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OUTLOOK IMPROVING THE CUSTOMER EXPERIENCE knowledge equals profit Powered By Docstoc
					     Apparel strategist                                                                                        knowledge equals profit
 Judith Russell, Executive Editor                                                                                                                     March 2009

                     ouTlook: improVing The CusTomer experienCe
This is the first of a series on how companies are        Forging The missing link Through                          hoW Well does iT Work?
improving performance in a declining economy.             CusTomer inTeraCTion                                      Actual results from TYG’s retail clients show that
                                                          With the billions spent each year on supply-chain         conversion rates can steadily increase even when
                                                          improvements by apparel manufacturers and                 traffic decreases. Clients have reported double-digit
The CusTomer experienCe
                                                          retailers, it is amazing that so many of them forsake     gains during the toughest months of the recession.
On January 19, 2009, Judith Russell headed to a
                                                          the final link in the supply chain; the selling floor.    In an environment in which the entire organization
department store near her home in Westchester
                                                          The next generation of successful retailers will be       is involved with increasing the return on in-store
County, NY, to find something to wear to an inaugural
                                                          the ones who, like Yacobian’s clients, realize that       customer visits, success breeds more success and
ball in Washington the following night. The apparel
                                                          the consumer has changed. They will be the ones           ultimately higher sales growth levels. Reports Mark
industry consultant and mother of three had exactly
                                                          who capitalize on the investment already made in          Bean, SVP Operations of Casual Male Retail Group,
one hour to shop between her children’s activities.
                                                          their merchandise, stores, systems and marketing by       the leading retailer of big and tall men’s apparel,
Upon entering the eveningwear department she
                                                          delivering the desired in-store experience to every       “We’re getting a consistent increase month over
spotted several racks of beautiful gowns. “I’ll
                                                          one of their customers every day. They will combine       month over month…we’ve just come off our second
definitely find something here,” she predicted, and
                                                          the use of quantitative and qualitative tools to unlock   round of shops. We increased our shops by 32% over
immediately set to work. Within minutes, she had
                                                          pent-up, unrealized sales from existing store traffic.    last year in every measurement we have for engaging
an armful of little black dresses, beaded gowns and
                                                                                                                    the guest. We’re getting more and more customer
shimmering jackets to try on. After a few trips to the
                                                                                                                    satisfaction in the stores.”
dressing room, though, she was overwhelmed. There
was too much to choose from, and nothing seemed to        reTurn-on-VisiTTm                                         A feedback mechanism even incorporates qualitative
fit or look good. The only sales associate working in     The core measure TYG uses to track retail performance     feedback from the stores or specific customer
the department was returning items from the dressing      is ROVTM, or Return-on-Visit, the average revenue         requests into future merchandising, marketing and
room to the selling floor, and seemed annoyed at the      generated from each visit. Yacobian’s proprietary         operations strategies. Besides improving same-store
additional work her new customer was causing her.         software offers powerful insights into ROV and            sales, retailers can ultimately increase gross margin
Russell was desperate, but running out of time. Her       untapped opportunity by capitalizing on data from         by increasing full-price sell-through. By improving
daughter would be waiting in the cold to be picked up     retailers’ existing systems. Comparing ROV across         comps, they reduce the need to expand, thereby
from swim practice. She left the store, empty-handed      stores helps identify unrealized potential of up to       limiting the need for capital expenditures.
and frustrated. She would just wear something to the      30% from existing visits. By tracking a retailer’s
inaugural ball that she already owned.                    ROV on a monthly, daily and even hourly basis, the
                                                          system allows a company to plan, manage and
                                                          measure performance relative to the customer visit        The BoTTom line
The model ThaT no longer Works                                                                                      They’ll also have happier, more productive employees.
                                                          opportunity. Efficiency is achieved by systematically
“There I was, obviously anxious to find something                                                                   Casual Male COO Dennis Hernreich reports: “The
                                                          maximizing ROV, not merely reducing costs.
and ready to spend money, but no one made a move                                                                    sales organization is now a contributing member
to help me,” Russell later commented. “I’ll not be                                                                  of our team in terms of sales productivity, where it
returning to that store any time soon.”                                                                             wasn’t necessarily before. It has really energized our
                                                          CreaTing a Buying (noT selling)
The sales associate viewed her job as keeping the         enVironmenT
department neat, not helping customers find what          Most retailers train their associates to sell products,   With a different approach, the department store sales
they’re looking for. Her mindset was typical of most      but research shows that consumers don’t like to be        associate that Judith Russell encountered could have
retail sales associates today: she was operating          “sold,” they prefer to have someone help them buy.        proactively increased ROV by double digits on January
under a business model that is merchandise-focused,       Part of TYG’s process is to help retail clients create    19. She would have helped her store reach its daily
not customer-focused.                                     a buying environment, a sensory experience which          goal, and systematically enabled the company to
It is an operating model that will not last, according    stimulates natural buying emotions. Associates            achieve earnings estimates. She might even have
to Toni Yacobian of The Yacobian Group (TYG), the         learn behaviors that increase their availability and      saved her job. Less than one month later, that retailer
Boston-based retail solutions company that provides       comfortably connect with customers, even when             announced plans to lay off hundreds of employees.
customer interaction solutions to the luxury, specialty   completing daily tasks like returning merchandise
and department store retail markets. “Today’s             to the selling floor. Associates learn when and how
customer is in control, and the retail company that       to initiate interaction without scaring customers off.
doesn’t operate differently won’t make it,” she                                                                     FOR MORE INFORMATION CONTACT:
predicts. Yacobian’s company is launching its CIMS        Improving the quality and frequency of customer
                                                                                                                    The Yacobian Group
(Customer Interaction Management Operating                interactions increases ROV, and it does so without
                                                                                                                    3 Clock Tower Place Suite 130, Maynard, MA 01754
SystemSM) to a broad range of retailers. By viewing       increasing staffing.
opportunity through the lens of consumer visits, TYG’s
retail clients have managed to leverage existing
assets to drive impressive growth, even in this period
of drastically reduced consumer foot traffic.

A PU B LICATION OF THE APPARE L ST RAT E GI ST                                                                                  WWW. A P PA R E LS TR ATEGIS T. C OM

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