THE CONVERGENCE of new information technologies and marketing is beginning to blur distinctions between traditional retailers and DMers.
Aside from the emergence of e-commerce, perhaps the most striking change for retailers is their growing recognition of database marketing, something virtually unheard of in retailing a decade ago.
Studies conducted by the International Mass Retail Association (IMRA) in Arlington, VA, show that more retailers need to develop one-to-one relationships with customers and move away from mass marketing.
IMRA studies suggest retailers can increase profits by learning more about customer segments, tracking purchases and tailoring offers to individual customers.
The relationship between most retailers and consumers is based on price, rather than satisfying a customer’s needs and preferences. Yet, IMRA research indicates that convenience and an assortment of product choices are often more important to consumers than price when making shopping decisions.
Only a handful of retailers presently use database information for even the most elementary direct mail applications, compared with 54% of manufacturers that have database marketing programs, according to IMRA.
The group cites frequent-shopper programs as an example of how retailers can effectively use database information. If a program results in a 5% increase in customer retention it can boost a retailer’s profits by 30%.
* More than a million retailers generate in excess of $2.7 trillion in sales at some 1.4 million retail establishments. Four states account for 30% of U.S. retail sales: California, Texas, New York and Florida.
* Retailers employ morke than 20 million Americans, a number projected to increase to 24 million by 2005. About one-third of retail jobs are part time. Approximately 3.3 million retail workers are college or high school students. The total retail payroll exceeds $277 billion.
* Retailers created about 700,000 new jobs during the 1990s, or about 13% of all new jobs nationwide, making retailers a larger employer than manufacturers.
* Most retailers are small businesses. Almost 90% of retailers hire fewer than 20 workers. Only 1.2% of all retail companies employ between 100 to 499 people. Restaurants take on the most retail workers, followed by food stores, general merchandise stores and department stores.
* Wal-Mart is the largest general merchandise retail chain. Sears places second, with Kmart, J.C. Penney and Dayton-Hudson trailing. Toys ‘R’ Us is the biggest specialty store, followed by The Limited, Circuit City, Best Buy and TJX.
* Retailers report employees and shoplifters steal $32.4 million in merchandise annually, with 23% of the thefts occurring on Fridays and Saturdays. The most frequently stolen products include auto accessories, cassette tapes, CDs, clothing, cigarettes, over-the-counter remedies, sneakers, hand tools, bed sheets, pens, video games and movie videos.
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