Fashion oops show

It's eight in the morning at a Tony Shopping Center in downtown Pittsburgh. The stores are quiet and, for the most part, dark. All, that is, but the K.Barchetti Shops. At this swanky retailer of menswear and women's accessories, class is in session.

Against a backdrop of Italian half boots and pricey loafers, Katherine Barchetti dictates strategy and reels off statistics with the command of a modern-day Patton. Mind you, Barchetti has an edge that the general could not have imagined: a computer database that allows her to command her troops and market to customers with unassailable precision.

Barchetti, a 47-year-old grandmother who darts around on three-inch velvet heels and fly-fishes in her spare time, conducts sales training sessions twice each week. She begins by handing out folders crammed with meticulous analyses of sacs projections, performance, and marketing activity, afl broken down into daily, weekly, and quarterly reports.

Lately, one category of "information" seems to obsess Barchetti above all. "Addresses," she repeats over and over. "If you can't get the addresses, you can't work here."

Barchetti has been called one of the best retailers in the nation. Raised on farms and married at 17, she opened her first store in Greensburg, Pa., at the age of 21. Today, the K.Barchetti Shops in downtown Pittsburgh -- which consist of a 3,500-square-foot men's store and a 1,500-square-foot women's store -- average sales of $720 per square foot.

Despite the limited market here for high fashion, Barchetti's sales were up 15 percent last year, to $2.4 million, and are projected to rise a further 27 percent in 1994, to $2.7 million. The average sale is $206; her best customer purchased $62,000 worth of clothing here last year,

Her enterprise is so efficient that on a recent visit to her men's store, a Saks Fifth Avenue manager was quietly poking around "to see what the competition is up to."

"Katherine Barchetti is the best retailer I've ever seen in more than 800 cities," says Robert Sprague, a retail consultant based in New Hampshire. "She is uncompromising in her commitment and focus on her customer. And she is the only retailer I've ever met who uses her computer as a marketing vehicle. Who is her best shirt customer? Who likes Gene Meyer ties? Who is really into suits in the fall? Ask her any of those questions, and she'll tell you instantly. Or she won't.... But she'll know."

Barchetti and her employees never forget a face or a shirt size. When she opened her first store in 1969, Barchetti started to keep index cards on her customers, recording their names, sizes, style preferences, and buying habits.

Six years ago, Barchetti's late husband, a former engineering professor, designed a software program to assemble a database of her 28,000 customers and track each of the 30 classes of merchandise she carries. It contrasts sales in each class with those of the previous year and influences her choices on in-store and window displays. The software also compiles histories of every object she ever purchased and lets her staff find out immediately if a particular jacket is in stock in a size 42, and if so, where.

Barchetti's database does the work of direct-mail houses. It can spit out a list of every man who ever bought a Hugo Boss suit from her and invite those customers to a fashion show featuring his clothes. It can market directly to men who buy suits with commas in their price tags or to women with a passion for shoes by Donna Karan. "I've cut my public relations and advertising costs in half and haven't run a magazine ad in years," she says. "I go straight to my customers."

But nothing in 25 years of business, Barchetti says, equals the impact of her latest database-driven initiative: Operation Oops! "It's the most effective marketing I've ever done," she says.

Oops! is a war being waged on two fronts. First, there is the battle of the addresses. "What I thought was great was, in fact, a 40 percent effectiveness rate," she says.

Reaching her customers directly had become so integral to her fortunes that Barchetti laid down the law last November. From then on, her employees' performances have been judged on their rate of getting customer addresses. They do this at the cash register, recording the address in a customer's file, along with his name and each of his purchases (including color and size), as well as his favorite radio station (so Barchetti will know where to run her radio spots).

Barchetti insures compliance with carrot-and-stick motivation. She pegs bonuses to near-perfect rates of asking for addresses (her 22 staffers earn salary plus bonuses based on sales and marketing efficiency; they do not work on commission). She also hands out free lunch coupons to her employees following days when every customer's address makes it into the database.

Just in case those perks don't jog her staffers' memories come cash register time, she upped the ante with a threat: Any employee who falls below an 85 percent effectiveness rate in getting customer addresses will lose his job. Clients who worry about giving out their addresses are assured that Barchetti does not sell her lists. If they still refuse, the salesperson is not penalized. What is important is that they remember to ask every customer for an address. "So far, I haven't had to fire anybody," she says, several months into the program. "Our average rate of obtaining addresses is 99.6 percent."

Jeff Potter, a 28-year-old salesman in the suit and men's shoe departments, says "people rarely say no" when he asks for their address. "I explain that we're helping them by sending information about sales," Potter says.

Operation Oops!' second front addresses a perennial problem: bringing back lost customers. Barchetti knows that it's much more expensive to lure a new customer than to keep an old one. Again, the database proved a gold mine: She compiled a list of customers who had not bought anything from her for at least 12 months, Out of 28,000 customers came a tally of 11,000 lost shoppers. Those for whom she had addresses -- just 4,345, to Barchetti's disappointment -- were sent a white envelope emblazoned with an eye-catching "Oops!" Inside was a postcard with the message, "If something about your last visit to K.Barchetti Shops was less than perfect...here's your chance to tear us apart."

The card included a variety of reasons why someone might have stopped shopping at K.Barchetti. Recipients could check off such options as "I hate your prices" to "I stayed away because I gained weight." To emphasize the positive, Barchetti added another category: "I would come back if ...," with responses that cleverly advertised such benefits as "I had known your alterations on full-price merchandise were now free." She also left a blank space for individual comments. Barchetti paid the postage for each postcard. To entice these lost customers back into her store, she threw discount coupons for her merchandise into each Oops! envelope.

Like boomerangs, 427 Oops! cards came flying back -- supplying a wealth of cheap market research. As a result of complaints about the dim lighting in her women's shoe department, for example, she decided to relight the entire women's store. What's more, 306 of these former customers showed up, coupons in hand, to purchase $58,000 worth of K.Barchetti clothing.

Barchetti knows, because her database told her so! Barchetti's database marketing has enabled her to squeeze the maximum possible profit out of her two stores. It has allowed her to sell the notoriously conservative Steel City on such finery as $1,295 Zegna suits and $295 women's sandals from Romans, France. This year, she audaciously ordered men's jackets in the funkier three-button style rather than the standard two-button version. "We need to move this city forward!" she says.

After Barchetti concluded her morning training session, employee Susan DePasqua called a customer whom she had a hunch would like a new red silk jacket by Gianni Versace. She looked up the client's telephone number in the database and called to let him know about the jacket. By the time he arrived, DePasqua had laid out several outfits that she suspected would suit his taste. "Susan knows my name, what I'd like, and my sizes -- which I don't even know," said the customer, who snatched up the Versace along with a Donna Karan suit, several shirts, and some ties, for $2,000. "I buy just about everything here now."

Meanwhile, in a back room, Barchetti pores over Oops! cards and plots new uses for her computer. "The database has become the hub of this company," she says. "It lets me shoot a.22 into the heart of anyone I want."

COPYRIGHT 1994 Success Holdings Company, LLC
COPYRIGHT 2004 Gale Group