A Bigger Bang for Your Merchandising Buck
I’ve met some impressive people in the years I’ve been in business. One of the professions that has always amazed me is that of the buyer/merchandiser, especially in fashion and apparel. These the people who can look into the future and tell you, precisely, what the demand will be for products two weeks to to fifteen months away, which, depending on the product, is the time it takes to bring a concept to market.
They go to fairs and shows, talk amongst themselves, run focus groups and surveys, contract out trend forecasting and analysis—but that doesn’t take away from them the phenomenal intuition they have. Big retailers depend on these people to get it right (or as close to right as possible). These people are paid enormously well; only big retailers can afford them.
A digital suggestion box, which lets people write suggestions in their own words at the moment of inspiration, which can be shared and liked on social media so the marketer gains a sense of its significance, is another, valuable marketing tool these buyers and merchandisers use to gauge demand.
But what of the smaller retailers who simply can’t afford the salaries and bonuses these buyers and merchandisers command? How can they get a bigger bang for that merchandising buck?
Here’s a case in point: Chuck Peters runs a sporting goods company based in New England. He’s done it for over a decade now. Five years ago he began to sell online. His idea was to sell online primarily to the local market, but within a short time people from across New England began buying from him, and he has received orders from as far away as Oregon. Revenue has gone up, along with the number of customers Chuck’s business has to deal with every day. His staff pride themselves on being close to the market. Nobody seems to complain; everyone is happy.
That leaves Chuck with time to be his own buyer, so he heads off to the fairs, reads the industry press, checks out the Internet and even has a box on the company website inviting people to write in comments. When he places orders, he does so for enough volume to keep the purchase price down, but he doesn’t want to keep too much stock as the products he sells are seasonal, and he has found that tastes can change fast. When negotiating price, he insists that orders can be filled within three weeks, because otherwise he can miss demand. Chuck’s sister, Louise Race, is a whiz with Excel and can tell him who bought what, when, and for how much (including discount) and what it costs, so he knows exactly where he stands.
Chuck is always worried he might get it wrong somewhere down the line. While he could correct a bad call, fixing it would certainly punch a hole in his pocket. Just as bad, he can see other retailers are coming into ‘his space’. Chuck knows competition is a fact of life; he just doesn’t want to start a price war if he can help it, as that would just eat into his margins.
Louise keeps telling him that constantly improving customer service and engagement is one way to do that, but he’s not quite sure how. Chuck also knows that adding new products to his range would attract more business, if only he knew which ones to order. How to do all that with the limited budget he can afford?
Here’s a few ways to achieve those goals
The key to deepening engagement with customers who are not able to walk into your physical store is to replicate in the digital world all the human activities you expect to find in the physical world. Chuck’s staff seem to be on the ball, and, for as long as there are enough skilled people ready to respond to demands instantly, customer service is fine. He could create a ‘digital assistant’ for the online store, as these can handle the majority of ‘predictable’ demands quite effectively, leaving more time for his real assistants to handle more detailed/difficult issues.
Chuck already has a ‘comments’ box on his website, which is really good forward thinking. A clever (and economical) thing to do is to transform that into a ‘digital suggestion box’. That will give him two things.
Firstly, it gives Chuck some positive, well thought-out ways that he can improve what he offers already, which always helps. Chuck could also recognize and reward people who send in suggestions. The mere act of doing that, even if Chuck doesn’t act on the suggestion, deepens engagement and loyalty, giving Chuck a long-term customer.
Recognizing and rewarding customers for their suggestions actually converts them into promoters, and that means new business from people they know, but whom Chuck doesn’t know—yet. Chuck could even take this one step further. He could create a section on the website publicly thanking people for their suggestions. Do that and those same people will like and share the recognition with their social friends, widening awareness even more. A very big bang for a very small buck.
Secondly, Chuck will inevitably get suggestions about the products he sells, and the products customers would like to buy from him, if he stocked them. I can’t tell you how important that is. People are telling Chuck what they want to buy. Every marketer, merchandiser, and buyer wants to know that. You can’t ask for more.
Better yet, with our digital suggestion box, suggestions can be shared and liked on social media. Those likes and shares are essentially votes; the more of them, the more market support there is for the suggestion. It gains a weight that will let Chuck assess its importance, do a quick cost-benefit analysis and build it into his action plan.
A digital suggestion box is a tool that helps Chuck reduce the risk of misjudging market demand, anticipate and plan for changing customer preferences, improve customer interaction, deepen customer engagement and broaden market awareness. That’s a lot of real merchandising power. The type the big guys go for, but within Chuck’s budget.
Chuck could also get someone to help him use some inexpensive tools to create some of the other things the big guys have: focus groups and surveys. The way to roll those out to his customers is with a digital newsletter, which would let him communicate other initiatives also, like promotions, new product lines, recognitions and rewards for suggestions received, and anything else that helps deepen his relationship with customers.
Those are some of the ways to get a bigger bang for your merchandising buck.