Think Customers: The 1to1 Blog

In the bygone days of the mass market, retailers filled their stores with a surplus of products, and customers had no problem buying them. Given the recessionary circumstances, customers are buying less, and retailers are moving less inventory. As a result, they must rely on greater insight from predictive analytics and customer feedback to accurately forecast the types of inventory customers want and the amount they will buy.

Today's retail environment requires decision-based product planning to maximize retailers' profitability.

Brian Kelly, CEO of Quantivo, told me yesterday that he's seeing more clients leverage the company's behavioral analytical solution to help with merchandising planning. One retailer, for instance, is analyzing customers' transactions across its catalog and in stores to determine how often and how much customers are purchasing from the catalog and then later from the store. This helps with teaching the cataloger how much inventory to keep in the store.

Other retailers, however, are relying on "old fashioned" one-to-one conversations between employees and customers to accurately plan inventory. The New York Times last Saturday reported that Macy's started an inititiative called "My Macy's" where employees in the stores keep a log next to the cash register to jot down customer comments, including what they are requesting or complain about. Managers visit the stores each week to read the logs.

The initiative seems to be working. For instance, when strapless dresses weren't selling well in Salt Lake City and Pittsburgh, the employees told the managers the customers wanted modest dresses instead. The merchandisers stocked more cap sleeve dresses, and dress sales soared.

Now, more than ever, sophisticated forecasting solutions and predictive analytics are necessary tools to survive the recession. But so is implementing the human element. This economic storm will mean sweeping changes for companies...and maybe, just maybe, it will also mean a return to good old-fashioned one-to-one customer service.