From November 2007

By Faye Brookman

When Coldwater Creek initially decided to open bricks-and-mortar stores, management knew it had to be dead-on in its selection of sites. In addition to the usual risks, the company couldn’t afford to make mistakes with locales that would sap catalog or Internet sales.

Today, the $1.1 billion multi-channel women’s apparel company has been able to grow all facets of its business – catalog, Internet and retail doors – due to its ability to target customers with laser-like precision. In-store sales now account for nearly two-thirds of overall sales, and Coldwater Creek’s $38 million investment in its direct-marketing tool is driving shoppers into stores.

“We were a direct marketer at heart, so when it came time from a corporate strategy to brand out into retail space, we needed tool sets to do it,” says Carl Brenner, manager of statistics at Coldwater Creek. “Through different technologies, we can take advantage of our rich direct marketing customer preferences as well as demographics.”

One of the company’s greatest strengths has always been the ability to mine customer data (it has tracked every customer purchase since 1997), particularly as a tool to zero in on store growth markets. To leverage that data, Coldwater Creek uses location intelligence technology.

To analyze buying behavior, Coldwater Creek partnered with Pitney Bowes MapInfo to apply psychographic and demographic research. This information helps better serve existing shoppers, while also reaching potential customers with similar lifestyle habits, because marketing messages can be tailored to speak directly to their interests.

Coldwater Creek has more than 250 stores, and the MapInfo solution has been used to select the vast majority of locations. The chain is on target to open 65 stores in fiscal 2007, including a flagship location on Manhattan’s Upper East Side.

Like many merchants, Coldwater Creek is seeking new opportunities in lifestyle centers as well as thriving downtown locations. Location intelligence helps determine where stores should be located, where sales are surging – and where they aren’t – where the “best” customers are and how to reach more of them.

Scenarios can also be created that address impact if a competitor builds a store in the area, or even if a hurricane passes through the location.

Coldwater Creek believes its world-class customer service has allowed it to prosper even in markets where competitors have been forced out. “The understanding of demographic space offers an opportunity to further differentiate and position ourselves and continue to seize market share despite the challenging market conditions,” Brenner says.

Meeting LEED standards
With pressure to grow sales by opening more stores and improving results at existing stores, information intelligence is coming into play.

“In retail, you’ll see more people putting stores a lot closer and you have to understand shopping patterns and balance same-store sales and growth,” Brenner says. MapInfo helps because the technology is easy to use and can be maintained with internal departments or totally operated by Pitney Bowes.

Location intelligence also is proving instrumental in meeting LEED (leadership in energy and environmental design) standards for Coldwater’s new “green” store initiative; the retailer is using MapInfo to identify store locations that are close to public transportation or easy to reach on foot.

According to Brenner, Coldwater Creek is part of a pilot program for developers to achieve green certification.