Inventory Management
Plan your merchandising by the numbers. Finding and using regional data on your area to help you plan a better merchandise mix
By Erinn Morgan
Do you know where your customers are? Perhaps they are out on the links or shuttling kids around to soccer practice. Or, they might be working at a factory or chained to their desk at the law firm.
Your customer base is the key ingredient to determining your inventory mix. But, it is likely made up of many different types of people of varying demographics—genders, income levels, ages, and interests.
How can you understand them better and plan a more targeted merchandise mix? Taking a look at some of the (often free) data available on the Internet or through your local Chamber of Commerce can help you determine just who lives and shops in your own neighborhood.
GETTING STARTED
"Any information you can garner is, of course, going to help you—your gender mix plus price points and styles," says Lisa Duncan of Duncan & Duncan Enterprises (www.lisaduncan.com), a retail consultant and speaker with more than 25 years of retailing experience. "The best information is on age breakdown, income, and where they work, live, and play. You can definitely make this information the main point of the business and the main line that trickles through your inventory."
Even if you think you have your customer base dialed in—or you have a very specific focus like luxury eyewear—checking out your local demographics can confirm your course or indicate a change in your area's population.
"I am working with a store in Kerrville, Texas, where the population demographics have changed dramatically," says Duncan. "The area catered to an aging customer, but now that generation has passed away and a younger customer is coming into the store. This business had to change its focus to stop people from going to San Antonio to get what they needed."
Demographic information can help you better target or refine your customer base and store image, both of which can lead you to select the best inventory for success. This type of information can help even if a defined image isn't your strong suit or if you are new to an area. Digging deeper can tell you exactly who is living and working in your area. And, how the numbers may be changing.
FREE & POWERFUL
Local demographic statistics can be easy to come by. There is a wealth of free information that can be obtained from a number of key websites.
"There are all kinds of sites you can seek out for information," says Patti Galko, the director of retail operations for the 20-location, Pennsylvania-based Northeastern Eye Institute. "They can really help you plan those inventory percentages."
■ Quick Take:
http://Quickfacts.census.gov
This website, provided courtesy of the U.S. Census Bureau, provides a fast and useful look at some key statistics for each state, its counties, and most major cities and towns. It provides population numbers, education levels, plus age, race, and income breakdowns. It even shows total retail sales volumes for each area. Bonus: the home page features a link to state-by-state data for kids.
■ City Specific:
http://www.city-data.com/
This site hosts an impressive amount of city data, including gender, income, race, job type, and age breakdowns. It also features information on home sales trends, population density, marriage status, crime, weather, and new home construction permits by year. While some of this may be extraneous to your cause, it may also help paint a clearer picture of where your area is headed.
■ The Big Picture:
http://www.fedstats.gov/
This useful website compiles statistics garnered from more than 100 government agencies to deliver statistical profiles of states, counties, cities, Congressional Districts, and federal judicial districts. Much of this information is similar to what is found on http://Quickfacts.census.gov, save for some unique stats and breakouts.
■ Compare and Contrast:
http://zipskinny.com
Looking to see how you stack up against your competition? Check out this unique website, which lets you compare your own area's demographics to those of any other zip code. The site will automatically serve up comparisons to a large number of your neighboring zip codes as well as allow you to enter up to 20 more for additional contrast.
| Local Resources |
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| Eyecare professionals can also look outside the web—and their own four walls—for a profile of their community to help with inventory management. "You can get a multitude of information from your chamber of commerce, which you should definitely be a member of," says Patti Galko, director of retail operations for the 20-location, Pennsylvania-based Northeastern Eye Institute. "You can also make a lot of connections with your chamber of commerce; it's just a good move with the economy and most businesses being flat." Galko also points to the downtown Business Authority, Small Business Center, or Main Street Association, if your area has these, as good places to gather information. "Instead of reading about a new competitor or new mall coming into your area in the newspaper, if you belonged to these groups, you would already know that is going to happen." She also notes that other groups that relate to your customer base, such as women's groups or sports clubs, can be excellent sources of information that can help you plan your assortment more precisely. |
| Survey Your Own Customers |
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| Why not go straight to the source? Surveying your customer base about their wants and needs can help you determine the best inventory mix that appeals to them. "We did a big survey of our patients a year ago and then did a comparison with those numbers," says Patti Galko, director of retail operations for the 20-location Northeastern Eye Institute. "Now I use a lot of that data for inventory planning as well as a variety of other things." One thing to remember is to keep surveys short and to the point for busy customers (a perfect time to provide the survey is when they are filling out forms for the doctor). |
WORTH THE PRICE OF ADMISSION?
A few companies offer even more detailed information about local demographics across the country, but these are typically fee-based services.
Is it worth it? An in-depth look can help you micro-manage your inventory, but these sophisticated sites are often geared to retailers who are looking to open a new location or make an acquisition and need solid area demographics to determine what's right for them.
■ Detailed Demographics:
www.empower.com/Demographics
The Empower Geographics website offers consumer, business, and industry demographics all tailored to your specific needs. They can even determine area-specific (i.e., the five miles surrounding your store) psychographic data for profiling consumer brand preferences and spending habits of a population or area. Their solutions can also help determine your revenue potential and untapped market opportunities.
■ Customer Psychology:
www.mybestsegments.com
This website, which is put out by Claritas Market Segmentation, delivers a deeper look into the psyche of your area's population. It offers a complimentary look, by zip code, of your neighborhood's top five lifestyle groups.
A deeper look into your area and others can be purchased with a one-year subscription to the service for $149.
In the end, all of this information will help you to stay focused on what you do well.
"A major retailing pitfall is to try to be everything to everyone," says Duncan. "If you stay focused and intent, it will keep you unique and help you better service the people you opened the store for in the first place." EB
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