EXCLUSIVE: Michaels drives assortment planning with customer data
The Michaels Companies helps ensure it stocks the items shoppers want with in-depth data analysis.
Chain Store Age recently spoke with Melissa Mills, senior VP of general merchandise, Michaels, about how the specialty arts and crafts retailer collects and analyzes a wide variety of data to help develop seasonal assortments, such as its new summer collections, and promotions that align with customer demand.
How does Michaels collect and analyze customer data?
Customer-driven data is the biggest element and influence in our assortment planning. By relying on a combination of market research, consumer surveys, customer feedback, historical data and ‘test and learn’ pilots, we are able to keep a close eye on how customers’ needs and behaviors are changing and evaluate how well our strategies to address those needs are holding up.
How are these findings then used to drive assortment and promotions?
All of our collections are created with a trend-forward lens, and that planning process actually begins more than a year in advance. Not only do we leverage our trend forecasting capabilities, but we also keep a finger on the pulse of the pop culture landscape to meet emerging trends through dynamic merchandising of our evergreen assortment of supplies and componentry.
A great example of this was when we jumped into action as we saw friendship bracelets begin to take off ahead of the Taylor Swift ‘Eras’ tour. We worked diligently to ensure inventory was available and well-merchandised in stores, making it as easy as possible for customers to get in on the trend.
Our teams also got extra creative, and stores around the country started building their own bracelet-making displays and offering bracelet-making in-store classes, with over 22,000 bracelets being made in the classes.
We also use post-season analytics to show us future opportunities to consider for the next season’s assortment, which impacts what and how much we buy. We look at data on when items sold through in specific markets, so that we can account for customer demand with even more specificity in the coming year.
For example, if we know that summer stools sold through very early in a specific market, the following year we can increase the buy for those stores and ensure no customer misses out.
[Read more: How Michaels stays ahead of holiday planning]
Can you provide details on how you used data to create the new summer decor collections?
We respond to customer demand dynamically to ensure we’re anticipating and meeting their needs. Our spring 2024 Color Pop décor collection, which launched in December 2023, was so popular and well-received that we decided to bring it back for the summer.
Michaels used consumer demand data to inform our buy of the re-stocked collection, which has seen strong demand once again with many of the top performing items from the initial launch continuing to lead in sell-through during the restock.
It’s important for us to balance new and emerging trends with some of our more classic collections, such as our Red, White, and Blue summer collection, that our customers expect from us. For those classic collections, we always seek out ways to integrate a modern spin that’s in line with our research and trend forecasting but still hits on the key elements that our customers know and love.
In addition, we analyze our own consumer demand and insights, plus data on emerging trends from runway fashion, pop culture, and social media to guide our assortment planning through the lens of what we believe our customer will love.
For example, in planning our Seaside Village summer collection, trend forecasting data revealed that both pastel blue and that travel to Italy were trending upward for this year, which influenced the colors and aesthetic of this collection.
What type of results have these efforts produced?
By consistently delivering on-trend and affordable supplies and décor, Michaels is building long term brand loyalty while driving traffic and demand for these items.
One example of this is the recent success of our Nevermore décor collection. The collection went viral for mirroring Taylor Swift’s latest aesthetic from The Tortured Poets Department. The collection overall hit number one in sales and saw more than 100,000 Michaels.com searches for related terms such as 'Nevermore' and 'Nevermore Collection' in the first two weeks it was live.
Overall, the collection is selling through significantly faster than planned, with the top-10 items from the line almost completely sold through.
Are there any future plans for data-driven assortment planning you can discuss?
Michaels is always listening to our customers and our store teams work hard to meet demand with trend-forward collections and assortments. For example, last year, we listened to our customers and kept an eye on their past behaviors which resulted in our earliest Halloween set to-date, and we anticipate an even earlier set date this year to keep up with the growing demand we’re seeing.