For Retailers: Planning your Stores to fit your Customers' Needs

You are CEO of a retail chain that consists of 50 clothing stores. Your sales were great the first five years of operation, but they have leveled off during the past two years. This concerns you, so you begin to look at various reports to determine if there is anything you can do to boost sales. Upon analyzing the reports, you find out that your Florida stores are not doing very well in coats and outerwear. However, they are doing exceptionally well in sportswear. In looking at your stores in New York, you see that outer wear is doing great, but sandals and other open toe shoes are not selling. These are definitely opportunities. What should you do?

The answer to this question is simple. You should engage in micromarketing and use the information gathered to plan your assortment by store effectively. In today’s retail environment, there are many different types of customer. There used to be a time when every store in a chain received the same merchandise regardless of location or customer preference. This is the scenario presented above. Location is not the only thing that should be considered when planning assortments, but income levels, ethnicity, age, and work status should also be considered.

For example, a twenty something college graduate will have more of a taste for trendy, “brand” oriented clothing than a senior citizen. By gathering customer information, retailers can start to develop a demographic of their local customer base. This will allow them to meet customer needs must better and faster. There is also an added benefit to this in that inventory can become more targeted. This should improve turns and decrease markdowns, which in turn will lead to profits. Now this is something I know all retailers love!

“How can I get this information?” is a question that is commonly asked by retailers. There are a number of ways. To get the best information, you should combine them all. First and foremost, you should ask your customer for it. Tell them you want to serve them better and ask them to fill out a survey. Each store can do this. There are also various data warehousing systems that can be purchased. They collect information what items are being purchased and when they are being purchased. This is a very effective tool for determining assortments. Lastly, use the vendors you buy merchandise from. They have stored up tons of information the types of customers that buy their merchandise, where the live, etc. It is in their best interest to help you be successful.

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