While at breakfast in Hong Kong, I overheard three buyers from a major retailer arguing over what type of customer shops their stores. The conversation started with the statement that their typical customer is a 50-year-old woman. The woman, they continued doesn’t shop for herself, but instead buys the inexpensive stuff for her kids because she would rather spend more on brand-name products for herself. Then one of the buyers argued that she’s wasting her money because everyone knows that branded product is made in the same factories as non-branded. Therefore the customer shouldn’t care less and should just shop for the best price.
I hope that we all engage in conversations like this as a way to better understand our customer base and the products we choose to sell to them. Unfortunately, at the end of the day, like most of us, they gave up in frustration and started to talk about other things. The end result was no consensus and no shared view of their customers’ demographics.
Why the confusion? People used to be simple. They bought according to what they could spend, and their choices were largely based on their age and economic status. Well, those simple metrics don’t work anymore. People will get up in the morning and drive miles out of their way to the nearest Starbucks while on their way to shop Wal-Mart. This seems contradictory to what some people think. So, at the end of the day, how is a retailer supposed to understand their customers when their customers don’t seem to make sense?