Knowing your customer at the zip-code level

MIAMI -- Shoppers at Sears HomeLife stores used to feel like they were ready for snow instead of sand when they saw the dark, traditional furniture on display in Florida.

But the Sears, Roebuck subsidiary has livened up its offerings with leather, rattan and wicker living room sets and lighter, brighter fabrics to match the taste of customers close to the tropics.

Sears' makeover is a product of micromarketing, which offers a reward of big bucks if retailers struggling to get noticed in a crowded marketplace understand their customers at the zip-code level. "The bottom line is the customer continues to become more elusive," said Steve Nevill, a partner with Atlanta-based retail consultant Kurt Salmon Associates. "You're trying to get customers to spend more on each walk-through." The days of national chains carrying the same merchandise everywhere are over. With retailers struggling to get noticed in the crowded marketplace, many now base product selection and allocation on the needs and desires of their customers in a particular area. But finding the magic, moneymaking product mix takes more than just common sense. Focus groups, demographics, distribution logistics and computer analysis all help in the planning. Target discount stores started micromanaging after it faced a series of blunders over the last few years, like sending snow shovels to California and running an Antarctic promotion during a Florida heat wave. "You get the picture," said company spokeswoman Gail Dorn. "We just kind of were shooting ourselves in the foot." The solution was to pay attention at the store level. In Atlanta, in-line skates are big sellers at one store, "but you can't sell a pair of them down the road five miles," Dorn said. Regional managers couldn't be expected to know that the first store is in a flat neighborhood and the second is surrounded by hills. Athlete's Foot also changes its product selection based on regional preferences. The footwear retailer found that women in Oklahoma have bigger feet than other parts of the country, so they send more large sizes there. California, however, gets smaller sizes because Asian women shrink the average. Regional preferences have taught Frito-Lay to tailor its snack- food deliveries as New Englanders buy more vinegar-flavored potato chips and Southerners dig into barbecue chips. "Creating a business system that let's you start to cater to those unique tastes better than your competition is destined to produce better sales per square foot and hopefully profit per square foot," said Neal Pomroy, vice president of Mercer Management Consulting in New York. After an experiment in Puerto Rico, the 20 Sears furniture stores in Florida were renovated, redecorated, restocked and reopened last month with a new focus. If it works, the nation's second-largest retailer will take the concept to a wider audience. "Our customer focus groups absolutely told us, `You have great merchandise -- if you're in New England,'" said Barbara Brothers, Florida's regional business manager. "We changed I would say roughly half of our merchandise overall and changed our looks for the customers." At a HomeLife store in suburban Cutler Ridge south of Miami, the store is stocked with floral-designed and wicker furniture, perfect for the warm-weather Floridians. Also available is the smaller-scale furniture, like 80-inch sofas that can fit in their apartment elevators and 36-inch tables with two chairs are just right for a breakfast nook. "We're on the firing line right now. It's not like it's a decision that come down from the top," said Store Manager Jesus Orta. "It's been a great experience to know my decision counted."

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