MBA has disrupted the retail industry in a major way. According to a study carried out by the FactPoint Group, a Silicon Valley research and consulting firm, more than 50 retailers with revenues from $400 million to $24 billion, were “familiar” with MBA and were “looking to extend their capabilities” in that area. What MBA brings to the table includes quite an impressive array of qualities that most “non-MBA enabled” companies would be challenged to achieve – increase in order size and order value, improved customer service and product availability, increased sales, more customers, better customer retention, smart enterprise, and much more.

Every item in your store is linked to other items. "It is quite an amazing web of connectivity"

Understanding  Your Product Affinities is Core to your business

Every retailer wants to leverage the true value of brand identity and promotions. It is hardly surprising that without proper MBA, you run the risk of eliminating one product from “Jack and Jill” items.  With hundreds and thousands of items, without the right tools it is challenging to  quickly see the product affinities.   There are numerous examples of supermarkets pruning products only to receive a flood of calls from customers.  How can  I make greek salad without feta??

At the category level, the affinities can unravel how price fluctuations on one item in a category can change the dynamics of the entire shopping basket. For example cigarettes prices are constantly fluctuating, usually on the rise.  In convenience store chains the fluctuations will impact all categories with strong affinities with the cigarette category. A customer walking in with a $20, will have less to spend on other items if he buys tobacco products. So - what items are those typically?  What items will see a sales drop as tobacco price increases?

Understanding the product affinities is core to assortment planning, merchandising, product availability and customer service.  Every item in the store is linked to other items. “It is quite an amazing web of connectivity”,  quoting Roy Marsten.  Emcien’s analytics unlocks that product affinity web, and presents the entire list of affinities so it’s easy to understand and drive business decisions.

This intelligence is key to driving successful retail decisions.

Your Products Are Connected!: Understanding how your products are connected in the ‘eyes of your customer’ is key to increasing sales.  Every product has an average basket size and a  list of items is is typically bought with.   This of course can change with seasonality, promotions, price fluctuations, etc.   Ranking your products on these metrics will present the best items for promotions to increase total sales.

Cross selling and up selling: Merchants go to great lengths in assembling cross-product promotions with signage, proper training, etc. If you are a home improvement retailer, you’d want to sell your services along with appropriate furniture and installation. Studying the affinities reveals whether your primary merchandising is consistent with the related cross selling. Measure the sales rate of the primary product as well as the “supporting” products.

Value your customers: Customer is always the king (or queen!). As a retailer in women’s clothing, you’d want to know what percentage of your customer’s transactions included a particular item. After this, you need to identify the value proposition of the merchandise. You can also expand your analytics across geographies and time periods, and measure the buying patterns of your customers.

Repeat business (Loyalty): Calculate the frequency with which your customers arrive at your establishment(s). Connecting the loyalty programs to affinity analysis can dramatically increase the success of your loyalty programs. From the frequency, you can identify their purchasing trends, “eyeballing” trends, consistency in purchasing a particular brand, store visit patterns, and the right space to place and promote your merchandise.

Brand and lifestyle: You can calculate brand loyalty based on shopping behavior. Whether your customers are buying high-end products or in-house products, the insights you get will help you align your brand strategy to your customers.

To sum it all, understanding what Market Basket Analysis can do for you is not rocket science, and you need not be an Ivy League graduate to comprehend its dynamics. It all boils down to listening to your most prized assets – your customers, their transactions, and formulating a comprehensive roadmap to incorporate the right analytics tools.

SPRichards’ Advantage Business Conference (ABC) in Miami

Apart from being lots of fun, the conference was great learning venue. With thousands of dealers and manufacturers, the key questions revolved around “How do we sell more to our customers, increase customer service and profits!”

S.P. Richards works hard to make their dealers successful. Their latest value-add is automated up-sell/ cross sell capabilities on their ecommerce web site. This capability is very powerful and could not come soon enough for the dealers. Many of them expressed their views. Here are a few:

- If we can sell on more item to a customer, who is already buying from us, the impact on sales is dramatic. (Quoting verbatim – “it’s a no-brainer!”)

- My customers want me to suggest relevant items that they can buy, while I have them on the phone! I want every sales rep to have that capability.

- It is so much easier to sell more to existing customers than to try to get new ones. So we embrace all the help we can get to service our existing customers better.

All the manufacturers agreed with this view because it’s a win-win if the dealers can sell more and more efficiently. The list of dealers at the conference was very impressive…including companies like ReStockit, Village Office supply and GiveSomethingBack.

