Identifying the many faces in a customer profile - column

Identifying the Many Faces in a Customer Profile Meeting the five "rights" (right goods, right time, right place, right price, right assortment) is easy if you know who your customers are. Ah, but there's the rub. Profiling customers to anticipate their needs is one of retailing's most difficult tasks. But unless retailers get a reliable profile on their customers, their merchandising strategy is always just a reflection of last season's missed opportunities. And when a retailer has stores spread out nationally or even regionally, that profile becomes more elusive. Let me give you some examples of that elusiveness.

Focus on Sears shoppers for a moment. In Chicago, 15.1 percent of Sears shoppers prefer shopping at Sears for children's clothing, but in San Diego, only 7.8 percent of Sears shoppers go first to Sears when buying their kids clothes.

An even greater divergence is seen in appliance purchases. Among Sears shoppers in Atlanta, 71.1 percent prefer Sears for major appliances, but in Milwaukee, only 28.8 percent of Sears shoppers buy their washers and refrigerators there.

Further, about half (50.1 percent) of Sears shoppers in San Diego buy via catalogs or direct mail, but in St. Louis, 69.5 percent of Sears shoppers make purchases this way.

The contrasts continue when we look at Wal-Mart shoppers. In Houston, 51.8 percent of Wal-Mart shoppers cite price as their reason for choosing a store when shopping for men's clothing. But in Charlotte, N.C., only 39.2 percent of Wal-Mart shoppers make that choice on price first.

Looking at two markets even closer geographically, we see striking differences among Wal-Mart shoppers in Houston and Dallas. When Wal-Mart tries to reach its shoppers through newspaper advertising, it must deal with differences such as these: 41.1 percent of its shoppers in Houston read the national/foreign news section of the papers, while in Dallas only 23.2 percent of Wal-Mart shoppers read that section of the paper.

What accounts for such differences among regular shoppers at a given store? It seems to boil down to "different strokes for different folks."

Americans refuse to be pigeonholed. If you study lifestyles and demographics, you find major differences among the people who shop the same chain but in different locations. For example, almost half (48.1 percent) of Nordstrom shoppers in Los Angeles are employed in professional/managerial jobs, while about one-third (36.3 percent) of Nordstrom shoppers in Salt Lake City have this kind of occupational background.

Nordstrom merchandisers buy differently for their Los Angeles customers, 37.8 percent of whom are single/never married, than for their Seattle customers, 26.4 percent of whom are in that category.

Among regular Target shoppers in St. Louis, 17.4 percent of the men are factory workers or laborers. In Milwaukee, that number is almost double, 33.2 percent. In Milwaukee, 4.6 percent of Target shoppers are retired, whereas 0.8 percent of that chain's shoppers in St. Louis are retired.

Demographic differences make merchandising equally difficult at K mart. For K mart shoppers in Detroit, the established average household income is $28,700. That figure drops to $19,600 for K mart shoppers in Buffalo. In Detroit, 14 percent of male shoppers regularly buy home improvement/hardware merchandise at K mart, but in Buffalo, only 3.4 percent of male K mart regulars buy their hardware at K mart.

What do these numbers mean? They mean that mass marketing is no longer possible, not only for a segment of retailing, but even for individual chains. The "one size fits all" merchandising plan will just not work, because what draws raves in Raleigh may bomb in Birmingham.

We live in the Information Age and have access to tons of information. Often what sheds light in one area raises a contradiction in another. But gaining that information about consumers, and turning that information into meaningful merchandise plans, is today's competitive advantage.

The statistics presented in this article are drawn from the largest single-source customer research database in the country. Gathered by Impact Resources of Columbus, Ohio, and provided to Touche Ross through an exclusive arrangement, this kind of data will be the basis for future articles in this series.

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