After retailers create their strategic plans and position themselves to compete, they use market research to understand customers’ needs and find the right location for distribution of products.
Twentieth century psychologist Abraham Maslow laid the groundwork for discussing human behavior by identifying needs in his Theory of Human Motivation (Maslow, 1943). Physical needs like warmth, health, and protection can be met by the utilitarian aspects of clothing. Psychological and emotional needs arise during social interaction. Humans use symbolic communication like speech, gesture, and the way they dress to communicate needs and negotiate the means to satisfy them. People use clothing to send messages about their need for respect, visibility, and acceptance. They may wear certain things to fit in or stand out. They may buy clothing for entertainment and to express spontaneity or creativity. They may resist buying immodest clothing to show devotion, moral choice, or the need to be accepted. They may seek out high-tech fabrics to show how knowledgeable they are.
Recognizing Customer Needs
In small retail settings, customers can express their needs directly to the manager or the owner. Small online companies may pay attention to consumer blogs. In larger retail formats, dealing with direct feedback from the customer is more difficult. Customer service departments’ reports and letters from individuals can be skewed to the negative. Larger retailers use surveys, focus groups, and test markets to get more balanced feedback. Some companies purchase trend reports that track social and cultural shifts. Companies with customer relationship management (CRM) systems can gather data electronically and look for trends in sales to see if customers’ needs are changing.
The language of fashion merchandising is not the same as the language of psychology. Needs must be translated into numbers so that the merchandiser can write orders for products. Demography breaks down large populations into subgroups whose characteristics are easily identified so that the groups can be counted. The main source of demographic information in the U.S. is the Census Bureau. The Census gathers information such as age, education level, ancestry, income level, family size and makeup, and occupation. It reports the information by single variables like how many people are over 65 years old or under 12. It then compares one variable with others, like all the people who are over 65 who live in Texas or who have a Bachelor’s degree (U.S. Census, 2006).
The Census does not list the needs of the groups it outlines. However, needs can be inferred from descriptions of behavior. For example, the Census may say that men aged 50–60 contribute to charitable groups more than other age groups. A merchandiser who is in charge of buying and pricing a line of clothing for middle-aged men might already be meeting their needs for respect and fitting in by the fit, color, and style of clothing offered. Sales may be low, and the merchandiser may need a new way to attract the customer into the store. The merchandiser might consider offering to match the customer’s contribution to a charitable cause up to a certain percentage of the sale. A merchandiser who knows that a need is already being met by his or her product can find out if other groups have similar needs and use the Census to find out the size and location of those groups. For example, a store that is already selling modest clothing to a particular ethnic group might look for ethnic groups who also expect modest dress and focus their marketing in that direction.
Expanding into New Markets and Locations
Markets can be defined in a number of ways. A market can be a geographic zone (as in the Northwest). It can be a group with similar needs such as tweens, executives, or suburbanites. A market can be defined by a need such as comfort, dependability, or quality. It can be a category of products that meet different needs for the same consumer group such as infant clothes, infant toys, and infant carriers. A market can also be the people who shop in a retail format such as Internet shoppers.
As a company expands, it can choose into which kind of market it wants to move. A company with an existing product and market may choose to increase sales by focusing on the product and adding categories or improving quality. It can reach out to demographic groups with similar profiles, and it can add retail formats like Internet sales or new stores.
If a company sells a product that meets a defined need and its goal is to reach all the people with this need, then its choice of format will be based on research into the buying habits of the customers with that need. The format could be party sales, the Internet, trunk shows, conventions or small specialty stores.
If the company has money to invest, expertise in retailing general merchandise and the goal of making a profit for shareholders, it will need to conduct high-level market research and gradually narrow down its selection process using complex decision making models. The company can employ consultants and use computer- generated modeling programs that overlay geographical, cultural, social, and economic factors. Using mathematical formulae to calculate possible sales, the company can plan the locations that are best suited to meeting their goals.
Be smart and be encouraged,
Maslow, A. A. (1943). Theory of Human Motivation. Psychological Review 50, 370–396.
U.S. Census Bureau. (2006). Population and Household Economic Topics. Retrieved from the U.S. Census Web site: http://www.census.gov/econ/census02/guide/INDSUMM.HTM