet growth and changes in channel mix
• State legislation and taxes
• Anti-spam legislation
• Operations productivity
• Technology growth
• IT effectiveness
• International
• Outbound selling in consumer
• Other trends?

How to Make Money in a Changing Environment

• Reviewing your P&L, what are the opportunities for improving sales and profitability? 
• Which metrics do you use and which ones do you lack?
• How will you vary the strategy by channel?
• Industry benchmarks for the most important components on your P&L. 
• How have businesses set up Internet channel P&Ls?  How are sales and expenses allocated to channels?  
• Discuss net contribution to profit concept.
• Discussion of major cost items (e.g. creative, printing, paper, postage, outbound shipping costs, etc.). 
• Are your costs growing faster than your revenue?

Ways to Reduce Costs, Increase Productivity and Improve Customer Service

• Idea exchange of what has worked and what others are planning this year.
• F. Curtis Barry & Company will have a write up of 70+ ways in contact center, fulfillment center, inventory and systems that clients are using.

What Kind Of Multi-Channel Business Do You Manage?

• A discussion about some of the long-standing “truths” about multi-channel marketing.
• Which characteristic would you prefer your customers possess?
• Purchase from multiple channels, or purchase from multiple merchandise divisions?
• Purchase from multiple channels, or purchase from multiple stores?
• Purchase from multiple channels, or purchase from multiple brands/titles?
• Purchase from multiple channels, or purchase during multiple seasons (i.e. Holiday, Post-Holiday Sale, Spring, Summer, Fall)?
• Purchase from multiple physical channels (i.e. telephone, website, stores), or purchase from multiple advertising channels (i.e. catalog, e-mail, paid search, portal advertising, traditional advertising)?
• Name a business/brand that you are aware of that experienced dramatic, long-term, sustained growth (i.e. 15% annual growth or greater, total business) because of excellent multi-channel marketing practices?
• It is believed that marketers must integrate their catalog marketing, e-mail marketing, online marketing, search marketing and traditional marketing activities, in order to truly be effective.  Is this hypothesis is true, what actual customer data do you have to support this hypothesis?
• Matchback vendors tend to allocate online orders to customers who were recently mailed a catalog.  Let’s look at a few scenarios, and determine who receives credit for the order.
• Scenario #1 = Customer received a catalog on June 1.  Customer arrives at website via paid search on June 10, and purchases merchandise during that visit.
• Scenario #2 = Customer’s first order was via catalog in 2001.  Customer receives an e-mail on June 1, and purchases merchandise online on June 3 (no catalog is mailed in past thirty days).
• Scenario #3 = Customer received a catalog on June 1.  Customer visits website on June 10, visits website again on June 12, and buys merchandise in-store on June 14.
• Scenario #4 = Customer received a catalog on April 1.  Customer visits website on June 10, and purchases merchandise online during that visit.
• Scenario #5 = Customer received a catalog on June 1.  Customer visits website on June 10, and purchases merchandise online, merchandise that was not offered in the catalog.
• Scenario #6 = Customer received a catalog on June 1.  Customer received an e-mail on June 3.  Customer clicks through the e-mail, visits website, and purchases merchandise not offered in the catalog or in the e-mail campaign.
• Scenario #7 = Customer received a catalog on May 15.  Customer received a catalog on June 1.  Customer received an e-mail campaign on May 22.  Customer received an e-mail campaign on May 29.  Customer received an e-mail campaign on June 5.  Customer received an e-mail campaign on June 23. Customer purchases merchandise in-store on June 16.
• Multichannel Forensics:  How Customers Interact With Advertising, Products, Brands And Channels.
• Customer Repurchase Modes
• Retention Mode:  Annual Repurchase Rate of 60% to 100%.
• Hybrid Mode:  Annual Repurchase Rate of 40% to 60%.
• Acquisition Mode:  Annual Repurchase Rate of 0% to 40%.
• Customer Migration Modes
• Isolation Mode:  Customer will not shop other channels.
• Equilibrium Mode:  Customer shops other channels.
• Transfer Mode:  Customer switches from one channel to another channel.
• The role of a catalog in a multi-channel direct channel environment.
• A discussion of the nine ways a catalog interacts with a website.
• Which of the nine categories does your catalog business fall into?
• The role of a catalog in a phone/website/retail multi-channel environment.
• If catalog is in Isolation Mode, you have a genuine standalone catalog business, one that may defy integration issues.
• If catalog is in Equilibrium Mode, you have a genuine multi-channel business that probably requires significant integration.
• If catalog is in Transfer Mode, you have hard decisions to make in a few years about the future of your catalog marketing efforts.
• Enhanced business understanding with matchback routines and test/control groups.
• What kind of “multi-channel” business do you manage, and given our discussion today, how might you think differently about your business?

