Full-price selling depends on knowing your ideal customer - here's how

Any company can claim to know its ideal customer, but winners are the ones who deliver on this knowledge.

The shop floor is the litmus test of any "customer-centric" claim. Too many brands say they are focused on the customer yet move in circles, not forward. Let’s look at what pulls a brand away from its ideal customer, as well as simple, powerful ways to close that gap and drive full-price selling.

A fragmented view of the customer 

Consider Club Monaco. At its height, the luxury apparel brand was cool by association. Italian wool, cashmere, tailored trousers. The definition of accessible luxury.

In 2014, its ideal customer was the aspirational creative-class woman in her late 20s to mid-40s, and Club Monaco ran around 140 stores under Ralph Lauren. Today, run by private equity and down to a fraction of that, it assorts the same silhouettes and fabrics. Meanwhile the customer has evolved, now served by Zara, Good American, and Reformation.

Contrast Aritzia, where stores are packed and financials strong. Its marketing, models, and sales associates all represent who that customer is and aspires to be. Aritzia knows its customer wants "Everyday Luxury," so much so that it trademarked the term. CEO Jennifer Wong started on the shop floor and stays in lockstep with who walks in and why. The brand is expanding aggressively in the U.S.

The gap comes down to two things. Siloed teams hold different views of the ideal customer, especially when no one has to visit the shop floor. And no milestone tells a brand when to reevaluate who its customer is. Every brand should be asking, ‘Who is our ideal customer today? Who are they in a year, or five? The same person, changed, or someone else?’

The assortment on the floor

The assortment on the shop floor needs ground rules to sell at full price. Three of them: a hero product anchors the assortment, a common thread unites it, and outfitting is predetermined so the customer doesn't have to guess. These rules only work when the ideal customer's identity is clear.

Anthropologie assorts to a customer it understands well. She's affluent, between 30 and 55, confident in her style, shops multiple times a season, and browses the whole store. Its hero products are dresses and denim, with collections connected through color, print, and theme. She leaves with a dinner outfit and related accessories in one trip.

Store unreadiness

A brand can know its ideal customer, have the assortment ready, and still miss full-price sales because the store can't support it. In 2017, as head of buying for Ralph Lauren's Lauren brand across the U.K., Ireland and Northern Europe, jumpsuits were all the rage and customers wanted them. We bought heavily, but the stores couldn't display them because the fixtures weren't tall enough. The product sat in the backroom until the right fixtures arrived, shrinking the full-price selling window.

The culprit is a disconnect between merchandising and store planning: the assortment evolved but left store plans and fixtures behind, so customers can't find what they came for. Ralph Lauren's crackdown on discounting is now paying off, and store readiness is a consequential factor.

Our unique experiences with clients have revealed seven distinctions between “customer-centric” and profitable growth. Here are four:

1 - Evolving with the ideal buyer. This isn't a single event; it's a process. Watch emerging trends and follow other consumer-facing industries. Every function should weigh in, because the perspectives differ and each is valuable: e-commerce teams see abandoned cart data, loyalty and marketing teams hold their own signals and store managers are closest to the customer. 

2 - Betting within limits. Every apparel brand must bring fresh ideas to market, so bold, fashion-forward bets are necessary. Use guardrails in the line plan to limit any personal bias of merchants and designers. A 70:30 ratio of seasonless core styles to fashion styles works best.

3 - Auditing the assortment. Audit against clear attributes: a well-defined hero product, common threads, and outfitting standards. Map those against full-price sales and unplanned markdowns. Comp shop and rationalize SKUs often to avoid over or under assorting.

4 - Store readiness and iteration. Add checklists for fixture capacity and marketing/merchandising alignment and install a "store preparation" moment in the product creation calendar. Finally, ensure front-line feedback gets back to merchant teams quickly.

Winning brands stay connected with their customers and deliver with superior assortments and store presentation. Without that, they drift. The four recommendations here are simple, immediate, and help maximize full-price sales. The difference between going in circles and moving upward is recognizing an ideal customer who keeps evolving. So how sure are you of tomorrow's ideal? 

Retail Strategy Group is led by Raj Dhiman, PhD, and Liza Amlani.