The Wall Street Journal published a story this week about Macy’s, which focuses mostly only the perceived impact that an omni-channel strategy is having on their business, going forward. It’s worth reading here. (subscription required)
What struck me in this story is the twist on the concept of localization.
Most of my conversations with ecommerce folks, in which “localization” comes up, the subject is a reference to localizing a web site to a country. And, of course, the resulting need for translation, alternate payment processing methods, separating inventory, separating marketing campaigns. All to be expected.
What Macy’s professes to recognizing is that a store in Fairfax, Virginia (where I live) may demand a different inventory and different marketing than a store in Dallas, Texas.
Now, we’ve all recognized those type of differences — up to a point.
But with the tools available to us now, we can buy uniquely for each store, vary marketing by micro-segment, and attempt to match available inventory (and by extension our merchandising & buying tactics) to these clearly identifiable segments.
But where is the balance … can we focus one segments that are so small, we cannot manage to them profitably? And if that’s true, then what is the smallest segment we should isolate to maximize profitability?
A whole new form of optimization!
