Why Apparel Retailers Need to Understand their Customers Better
Using data analytics to uncover actionable insights, retailers are better poised to understand their customers and meet and exceed customers’ expectations, while growing their top and bottom lines. This is a particularly important when it comes to apparel retailers.
Building brand loyalty is becoming more and more difficult with today’s savvy and fickle consumer. Consumers shop around and are not typically loyal to one specific brand. They purchase what they want at the best prices and the most convenient way. “Fast Fashion” has given consumers the ability to shop the latest trends just off of the runway, which makes accurate merchandise, assortment and pricing decisions key to garnering the loyalty of price and trend-conscious consumers.
The need for apparel retailers to understand their customers better also stems from the fact that apparel is fundamentally different than other retail segments such as grocery or hard goods. Typically, a grocery store's best customers will visit more than 52 times in a given year and deliver 5 percent margin. An apparel retailer's loyal customers might only purchase 4-6 times in that same time period, but deliver a 50 percent margin. Even if the customer visits an apparel store throughout the year, there is no guarantee they will actually make a purchase. Conversely, most people don’t visit the grocery store without purchasing. It's much more difficult to connect the dots in apparel, but because the margins are higher, it's far more important to get it right. Apparel retail analytics software can help solve these challenges for apparel retailers by using customer data to gain key actionable insights for a competitive edge.