What Sells Where?

You’d think that writing an article addressing methodologies to determine which products to feature on a Web site vs. a print catalog would be a no-brainer, right? Web pages are unlimited; printed pages are expensive real estate. It’s easy: Just put your best-sellers in the catalog and dump everything else you have in stock on your site. How difficult can that be?

Most Web sites feature the full assortment of products offered by a company, but exposure on a catalog page is a more deliberate decision. For Russ Gaitskill, president/CEO of the Garnet Hill home furnishings and apparel catalog, decisions for catalog products are based on potential, history and editorial agenda. Editorial agendas reflect the mission of your company and are set by management.

There’s also a methodology that can be used to analyze sales histories and illuminate a product’s potential in your catalog. Products with the greatest potential for strong sales in a catalog can be culled from your best-selling Web site products. To determine just what those products are, identify the products that contribute the following:

* greatest total dollar sales;

* greatest total unit sales; and

* greatest total gross profit margin.

A solid merchandise analysis will rank product sales all three ways. Then winners will emerge in the area where the products overlap on two or more lists. The best timing for the analysis is when a catalog cycle is 90 percent complete, and at the end of each month for Web site sales. This foolproof methodology will quickly identify suitable products to feature in other sales venues.

Compare Catalog, Web Sales

In another meaningful analysis, compare the ranked sales from your catalog to sales from your Web site. Just as you already have discovered that some products are on the top of all three lists, you’ll now see that many products will be best-sellers for both your catalog and your site.

A product that generates your greatest total dollar sales is clearly a best-seller; your merchants have nailed the sweet spot in terms of price, quality and desirability with a great product that resonates with customers. It also could be a product that’s underpriced (relative to the competition) and/or representative of a product category that should be expanded. These products are perceived as “great deals” by customers and build brand loyalty for your company. They’re also terrific choices for catalog covers and feature status on Web sites.

A product that achieves high total unit sales also is a best-seller and quite often a signature product for your company. The product may be a loss leader, but has proven to be an “evergreen” item that customers — new or old — will seek out and continue to buy from you. It’s particularly relevant when a high unit sales item draws significant numbers of new customers.

This could be extremely beneficial on the Web fueling successful paid search campaigns to capture new customers. Unit best-sellers often are worth building keyword search campaigns around. Unit best-sellers have great potential for private labeling success; as premiums in prospecting campaigns; and for identifying a product category ripe for expansion.
Top Gross Margin

The third type of best-seller, and the one often overlooked in routine sales analyses, is the product that brings in the greatest gross profit margin. You may only sell a few of these items, but they’re typically unique products that can’t easily be found at competitors’ Web sites or catalogs. Your merchants have taken a risk here and are testing new product ideas and price points in an effort to expand product offers and to capture a bigger portion of the customer’s pocketbook.

Whether your company has separate, independent merchandising teams for Web and catalog or has a single executive managing both, the best-seller analysis from the two sales venues can help grow each business. The analysis provides product information and sales history data from real customers who already consider your company a trusted merchant.

A good example might be using your Web site best-seller reports to expand or shrink categories in your catalog. A “tried and proven” Web product becomes a great candidate for your next catalog — a lot of the risk has been removed already.

Sidney Bakke, a veteran buyer for The Smithsonian Catalogue, points out that in some instances, the Smithsonian will feature a collection of its books or licensed products on its Web site. Most likely, only three or four of the products will have sufficient online sales to make it into a future catalog.

The methodology used in Smithsonian’s decision-making process clearly is based on sales demand.

Best-seller analyses are extremely useful reports. They help take the “guesswork” out of merchandising decisions and help identify the potential of a product in a different sales venue.

These analyses should be performed several times a year, especially during the planning stages of a new catalog and prior to your company’s attendance at industry trade shows.

They can be structured to rank products by individual product category or to rank the entire product mix. They’re indispensable tools for anyone with merchandising responsibilities.

Shari Altman is president of Altman Dedicated Direct, a direct marketing consultancy specializing in acquisition, continuity, DRTV and loyalty marketing. Reach her at (336) 969-9538 or saltman@altmandedicateddirect.com. Susan Bates is senior merchandising consultant at Susan Bates Consulting and can be reached at sbates@altmandedicateddirect.com.