B THREADZ Threadz is a small, independent retail women's clothing store located in London, Ontario. London is a city of 336,000 in southwest Ontario and has a large young adult population because of the university and colleges located in the area. The owner-manager of the store is Jennifer Byers. Jennifer established Threadz eight years ago after graduating from university with a bachelor's degree in business management. During her high school and university days, she worked in various retail clothing stores and gained valuable experience for this kind of business. Her father, a successful entrepreneur, provided start-up capital and other assistance for the venture. Although sales have increased steadily each year, Jennifer has been concerned recently that this success is starting to fade and will be short lived unless something is done soon. Last year, sales were virtually the same as the previous year, and the rate of growth in sales has declined in each of the last three years. Because Threadz is an independent retailer, Jennifer is concerned that stiff competition from the well-known chains is luring away her customers with their lower prices, greater choice, and large advertising budgets. In addition, online sales of clothes continue to grow, and companies that rent clothes to women are starting to emerge. The Threadz outlet contains 500 square metres of selling space and targets the 20- to 35-year-old aspiring professional woman. Jennifer's competition comes from such stores as Banana Republic, Club Monaco, and RW and Co. There are many other clothing retailers that are somewhat competitive, but Jennifer is of the opinion that they are not focused on exactly the same customer that Threadz targets. Jennifer describes her target market as the upper-middle-class woman who is "on the go" and requires clothes that are easy to "mix and match" and are "for any occasion." Threadz's target market comprises a decreasing circle of women who enjoy the shopping experience. Because of career obligations, women in this market tend to shop during lunch breaks, in the evenings, on weekends, as well as online. Threadz is located in downtown London and is accessible to a large work population and the residential market. The downtown has many eating places and night clubs, which also contribute to pedestrian traffic at midday and in the evenings. Jennifer has operated the store in the past with her as manager, an assistant manager, and two sales clerks. Recently, she hired a new assistant manager, Sarah Hetherington, who graduated from a retail management diploma course at a local college. As Jennifer is discussing Threadz's current sales dilemma with her, Sarah asks her if she has thought of establishing a database program in an attempt to retain the customers she suspects she is losing. Sarah indicates that such a system would help in better customer relationship management (CRM), and would assist her in her social media promotions. Although she is aware of CRM, Jennifer thinks that such systems are far too expensive for a small, independent retailer like Threadz. She is not sure that she can afford another marketing cost as she is already spending 4 percent of sales on promotion, above the industry average. Page 437 Threadz's promotion budget comprises social media, her website, special events, newspaper advertising, and participation in various local retailer promotions. Much of her marketing continues to be to a large group, and to her Instagram and Twitter followers. Sarah explains that technology costs have come down and that a database system might help Threadz provide better service to its existing customers. Such a system could profile these customers and monitor their purchasing behaviour to tailor special offers to them. As the system is developed further, Sarah explains, it could also be used to target new customers. Another use would be to exchange this information with other organizations, such as restaurants, jewellery stores, and shoe stores, that have the same target market as Threadz. A main benefit, according to Sarah, would be that this system could provide in-store sales personnel with immediate information about its customers so that the store could provide more personal treatment. Jennifer sees some of the advantages of the system that Sarah is suggesting but is unsure whether it is worth the financial investment. Questions 1. Evaluate the advantages of the system that Sarah Hetherington is suggesting. 2. What concerns should be explored with this system? 3. What steps should be followed in setting up a CRM system for Threadz? 4. What other promotional suggestions might improve Threadz's performance?