Congratulations SPRichards! A great 2010 conference. Look forward to attending next year!

About S.P. Richards Company -

S.P. Richards Company, one of North America’s leading business products wholesalers, distributes over 30,000 business products to a network of over 7,000 resellers in the United States and Canada from a network of 44 Distribution Centers.  S.P. Richards Company is a wholly-owned subsidiary of Genuine Parts Company, (GPC:NYSE)

Suggestive Selling: The Best Way to Increase Order Size

Developing online trust and enhancing a visitor’s shopping experience might gear visitors toward a particular website. However, attracting traffic and converting them into customers is not sufficient. You have to focus on increasing the order size to drastically improve sales. The most effective way to achieve results is suggestive selling.

Increase Order Size By Suggesting Highly Relevant Items

Although suggestive selling or up sell/cross sell is greatly dependent on the products being sold, the following are some tips that can improve e-commerce sales:

Positioning of up sells and cross sells: Place up sell and cross sell offers in as many product pages as possible. While big merchants will be at an advantage in this regard (since they have a larger inventory), smaller merchants have to exploit every single opportunity to increase order size. However, placing suggestions at strategic points is crucial. Remember that you want to:
• Firstly, educate the visitor about every related item available
• Secondly, inform them about the depth of your collection

Trust impulse sales at the last minute: The E-Tailing Group survey states that 38% of all e-commerce websites place up sells in the check-out page, which the customer visits after putting all items in the shopping cart. Placing seductive offers in this page works wonders. However, there are a few rules to be remembered:

• Offer a variety of price points
• Low-dollar products make for more probable impulse purchases
• Ensure that the most relevant items are offered, for example, a shirt or belt with pants

Include up sell and cross sell offers in post-order e-mails: Inclusion of additional products in all customer e-mails can boost sales significantly. Many e-commerce websites do not follow this strategy, believing that goading customers into purchasing products reduces purchase scope. However, this tactic cannot be termed as ‘goading’ since the recipient is a customer who has previously purchased from your website. Therefore, including cross sells in support or product enquiry e-mail replies and post-order e-mails is a practical solution.

Not more than three products supplementing each purchase item: The old saying ‘less is more’ proves true in this regard. Overwhelming customers with too many offers is not a good idea. To catch a shopper’s attention, there should be an average of three cross sell suggestions.

Category-bundle techniques: Package deals are one of the newest trends in e-commerce. Follow the brick-and-mortar store technique and position complementary products in such a way that consumers feel that buying the entire ensemble will serve their needs. This can be done with all items - plumbing products, electrical products, auto parts, office products, furniture, sports gears and so on.

In addition to this, you can consider hosting automated expert recommendations based on customer buying patterns and trends. This has great potential when it comes to raising sales.  Automated suggestive selling ensures that the suggestions are always up to date! This is key as retailers today offer hundreds of thousands of items that are constantly changing. Manual methods for updating complementary products are just not feasible.

Grow Your Business with Value Upsell and Cross-sell Strategies

Gearing traffic to your website can prove quite difficult, and converting even two-thirds of the visitors into customers can be a challenging task in itself. Most e-commerce conversion rates fall between 2% and 3%, unless you are selling at Amazon (9.6%) or at Proflowers (14.1%)! Therefore, when you manage a hard-fought victory, capitalize on it through aggressive upselling and cross-selling strategies.

Benefits of Upsell and Cross-sell

When a customer enters a shop searching for a specific product, a salesman comes to their aid, provides them whatever they need while suggesting alternatives and complementary products. Perceptive suggestions by the salesperson enhance the store’s image in the eyes of the customer, since it reflects a level of thoughtfulness on the part of the store. Suggestive selling online can serve as a practical method of increasing profits.

Cross-selling and upselling have great value for e-commerce as well, since they increase:

• Average order value
• Conversion rates, since they guide consumers to select appropriate alternatives in case they are looking at the wrong product or one that does not complement the product in the shopping cart
• Exposure to high margin products
• Customer satisfaction through the recommendation of related products that will supplement the product as well as the user’s experience
• Deeper awareness about the product you are offering

Upsell and Cross-sell: Tips and Tricks

The following are certain ideas that would definitely improve your opportunity to upsell and cross-sell:

Suggest the obvious: Several cross-selling and upselling opportunities arise all by themselves. For instance, if you are offering tennis racquets, suggesting balls, bags and other tennis accessories is natural. You can also consider mentioning a few other related products and services that you provide.

