Kevin Hillstrom: MineThatData

Customer-Based Merchandise Assortments

This might come as a surprise to some of you, but your customers don't universally love everything you sell.

Every customer has a favorite merchandise division/department/category. This "favorite" division/department/category dictates what you should show the customer in the future.

Example: A Women's Apparel customer (favorite historical division) will spend 48% of future demand on Women's Apparel (your mileage will vary). The second-highest division generates just 12% of future demand, the third-highest division generates just 8% of future demand. This customer should see Women's Apparel, obviously. The marketer needs to be disciplined with this customer.

Example: A Home customer (favorite historical division) will spend 8% of future demand on Home merchandise, with three divisions/departments/categories showing significantly higher future shares of merchandise purchased. Guess what? This customer needs to be cross-shopped. The marketer can be creative with this customer.

Each customer essentially warrants a customer-based merchandise assortment.

Do you think about your customers in this manner?

American Top 40

No, not the Ryan Seacrest version in 2026. I'm talking about the Casey Kasem version from the 1970s and early 1980s.

You can hear the old reruns on the 70s channel on SiriusXM.

In my case, I could hear the show from 3pm - 7pm on Sunday afternoon on WQTC, and if I missed anything I could hear it again from 6pm - 10pm on Sunday evening on WIXX in Green Bay.

I once told a client that they should have a Top 40 list for their best forty items, promoted via email marketing. Make it a weekly event. The Marketing Executive had a typically snide remark.

"Yeah, that's what we want to do. We want to tell our competition what our best selling items are."

Of course, this company sent a pair of clearance/liquidation emails a week. The Marketing Lemonhead had no issue whatsoever telling the competition what didn't work.

If you don't want to communicate your best sellers, create your own opaque criteria like they did on the old American Top 40 Shows.

Average Rank of Sales, Units, and Conversion Rate, for instance.

Start you email week with your Top 40 items according to this criteria. Share it on Instagram, Facebook, you name it. Have one of your merchants feature the top five items on a brief video on TikTok. Have a pregame show on YouTube where two in-house marketing influencers predict what will happen. Have the pregame show hosts read an email, a long-distance dedication of sorts.

I realize none of you will do this.

But somebody should do this.

Eventually, You'll Call The Plumber

In our modern world, we like to think we can solve any problem without added expense. The kids on YouTube call it a "hack".

For instance, we have a minor plumbing problem. In our bathroom sink, sediment sits on top of the aerator, reducing the flow of water to a trickle. Do I want to call a plumber? No! I'm sure there is a hack out there to solve the problem.

You search YouTube and Reddit. There is always some guy named @bigideas47 who says "trust me". If you can't get the aerator off because it has been fused into the threads by calcium buildup (and with that little locking device, no, you cannot get it off), you just need to soak the aerator with CLR or vinegar via the following contraption.

"Trust me, works every time" says @bigideas47.

It does not work every time.

YouTubers with names like @problemsolver5G offer solutions like needle nosed plyers or WD40.

Phrases like "impossibly simple hack that actually works" pepper the screen images of the YouTube videos.

Turns out, it does not work.

You eventually punch through the aerator to get water flowing ... and then you realize the importance of an aerator in a modern bathroom.

You know what you do next?

You call a plumber.

There's a reason why @bigideas47 and @problemsolver5G populate Reddit and YouTube with ideas ... they're not actual plumbers.

It's the same way in marketing. Except the folks with the hacks populate LinkedIn.

Marketing is teeming with Lemonheads that have hacks and fake solutions to real problems.

If you have actual problems ... and most companies have actual problems, you can't solve actual problems with hacks from third parties. Better paper stock doesn't solve a problem. Digital engagement doesn't solve a problem. You need smart people who implement actual solutions.

Eventually, you'll call the plumber.

Uncontested

I'm watching the Badgers Men's Basketball team blow the absolute doors off of (checks notes) conference rival Washington.

The announcer asks the color commentator an interesting question.

Announcer: "Why does Wisconsin shoot so many three pointers from so far beyond the three point arc?"
Commentator: "The further away from the three point line the shot happens, the less likely it is that the shot will be contested."

In other words, if the shot happens from 26 feet away, there won't be a hand in the face of the shooter.

This attempt was good, for instance.

That's where your business comes into play. If you are selling Coach handbags, selling is "contested". Yeah. You can buy the handbag from Coach. Or Coach Outlet. You can buy it from Saks. Or Dillards. Or Macy's. Or Nordstrom. You can buy a handbag from Coach on Amazon. The odds of making the sale go down the more hands there are in your face!

If your business is north of $50,000,000 in annual sales, you should probably have an employee in the marketing department who designs an "offense" (i.e. marketing plan) that differentiates your company sufficiently so there aren't "hands in your face" when you attempt to sell something to the customer.

You want your sales "uncontested".

Right?

Some Things Don't Change

Here's the first attempt at a McDonald's Happy Meal, circa 1975.

Notice the quote "at regular prices". Eventually, there wouldn't be "regular prices". Read a Lands' End email campaign for examples. The world shifted to discounts / promotions.

Yesterday I talked about how everything changes.

Everything, that is, except for discounts and promotions.

Have you ever analyzed how different customers behave?

Customer spends $100 at 40% off for a net of $60, gross margin dollars = $25.
Customer spends $60 at full price for a net of $60, gross margin dollars = $39.

Which customer would you prefer?

You need nearly 1.6 times as many orders via discounts/promotions to equal the full-priced order in this example. That's a lot of frosting on the cake, don't you think?

One of our absolutely smart readers mentioned how there is a dynamic in business where net sales grow but profit is unchanged. This dynamic happens in inflationary times, obviously. It also happens when the marketing wonks decide to eat into every available dollar of gross margin by offering 40% or 60% off to boost response. You boost response, you harm gross margin dollars.

Some things don't change.