Best Buy and B&H Multichannel Marketing

At ACCM, I heard a half dozen speakers drill the multichannel marketing script into the permeable heads of honorable conference attendees.

So today I am looking to purchase a camcorder. B&H sends me a catalog, a nice multichannel piece. So nice that it drives me to Best Buy to physically look at the camcorder. There, I find another camcorder I like. I notice that the price of this item appears expensive.

I go home, look at the Best Buy website, and see that the price is consistent between stores and online. Multichannel advocates rejoice! But the camcorder is still expensive. A price comparison reveals that the item is 20% cheaper at B&H, and 25% cheaper at Amazon.com.

The item will be purchased at Amazon.com.

Industry leadership continues to harp on the fact that multichannel marketing works. And today, it did work. A catalog from one brand led to a store visit at another brand, which led to an online search for the cheapest price, leading me to buy the camcorder from an online pureplay. Demand siphons out of the multichannel value chain, into an online pureplay. The multichannel marketers pay the freight for retail square footage and paper-based marketing, but lose the sale to a low-cost online pureplay that does not execute traditional advertising strategies.

An entire industry is missing the point of multichannel marketing. Pretty catalogs, integrated e-mail campaigns, and cross-channel inventory alignment is nice.

But multichannel marketing is pure pap, feckless when confronted by convenience, fast shipping, and cheap prices.

And worst of all, the multichannel industry fuels this trend by advertising the items that ultimately are purchased at pureplays that don't employ traditional advertising.

Woo-hoo!


Aside: A Best Buy employee told a customer that he wanted to take her television outside to her car because it was too hot inside the building. She asked the employee why they couldn't turn on air conditioning. He said they couldn't because climate control was manned from Minneapolis. If that story is true, then Best Buy management is really knocking down some silos, huh folks?!!

B&H Catalog, Creating Demand

The perfect-bound, 420 page B&H Photo/Video catalog arrived in my mailbox this afternoon. You'd be set back about $2,000,000 if you purchased every item in this catalog.

This "resource" catalog, as it used to be known in the industry, is part of a dying breed. As recently as the 1970s, 500 page perfect-bound catalogs were mailed often, carrying a huge assortment of merchandise. I never knew that there were computerized chess games until Montgomery Wards and J.C. Penney told me so.

B&H uses this style of advertising to tell customers about merchandise that the customer never knew existed. I had no idea there was such a thing as a 5-channel portable field mixer. I had no idea these things could be a few thousand dollars.

Catalog marketing used to be great at "creating demand". Catalogs educated the customer, they taught the customer why she had to have a 5-channel portable field mixer.

But then catalogers figured out how to mail targeted 124 page catalogs, with a limited assortment, to an audience that liked only the targeted product in the catalog.

And then marketers figured out how to put all of this merchandise up on a website. They figured out how to send electronic mail messages to customers. So did deposed leaders in Africa.

And then Google turned everything upside down. For a fee, Google could intercept the customer at the very moment s/he was considering the purchase of a 5-channel portable field mixer. You'll notice B&H in the paid search results of this query.

All of this is wonderful for the customer. Absolutely wonderful.

Except for one little problem.

Over the next ten years, catalogs may become obsolete. It is very likely that the USPS will make it it impractical to send paper through the mail. Baby Boomers may focus less on consumption, may focus more on retirement. Boomer kids will have spent their formative years in a Web 2.0 or Web 3.0 or a Web 26.7 world that doesn't rely on paper.

When catalogs become obsolete, how will you ever learn that you want/need a 5-channel portable field mixer? Is Google going to be able to read your thoughts? How good a job does Amazon do at guessing what you might like?

Web Analysts need to start analyzing customer behavior over time. Online Merchants need to figure out how to make us aware of merchandise we never knew existed, but if we knew it existed, we'd want to purchase. When Online Merchants figure out how to do this, we can put catalog marketing to rest. Online Merchants will eventually figure out an effective way to do this. Today's method of "customers who like 'x' also liked these eight items" fails to capture the imagination of the consumer.

Time for your thoughts, especially those of you who are Online Merchants. How will you create demand for items that the customer will purchase, but doesn't even know exist in your merchandise assortment?