Marketing Strategic Issues

• Measurement
• What marketing metrics do you use? (e.g. top line sales, sales/book, etc.)? 
• Do you have a standardized way of looking at marketing metrics?
• What are the most important factors you look at in measuring performance month over month? 
• Are you growing your file currently?
• Competition
• How do you look at your competitors?
• What can you learn from your competitors?
• How do you compete with merchants that are primarily on-line retailers?
• What are the most effective media for driving people to your website?
• Promotional Strategies
• How do you use free shipping? Free gifts?  Dollars/percent off?
• How do you evaluate free shipping?  Free gifts?  Dollars/percent off?
• Which strategies have the most negative effects on long term profitability?  Which have the greatest short term impact?
• Customer Satisfaction
• Do you know how your customers experience your company?
• How do you understand the customer experience?
• What are the most cost effective ways of getting meaningful customer feedback?
• What has been your customer’s reaction to S&H?
• Customer Acquisition
• How are co-ops working for you?
• How do co-ops compare with rental lists?
• How do you use customer understanding?
• How many personas are in your customer file?
• How do you communicate to them differently?
• Is you email program one communication message fits all?

Business Tool Sets

Do you have the right tools in place to plan and manage the business in this tough business climate?  (e.g. analytical data bases, forecasting tools, business intelligence, web analytics, etc.)

Improving Merchandising

Overall Merchandising Strategy and Direction

• How are big box retail and specialty retailing trends affecting your business?
• Which classifications experienced the greatest success in F/H 2007? Conversely, which took the biggest hits?
• Will the 2007 results lead to changes in key components of your strategy?

• Brand identity, differentiation
• Customer definition
• Competition

• How would you describe your merchandising approach to “newness” in 2008?

• Reinventing your business (seismic!)
• Identifying new categories (directional change)
• Finding new items (fine tuning)

• What have been your most successful approaches in identifying new categories? “Mega” Trends?   “Micro” Trends?
• Most successful sources for new product selection?

• Customers
• Trade Shows
• Established Vendors
• Competition

• In a promotional climate, what are the best ways other than price on which to compete?

Assortment Planning; Establishing Benchmarks

• In recent years, how has your merchandise assortment changed from "exclusive items" to more commodity products and what is the impact of the change?
• Have the dollar savings outperformed any change in sales demand and profits? OR Has the savings been off set by declining demand and merchandise performance?
• Which of the following will be impacted the most by an economic slowdown and leaner inventories:

• Exclusivity
• Newness
• Pricing structure/promotional strategy

• How to use net contribution to profit and demand driver information to improve merchandise category planning.
• What analysis approaches do catalogs use to determine category and item trends; page and depiction; price point analysis, etc?
• What major factors are the most important measures to analyze?
• How do you decide what products to repeat?
• Right brain-left brain: Challenges to implementing the quantitative approach in a culture often driven by “creative-driven” merchants.
• How can we increase new item development and performance?

