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The profitable habits of highly successful retailers PDF Print E-mail
Written by Alixe MacRae   

ImageCharles Duhigg, an investigative reporter for The New York Times, explained in his new book how mass merchant Target has the uncanny ability to predict a pregnancy before the lady-in-question's family is even aware of the situation. The answer is simple. Target has the best data mining ability of any retailer in the world today.

In his recently published book, Duhigg points out that every large retailer, not just Target, attempts to make their advertising meaningful to their customers and smaller retailers would be wise to emulate them. By the way, his book is entitled The Power of Habit: Why We Do What We Do in Life and Business, just in case you'd like to buy a copy.

The official name for this practice is CRM (customer relationship marketing), but it has stealth in its heart. When Target sent baby-centric coupons to those potential mothers-to-be, it included deals on lawnmowers, power tools and other items to ensure customers weren't totally freaked by their prescience.

On my birthday, I received offers from a number of savvy local business people including local restaurants, book sellers and dry cleaners. They targeted me with their good wishes while conveying enticements to encourage me to visit their premises.

Here's a question: do you know when your customers' birthdays are, and if you do, how do you recognize these occasions? If you don't know these things, find a way to ask. (Here's a hint: check out your customer's Facebook page - you'll be amazed at what you'll learn.)

Smart retailers are expert at predicting what the consumer wants even before she knows she wants it. The key predictors showing that customers are willing to change their buying habits almost always include major life events: among them, a new baby, marriage, divorce and moving.

People will change their brand of coffee, their favourite beer and even the store they most often shop at. As far as I'm concerned, every furniture retailer in this country should make friends with every moving company in his community (even those that aren't as local) - and every real estate agent as well.

Provide these fellow local business people with a welcome-to-the-neighbourhood e-mail for their customers; one that enables her to redeem coupons or special offers for her new home. Moving companies and real estate agents aren't the only potential partners - local restaurants, grocery stores and dry cleaners, among others should be cultivated as well.

Here's a hint: the offer you make through these new partners must be special; not a re-hashed version of something that has already advertised.

A habit, according to Duhigg, is a repetition of four things; the cue, the trigger, which habit to use and finally, the reward. Whether it's mice in a maze; reaching for a donut at 10am or Monday-after-work beer with your friends, the pattern is the same.

Triggers can be physical (back hurting after sleep), emotional (wanting to chat with those close to you) or just relief that you navigated your car in terrible traffic.

But most of the retailers reading this column don't sell diapers, baby wipes or unscented lotion.

A good question is how many retailers know how long someone keeps their television set before dissatisfaction creeps in? (It's probably not as long you would think.) The manufacturers and/or the distributors of the models on your floor know - you need to ask them. Then, plan your marketing to fish when that consumer is biting.

How long a mattress lasts before becoming uncomfortable? According to the most of the better mattress manufacturers, it's between eight and 20 years, depending on the price/quality of the mattress purchased. This assumption, presumes care and regular turning, of course.

How long does the average major appliance stay in good working order - whether it's a range, refrigerator, dishwasher, washer or dryer? The manufacturer knows, particularly when the parts orders pore in. During my tenure running the parts department at Sears Canada; we knew when a product started to fail - so should you.

How long is the homeowner content with her decorating scheme? Money is a factor but so is wear-and-tear. Those with pets and small children have a shorter cycle.

Anticipation is the key to success; once the problem is discovered; all other stores are fair game.

If you don't know your customers, your competitors will. They will mine the information to grab them away; and if they're smart, you'll never see them again. Be aggressive (in the best possible way) and be the thief, not the victim.

A little bonus for HGO readers: Click here to read Timothy Wilson's review of Duhigg's book in the New York Times.

Alixe MacRae is one of this country's best known merchandisers, having held senior positions at a variety of well-known Canadian retailers including Stoney Creek Furniture, Sears Canada and The Bay. She now owns Concierge Relocation (, a company specializing in move management, especially for dramatically downsizing seniors and their overwhelmed children.

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