If you live in McAllen, Texas (pictured here, circa the 1950s, courtesy of Cezar Del Valle of Theater Posts) and you are female, odds are you are a plus size woman, as 38.8% of the female population there is overweight. But if you live in Boulder, Colorado, the chances swing the other way. Only 12.1% of their population is overweight. Keep these facts in mind as you read the remainder of this post. There just may be a test at the end.
Businesses spend about $150/user/month on Customer Relationship Management (CRM). Sixty-one percent spend over $50 per month per user. It should come as no surprise then that most retailers are connected to their customers almost to the point of being creepy. They can quote traffic, transactions and conversions with ease. Marketing teams live and die by CRM-driven campaigns.
So why is it that so many retailers never seem to have the right sizes in the right stores?
Let’s head back to McAllen, Texas for a minute. If I live in McAllen, I want to shop locally to support my hometown stores. So, I make the trek down to my local specialty retailer to buy something nice for the town dance this weekend. You can imagine my disappointment when I arrive at my favorite store only to find that all the dresses in my size are gone. All that remain are pretty little dresses that all the sales clerk knows will never fit me. Sadly, I know it too.
A Real Life Story
Yes, this is an extreme example. But a few years ago, before I lost over 50 pounds, I lived in a world where there were stores I wouldn’t even walk into. I just instinctively knew that “I can’t shop there”. Still, one day, my husband encouraged me (strongly) to go into a shop that I knew had nothing that would ever fit me. I can still remember hearing him speaking with the sales clerk outside the fitting room. He asked her why they didn’t sell larger sizes, since most of the women in that area were close to my size. The clerk replied that she guessed she should just call the designer and tell him to make clothes for fat women.
My face immediately turned red, and I left. Even now, all these years later, I still feel the heat of embarrassment walking past the door of that retailer.
The Magic 8-Ball
If only retailers had a magic 8-ball that could tell their buyers which sizes to buy. Wouldn’t allocators love a “cheat sheet” to help them decide which products to send to each store? Can you imagine how happy shoppers would be to see their sizes on the shelves? Can you imagine how happy your executives would be when you increase inventory productivity? What about decreasing markdowns? Oh, how Monday morning review meetings could be so very different, if only you had that magic ball.
But wait, didn’t we just say that 61% of all businesses have invested in CRM software? Where is the disconnect?
Traditionally, assortment planning and allocation processes are driven by historical trends. CRM, on the other hand, is typically used only for promotional planning. This clear division of information often leaves CRM data – a merchant’s gold mine – waiting to be discovered.
To create store clusters, most retailers look at units sold, sales per square foot, and even total dollars sold. This practice of store grading is used to combine similar stores and thus make it easier to manage the flow of products and inventory to those stores. Sometimes merchants might even look at markdowns and lost sales. But rarely do they grade their stores based on metrics like customer buying behaviors.
CRM: Try Something a Little Different
CRM captures metrics that can be used to help you fine-tune your assortment and allocation processes. Heat maps — by both size and location — can allow you to drill down into what is selling where. That information can then be used to personalize the selection offered in your stores according to each store’s customer mix. Even at a high level, adding size to your grading calculations could help focus your store clusters and produce a more meaningful distribution of goods.
Oh, and I have not forgotten about those ladies of Boulder, Colorado. They struggle with the very same issues as the women of McAllen, Texas. Any time a customer walks into a store she should feel like it was stocked just for her. We need to use the tools we have, even in unconventional ways, to provide every individual customer with the best experience possible.
Image courtesy of Cezar Del Valle of Theater Posts.
If you would like to learn more about how Aptos clients are using CRM and Analytics to change how your buyers buy contact Victoria at VMoore@aptos.com.