Vendor Structure and Supply Chain

• Imports: Declining value of the dollar- how are others dealing with this?
  What direction has your company taken with regards to imports?
• Are you employing any different strategies with your vendors to improve performance or reduce costs?
• Discuss most effective tactics/forms of vendor assistance

• “Life-cycling” price breaks for downtrending, yet still-popular items
• Back-up inventory on new product introductions
• Negotiate solely on price
• Exclusivity arrangements

Multichannel Strategic Issues

• Given the growth of the Internet, what have you been doing successfully
  to forecast sales in this ever-changing business environment?
• How has your online store evolved, and how would you describe the strategic relationship between your print and web channels?
• What (if any) merchandising functions do you find the web especially effective in performing? Examples,
• Testing New Items
• Line Extensions
• Clearance/Liquidation

Merchandising the Internet channel

• How are you analyzing Internet merchandising results? From a merchandising perspective, how do Catalog sales differ from Internet and email product sales?
• How does it differ in terms of product? Price point? Off price orientation, etc?
• How are you planning and forecasting Internet activity from a Marketing perspective? From a Merchandising perspective?
• How does catalog sell differently from Internet (e.g. products, colors, etc)?

Clearance Strategies

• After Christmas merchandise sale pages (some print, mostly web)
• After Christmas Sale Digest (mostly print, some web)
• Online Store (almost entirely web, perhaps a post card announcing sale event/directing customers to the web)

Purchasing, Forecasting and Supply Chain Management

• What metrics should we be implementing to better manage inventory, improve customer service and profitability?  
• How to reduce back orders in the entire process of planning, forecasting and managing inventory?   
• Whether direct import or through a distributor much of the merchandise catalogs are featuring is imported.  All of this means less flexibility and longer lead times.  How are imports increasing stock levels and slowing turnover?  How are catalogs building this into their purchasing strategies? 
• With long lead times for design, product development and transportation, how do other catalogs read and react to catalog trends? (across seasons; pre-season catalogs to house file; advance season catalogs; wholesale gives advantage 3 months in advance possible best sellers)?
• Balancing inventory between channels – how do you decide who gets the inventory availability and service?  Consumer expects immediate shipment.
• How to find the right balance between inventory and customer service levels (initial customer order fill rates)?
• Being more proactive and aggressive to liquidate slow selling merchandise and overstocks.  How cost effective are various methods of liquidation?  How do you monitor results?
• Has anyone developed a model for cost of over stock? Model for cost of back orders?
• How accurate is your planning (order curve, revenue per catalog, etc.) and forecasting between Marketing and Merchandising, and Inventory Control?
• How is your purchasing team dealing with new issues in vendor compliance?
• How are you controlling inbound freight?  (e.g. routing guides, freight bill audits, consortiums, etc.).

Organization

• What information do Merchandising, Marketing Inventory Control and Operations share with each other? (sales plan, unit sales projection, weekly meeting between marketing and inventory control, etc.).
• Do your Merchandising and Marketing and Operations teams talk to each other?
• Do you have the right team?
• What skill sets do I need in my employees?

Contact Center, Fulfillment and IT

• Trends in fulfillment
• Improving capacity and throughput of the fulfillment center in the same space
• Labor quality and availability
• What should our service level standards be for our business?
• Shipping carriers, methods & S&H defraying costs
• What’s happening to your productivity?  How to improve your cost per order?
• Call Center –utilization comparison as e-commerce grows
• Returns continue to increase.  What programs have you implemented to keep returns in check? 
• Disaster Planning
• How prepared are you for disaster whether its fire, weather (e.g. snow, tornado, intense electrical storm) or business interruption (Longshoremen’s strike, virus, hackers, etc.)?  What’s your contingency plan if they stop operations?
• Should you look to outsourcing in the future?
• What technology and automation should we invest in?
• Information Technology

• What are your highest IT priorities and projects?
• Do you develop your own systems or use a commercial system?  Why?  What are the risks of being a beta site?
• What are your IT costs as a percent of net sales?  Join our FCBCO study.

What Will Your Catalog Business Look Like in 2013?

Given the bricks and mortar resurgence, accelerating e-commerce growth, challenges to the print channel and customer cross channel preferences, what will the retail landscape look like in five years.  The Forum participants and the experts will draw a blue print from the issues and solutions that we have discussed in the Forum.

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