The Challenge of a Huge Bargain and Complex Fulfillment
Charles Tyrwhitt's Investment
Nick Wheeler was willing to invest big in customer acquisition. A New York Times FSI is not had for peanuts. Printing a full-color, 36-page, 7-1/2" x 10-1/2" catalog is expensive as hell. Compound this with $160 shirts being offered at 25 percent of retail, and you have an entrepreneur playing very high-stakes roulette.
For Charles Tyrwhitt, here was a serious effort to acquire American customers. As subscribers to The New York Times, we are obviously upmarket.
For us new customers, it was an opportunity to try out Tyrwhitt's products and his service. If he passed the test, we would be long-term clients.
This is the classic direct marketing model. In the words of the late, great Joan Throckmorton:
As direct marketers, we're not here primarily to make a sale; we're here to get a customer. Sales are important, of course. (Where would marketers be without them?) But the name of the game is repeat sales rather than one-shots. And to have that, you need a customer.
The SKU Conundrum
Managing Stock Keeping Units (SKUs) is the greatest challenge to a retailer. For a purveyor of shirts, here are six variables that make up a single SKU:
- White shirt
- Herringbone weave
- 17" collar
- 35" sleeves
- Button cuffs
- Classic fit
The same shirt with 38" sleeves is another SKU.
The same shirt with an extra-slim fit is another SKU.
The same shirt with holes for cuff links is another SKU.
Offering hundreds of different shirts, ties, suits, outerwear, shoes and women's wear, Tyrwhitt is dealing with several thousand SKUs. How many of each SKU can he stock without going broke?
CRM—Customer Relationship Magic—Is Cheap
I think I am a reasonable person. If Tyrwhitt runs out of the 17" collar shirt I ordered, I understand completely.