Relevant suggestive selling works wonders: Overloading customers with unrelated suggestions can only serve to exasperate them and hamper purchase scope. If not immediately purchased, it will definitely eliminate chances of developing a recurrent clientele. Therefore, product suggestions should be as closely related as possible.

Expert recommendations help: Another way to facilitate upselling and cross-selling is by offering recommendations by professionals, field experts and customers. This could be anything – from a chef’s suggestion on a particular menu to a doctor’s recommendation on drugs. This is a strategy followed by Amazon.com.

Timing is crucial: The best time to cross-sell or upsell is when the customer is trying out some item. For instance, if the customer is looking for a low-priced camera and seems disappointed with a particular model’s features, the person may not mind buying a higher-priced model with more advanced features. Or, suggesting a belt when the customer is trying on a pair of trousers is quite fitting.

Offer products of a different price range: The supplementary product suggestions should be across a varied price range. If three items have been suggested, it is crucial that all three offer a welcome mix of different price points. Most often, the item that costs the least will be chosen. However, it will leave a good impression in the minds of the customers, increasing the chances of future sales from the same client.

The secret to successful cross-sells and upsells is complete focus on customer needs and requirements, instead of concentrating on increasing sale. As they say, Take care of the pennies and the pounds will take care of themselves.

In the hard goods industry, purchases are need based. Customers buy items for their job and projects.

When a customer comes to the checkout counter, the counter man can look at what is being purchased and recommend other items that the customer might want to purchase. Not all of these recommendations will be accepted, but those that are represent additional revenue. The recommendations that are made depend on the sales person’s knowledge of the products and experience on how they are used. The profit margin on suggested items, when they are bought is very high, because you are leveraging a customer who is already in your store!

Suggestive Selling is a Recession Buster!!

In a virtual environment such as a web-store, there is software that monitors what is being placed in the “shopping cart” and make recommendations based on the individual items or on collections of items. As in the real store, a few of these recommendations will be accepted. But the net effect will be to increase the average number of items in a shopping cart, and therefore revenue.

You might be wondering how software can make these recommendations. It is accomplished by analyzing earlier sales and discovering what items are typically bought together.   Emcien’s analytics on the sales data will reveal items that are bought together for the job. For example – 90% of the times item A is bought with item B and C.  If you know the items that go together (for a job), why not make suggestions to the customer? This shows that you know how customers use your products; it improves customer service and increases sales. A win-win all the way through!

Distributors typically sell tens of thousands of unique items across hundreds of thousands of transactions. Emcien’s analytics quickly reveals customer buying behavior and trends that every distributor can utilize to increase sales. When suggestive selling is based on actual buying patterns, the suggestions are more plausible, and customers trust them. It is very believable when you can say “ 90% of the times this ballast is bought with this lamp and mounting.” These recommendations are sensible, simply because they are based on the actual buying behavior of your customers. Emcien’s analytics can simulate the years of experience that’s normally accumulated by working in a store for years. I need to point out that sensible recommendations are critical because irrelevant recommendations annoy customers and may reduce sales.

To illustrate the potential of suggestive selling, here are some actual numbers.  ACME hardware store carries 41,155 unique items. An analysis of 232,500 orders showed that 61% of these orders would result in at least one additional recommendation. When the store implemented the suggestive selling, sales increased by 3% in the first 4 months.

Product recommendations have been used very effectively by Amazon and reported to increase sales by up to 30%. Surprised? Here is the impact to your business - Adding one more item to 10% of the orders can increase sales by 5%!

How much money are you leaving on the table because you are not leveraging suggestive selling for your products? Would you like to know?

]]> http://blog.emcien.com/2010/06/how-suggestive-selling-can-increase-sales/feed/ http://blog.emcien.com/2010/06/how-suggestive-selling-can-increase-sales/ http://feedproxy.google.com/~r/Skued/~3/Mgvc0NnOBN4/ http://blog.emcien.com/2010/04/assortment-planning-and-up-selling-based-on-%e2%80%9cthis-sells-with-that%e2%80%9d/#comments Thu, 08 Apr 2010 17:05:42 +0000 John Maller http://blog.emcien.com/?p=1127 Walmart’s (formerly Wal-Mart) announcement of a SKU rationalization project contained in this year’s 10-K filing with the Securities and Exchange Commission confirms the importance of this initiative for all retailers. In SKU (Stock Keeping Unit) rationalization, a retailer examines the profitability of items and vendors as a whole. When done in a linear fashion it results in lost sales and bringing back the SKUs.

