Profiles & Trends

Analysts Say Retailers Should Pinpoint Regional Tastes

Nov 28, 2006
By Other
   

Some retailers are better than others at reading shoppers' regional differences, say professors and researchers keeping tabs on the industry. But, they say, much more could be done to anticipate shoppers' mind-sets and prepare ahead of time ¿ a potential bottom-line booster in a highly competitive and fragmented market, reports The Oregonian.
Some retailers are better than others at reading shoppers' regional differences, say professors and researchers keeping tabs on the industry. But, they say, much more could be done to anticipate shoppers' mind-sets and prepare ahead of time — a potential bottom-line booster in a highly competitive and fragmented market, reports The Oregonian.

"A successful retailer is the one able to tailor its merchandise selection to regional tastes," said Steven Keith Platt, director of the Platt Retail Institute of Hinsdale, Ill.
Platt said Wal-Mart Stores Inc. is one of the worst retailers in terms of such tailoring. However, the giant may have learned its lesson after going global, he said.

"They were getting killed because they weren't selling fresh fish — alive fish — and that's a big thing in China," Platt said. "Now, they're getting it and changing."

Many retailers fail at reading broader groups of consumers, said Michael Levy, a Babson College professor and co-editor of the Journal of Retailing. So far, he said, most companies settle on serving demographic differences. A retailer might see a higher Latino population frequenting a store, he said, and stock it as it does locations in Miami or Los Angeles.

"Still, that's better than they used to be at developing regional stock selections," Levy said.

Demographics are one of the easier ways to understand a small area's shoppers, but some experts say weather is even easier — and more crucial.

"Weather is becoming more volatile," said Paul Walsh, a business meteorologist for Planalytics Inc., which tracks consumer behavior based on the weather. "That means an even bigger impact on consumers and, from a business perspective, makes it more important to retailers."

Weather can save retailers money, he said, from pricing to staffing. One of his firm's clients, Jamba Juice Co., can limit employees on predicted rainy days, when shoppers are less likely to crave cold drinks, he said.

Or, in the case of apparel retailers, when it's warmer in winter — a signal clothing sales will drop — they should limit the depth of discounts. It's likely cold weather is around the corner, he said, and limiting sales to 40 percent off rather than 50 percent amid the warm spell might be more fruitful overall.

For the Pacific Northwest, climate and lifestyle seem the biggest drivers fueling shoppers, said Jeff Gennette, chief executive of Macy's Northwest division based in Seattle. Gennette, saying the region's shoppers show "huge" differences from others elsewhere, makes frequent decisions unique to his stores about what to stock and when.

"There is such an outdoors lifestyle in the Pacific Northwest," he said, "and it permeates through all (our customers') apparel choices and their home goods choices."