Damian mccarthy

For the retailer, the main purpose of the SaksFirst program is to promote excellent customer service. The better the relationship between the customer and the sales associates, the more money loyal customers will spend. Every year there is a triple-point event in the first week of November. That one-day event accounts for the highest volume sales day of the year, higher than the day after Thanksgiving or Christmas. Knowing this, the company understands the importance of the preferred program.

The SaksFirst program can also be used by sales associated as a selling tool. If a customer is uneasy about purchasing large-ticket items, the sales associate can remind the member of the bonus certificate that will return a percentage of the cost. Sales associates are motivated to enroll as many of their customers as they can because they are given incentives such as “lottery tickets” that are redeemed for cash.

DISCUSSION QUESTIONS

1. How does SaksFirst build loyalty for Saks Fifth Avenue versus other upscale retailers (such as Nordstrom)?

2. How effective is the SaksFirst program in developing customer loyalty?

3. Whom should Saks target the SaksFirst program toward?

4. Is the SaksFirst program worth what it spends giving back to customers?

Case A6: Men’s Wearhouse: Adding Complementary Merchandise and Services to Bring Value to Customers

Men’s Wearhouse, Inc. is one of the largest discount men’s apparel companies in North America. The first location of this men’s specialty store was opened in August 1973 in a strip shopping center near Houston, Texas. Thirty years later, Men’s Wearhouse operates 693 stores in 44 states in America and 10 provinces in Canada under the Men’s Wearhouse, K&G and Moore’s brand names.

MERCHANDISE

Men’s Wearhouse sells high-quality men’s clothing at prices 20 to 30 percent lower than department stores. This retailer specializes in suits and other tailored business apparel. Other merchandise offered includes dress shirts, slacks, sports jackets, and sweaters. As many businesses moved to a more casual dress code, Men’s Wearhouse responded by increasing the casual dress code, Men’s Wearhouse responded by increasing the casual business clothing selections in its stores. This retailer offers both national branded attire and its own private-label brands. Men’s Wearhouse also sells accessories such as ties, belts, and shoes. In 1994, the company successfully added Big-and-Tall sizes to its product offerings.

LOCATION

Men’s Wearhouse stores are located in strip shopping centers adjacent to residential areas. This proximity to the shopper’s home is a benefit for customers who must visit the store twice, once to select a suit and a second time to pick up the garment after it has been altered. Locating outside of malls in strip shopping centers allows for a generous store size (between 4,000 and 4,500 square feet) while still controlling costs associated with rent. Executives at Men’s Wearhouse also observed that men prefer to stay away from a crowded mall when shopping for clothing.

PROMOTION

Men’s Wearhouse uses a variety of media to inform and remind customers about its stores, merchandise, and sales events. The company’s founder, Chairman, and CEO, George Zimmer, is the gravelly voiced spokesperson featured in both television and radio advertisements espousing the company’s memorable tag line, “You’re going to like the way you look. I guarantee it.”

SERVICES

Men’s Wearhouse is known for having a well-trained sales staff that can assist customers with their wardrobe selection. In addition to helpful sales associated, each tailored item can be brought back to the store for free pressing when needed. All stores have an in-house tailor to make the necessary alterations to ensure the desired fit for each garment. Another service offered at Men’s Wearhouse is the Perfect Fit Credit Card loyalty program. This frequent shopper program lets repeat customers charge their purchases, earn points toward discount coupons, and save 5 percent on all purchases placed on the card.

GROWTH STRATEGIES

One of the most profitable additions to the services provided by Men’s Wearhouse is the tuxedo rental business. Men’s formalwear has been offered since 1999 in the United States and represented $51 million in sales in 2003. This service offering has been so strong that in encouraged the company to expand the floor space in the stores, move into the dry cleaning arena, and being a test for women’s bridal wear.