SKU rationalization projects look for “What items are bought together” so that retailers and distributors can improve assortment planning. As shoppers, we all know that we buy items in groups. It is the job of the retailer to figure out what kind of stuff we buy together, so that they can optimize their assortment planning. Simple example - If I cannot buy both bagels and cream-cheese at the same time, I will go to a store where I can find it!

SKU Classification Based on Frequency of buys and Product Relationships

SKU analysis for assortment planning is based on two key metrics:

These two metrics also apply for Amazon-esque suggestive selling for online sales. Items that have high correlation with other items are candidates for suggestive selling, up-selling, cross-selling and add-ons. For example, this would be a way to detect that cables, cartridges and paper that are bought with a particular printer. So when that printer is bought, you can automatically suggest the other items as add-ons.  (Not to get too technical here, but the suggestions are not symmetrical. So - you cannot suggest a printer when a customer buys paper!)

The implications of these product relationships cannot be emphasized enough on your merchandising strategy and your supply chain planning. Manufacturers, distributors and retailers struggle to manage thousands of SKUs.  This SKU classification presents a methodical approach for assortment planning to maintain the most profitable portfolio.

SKU Categorization For Merchandising, Up selling and Cross selling

The second chart presents a more detailed discussion of the SKUs based on frequency of buys and affinity with other products. (Affinity simply means “this items sells with that”. )

I - Items that have low-frequency/ high correlation are important to detect.  These are trouble-maker SKUs. As companies goes though SKU rationalization projects, these items often end up on the chopping block, only to brought back again because they caused lost sales.  These items are difficult to identify and there is a need for sophisticated analytics to easily identify these items.

II - Items that are bought in high quantities, but always with other items are great candidates for merchandising and bundling.  They are a natural for creating sales lift and revenue lift.  It is often counter-intuitive, but your #1 top seller may not be in the  #1 pair of top selling items. That is why linear analysis of the SKUs based on volume or frequency results in incorrect merchandising.

III - The low frequency/ low correlation items are the targets for SKU rationalization projects. However, these items are very difficult to identify. Hence SKU projects typically end up cutting the wrong SKUs.  We call these items Low-Loners. If you are a distributor, you do not want to carry these items. They are perfect candidates for drop-ship.

IV - Items that sell in high frequency, but usually on their own, require high service levels.  We call these Hi-Loners. Examples of these items are cigarettes and gas at a convenience store.  And by the way, beer also falls in this category.  And please do not believe the beer and diapers myth!  It is a myth!

The challenge with SKU management is that companies make decisions based on product relationships from hear-say,  industry veterans or tribal knowledge. I think that’s how the beer-diapers myth was started!  Across thousands of SKUS, and with fast changing demand patterns, this results in errors, and not a sustainable process for assortment planning and SKU management.  There is too much at stake to base a companies sales and revenue on hear-say.

As SKU management is getting a lot of attention, there is need for robust solutions based on real customer buying behavior, to help companies maintain their SKUs on an continuous basis.  The value is high sales, higher margins and improved customer service.

There are a few “seed items” in the store that drive additional sales because of key concept ‘this is often bought with that’. These items are often found together in customer baskets and orders. Smart retailers will put these items as far away as possible, so that you have to walk through more aisles to get from one item to the other, in hope that you will buy more along the way. Bread and milk is a good example of that. The reverse is also true. For items that are often bought together, if the store does not carry both, they will lose the customer.

Every retailer knows that it is very profitable when a customer comes in to buy one item, but ends up with many more in his basket. Understanding the product relationships in the market basket is key to driving up the order size or basket size.

Understanding the Customer basket make-up

A retailer typically carries thousands of items. A small convenience store may carry 1,500 items. A grocery store typically carries 15,000. And the super stores like Wal-Mart and Targets carry well over 25,000 SKUs in each store.

Insight Into Customer Baskets and Product Relationships Based on Buying Behavior

The SKU management is a tremendous challenge because the buying pattern is truly a long tail. Retailers know their top sellers; these are easy to identify, but the frequency of buying falls of very sharply. The chart shows an example of one retail store operation over a 3-month period. The store carries 25,000 SKUs, has 100,000 transactions per month. The analysis covers a 3-month period, and shows the distribution and popularity of SKUs based on the frequency of purchase.

Here are some quick stats for insight into the baskets and buying behavior - The most popular SKU has a frequency of 3,435. That means is has been bought in 3,435 baskets. The frequency of the 100th most popular item drops off to 225. That means it is only in 225 baskets over the 3-month period. There are 4,000 SKUs that are bought only once. But the really interesting fact is that 1,800 SKUs are bought together 98% of the times. None of these 1,800 SKUs are top sellers! But when they are purchased, they are very often paired with other items. This intelligence is key to increasing basket size and ensuring the store is carrying the right items. SKU rationalization analyses that view each SKU as an independent item, that is bought in isolation, will result in incorrect merchandising and lost sales.

There basket analysis also showed the low-frequency/high-correlation SKUs. Every retailer knows the challenge with these items. These items sell rarely, they sit on the shelf for along time, and when it is placed in a basket it will only sell if the paired item is available! These are problem SKUs because they are capital hogs and always show up in inventory issues.

Insight into the basket make-up and the product affinities based on buying behavior is key to merchandising and increasing order size. Merchandizing, up selling, cross selling and add-ons based on buying behavior results in increased sales and enhanced customer experience. On the other hand, suggestive selling based on tribal knowledge and ‘he said/she said anecdotes’ will result in poor results and loss of customer good will.

Adding one more item to 10% of the baskets can increase sales by 5%

Sales Impact Of Increasing order size

The basket size or order size analysis shows the revenue potential of increasing the order size. The chart shows a typical basket size analysis and the upside opportunity of increasing order size. The results from this case study showed that adding one more item to 10% of the baskets can increase sales by 5%.

Manufacturers, distributors and retailers offer thousands of products. There is a significant opportunity to increase sales across all channels with knowledge of product relationships (what items sell together), when and where. It is commonly agreed that B2B purchase behavior is “need based” while a large percentage of B2C sales is emotion based. Hence, in B2B commerce, the product relationships have to be highly accurate to be relevant.

Quick review of definitions:

Frequency – Number of orders that contain this item
Volume – Number of items sold.
The volume of an item may be high because one customer bought a lot. However, frequency is better measure of popularity and is not skewed by a one-time large volume sale. In fact, SKU analyses will often remove large volume buyers to reduce this bias.

SKU Rationalization Demands Market Basket Analysis (a.k.a Customer Buying Patterns)

Wal-Mart Stores Inc., the world’s biggest retailer, is bringing back some products it had removed from shelves last year as shoppers turn to competitors for a wider selection of merchandise. A failed SKU rationalization effort?

The company met with suppliers about reinstating items to keep customers from going to other stores, said Leon Nicholas, a director at consulting firm Kantar Retail who has spoken with manufacturers about the move.

Wal-Mart is telling suppliers it cut too much in some areas and wants to bring some items back, Smith said. The retailer is noticing that consumers are visiting other stores and no longer going to Wal-Mart for everything they buy, he said.

“I’m learning this from my suppliers who were down to one SKU in the store,” said Smith, who helps vendors hire account managers and other representatives to call on Wal-Mart merchants. “Now they’ve got a seat back at the table.”

Sales at Wal-Mart’s U.S. stores open at least a year declined 1.6 percent in the fourth quarter, more than its forecast of a sales decline of no more than 1 percent. Declining store traffic reflected disruptions caused by store remodeling, Wal-Mart Chief Financial Officer Tom Schoewe said last month.

Why did Walmart’s SKU rationalization effort fail? Because Walmart ignored the market basket effect.   It is not an issue of cutting too many SKUs; it is an issue of cutting the wrong SKUs because you do not know the product associations in buying patterns. A low frequency items can be profitable and may be often bought with other low frequency items.  If you cut one of these SKUs, you will lose the customer.   On the other hand, there are SKUs that are bought in low frequency in 1-item baskets. The loners!  These are typically low margin, high capital utilization SKUs.  These SKUs can be easily identified with Customer Buying Patterns Analytics.

What most retailers ignore in SKU rationalization is the market basket effect. Profitable customers may take their entire basket elsewhere, if they can’t find certain items (even if those items are “slow-moving”).  The market basket analysis across hundreds of thousands of SKUs requires advanced analytics. Based on testimonies from Wal-mart customers, people were in fact choosing to go elsewhere for many of their shopping trips. This is why Wal-Mart has changed their tune very quickly.

“They are calling me back and saying, ‘We need to hire somebody who has experience in this category and knows this buyer — it looks like we are back in business,’” said Smith, who is based in Rogers, Arkansas. I think Walmart does not get it.  They need help not just in categories; They need help across the categories. They need help on what items are typically in a basket – also called Customer Buying Patterns!

Emcien's Pattern Based Analytics Automatically Reveals Choice Combinations and Trends in Sales Transactions

A fast emerging area of business analytics is Pattern Based Analytics (PBA). This has been launched due to the very large amounts of data and need for analytics that can reveal meaningful patterns that businesses can act on. A typical reaction to the large amount of data is “If I had seen this coming sooner, I could have acted faster, decreased my risk and enhanced my opportunities for growth. Pattern Based Analytics typically requires focus on a business areas, e.g. Sales, Marketing, Finance, etc. The key to Pattern Based Analytics is automatically revealing intelligence that is hidden in the data/information.

This is a fast growing area because of key value points:

Instant Use - The inherent nature of Pattern Based analytics is that it does not require models and it accepts unstructured data. Hence, one of the greatest value points is Instant Use!

Accepts unstructured data –  A key value point that drives down implementation time, barriers and cost, and dramatically increases applicability of the analytics.   The ability to detect patterns in unstructured data makes it very easy for applications from sales data, marketing data, to twitter strings.

Big Problems are easy – Problem size and data size are not an issue with PBA. On sales data, Emcien’s PBA will easily solve buying patterns on 250,000 to 500,000  SKUs in a few minutes. This offers the ability to solve problems that were too large/expensive to solve previously.  This is a game changer, when the closest alternate solution requires complex models and has serious size limitations of a few hundred SKUs.

Works on problems big and small – On problems big and small, PBA is a natural fit. PBA dramatically lowers the price of analytics, enabling smaller companies to gain immediate value from business analytics.

No data-models, No data-cube, No set-up – This is one of the single biggest value points for PBA.  This eliminates the need for specialized analysts, statisticians and technical staff  to interact and maintain the system.  The  ability to accept unstructured data and not require a model means No Setup. This also means you can go live now!  No more 18-month implementation cycles!!!

Intuitive for non-technical users – Pattern Based Analytics can present results naturally in a very intuitive way.  This is because the patterns that are pop are typically the top categories that need attention. There is not need to drill down and ask questions – the ultimate bain of every BI user.

When Pattern Based analytics is pointed at sales data, the patterns that pop are “what are the top selling items”, “what is the pattern of choices combination”, “where is this happening”? Any non-technical business user can use this report to stock better and drive more sales.

Always up to date – Patten Based Analytics does not use models and cubes. Hence there are no cubes to maintain and update. Even as time passes, the analytics are always up to date, due to the ability to input non-structured data.

Gartner has rightfully established Pattern Based Strategy as the next frontier for capitalizing on large volumes of data and deriving value fast and continually.

We don’t need to get new customers!

Very bold statement from the Macy’s CMO Peter Sachse in his keynote speech at the Retail Innovation & Marketing Conference talking about a shift in company focus.

Here’s how it all started: Last year, Macy’s embarked on an intense research project to better understand their current customers. They conducted dozens of focus groups. Talked with nearly a thousand people walking out of their stores. Leveraged data from NPD Group for a holistic understanding of their customers. Combed through all of their transactional data to find themes in buying patterns and shopping habits.

The overwhelming finding?  For Macy’s, “What we don’t need to do is get new customers,” Sachse said. Instead, “we realized that all we need to do is take care of those who already love us.”

The company has set out on a goal to encourage each existing customers to visit the store one more time each year. “Half the battle is won if we can get them to walk into our store,” Sachse said. “And if we convert them during that visit, our comp store sales will explode.” To accomplish that goal, he said, “We had to get a lot closer to the customer,” which has led to the company’s new strategy of customer-centricity.

I could not agree more! Macy’s needs to understand the buying patterns of its current customers and serve them better. This will result in higher customer satisfaction, higher repeat sales and higher profits. If you do not know the buying patterns of your current customers, getting more customers is NOT going to help. Mr Sachse is absolutely right!

Companies today spend tons of money trying to get more customers. Very few companies have a finger on the pulse of the buying patterns and trends of their current customers.   What is the point of getting more customers if you cannot serve the one that you already have? Is it just busy work? Or is it because with thousands of SKUs, companies do not know how to keep up with customer buying patterns?

Congratulations Mr Sachse! I look forward to walking into your store and finding the right stuff.