Facing dramatically declining sales and decreased turnover, retailers such as Saks Fifth Avenue and JCPenney are rethinking
Question:
Facing dramatically declining sales and decreased turnover, retailers such as Saks Fifth Avenue and JCPenney are rethinking their pricing strategies, scaling back inventories, and improving the fashion content. Men’s accessories are one of the bright spots and Saks Fifth Avenue has jumped on the trend with three recently opened shops prominently featuring this category. The largest men’s store opened in Beverly Hills in the late 2008 and stocks top brands in jewelry, watches, sunglasses, and leather goods. By providing a better showcase for men’s accessories, Saks aims at strengthening its position in a market that is often neglected in the larger department store arena. This is because the men’s accessories business generally requires expertise in buying since this typically involves small, artisan vendors – an investment many department stores are not willing to make. The Beverly Hills store was chosen to spearhead the accessories program because it is considered the company’s West Coast flagship and the department had not had a significant facelift since the store opened in 1995. Saks’s strategy seemed to be successful if one considers that the newly opened boutiques already exerted an impact on sales during their first holiday season. However, before opening accessories shops in any other existing Saks stores, the company wanted to gain further insights into their customers’ preferences. Consequently, a survey was conducted among visitors of the Beverly Hills store to gain a deeper understanding of their attitudes to buying and shopping. Overall, 180 respondents were interviewed using mall-intercept interviewing. The respondents were asked to indicate the importance of the following factors when buying products and services using a 5- point scale (1 - not at all important, 5 - very important): • Saving time (x1) • Getting bargains (x2) • Getting products that aren’t on the high street (x3) • Trying new things (x4) • Being aware of what companies have to offer (x5) The resulting dataset Buying Attitudes.sav also includes each respondent’s gender and monthly disposable income. Questions (When answering questions, please include output files or output images that support your answers.) 1. Given the levels of measurement, which clustering method would you prefer? Carry out a cluster analysis using a procedure that you would prefer. 2. Interpret and profile the obtained clusters by examining outcome files. 3. Use a different clustering method to test the stability of your results. For example, if you used K-means for the previous question, use a two-step approach and vice versa. If necessary, omit or rescale certain variables. 4. Based on your evaluation of the dataset and cluster analysis outputs, make recommendations to the management of Saks’s Beverly Hills store.
| x1 | x2 | x3 | x4 | x5 | gender | income |
| 3 | 3 | 4 | 3 | 4 | 1 | 2884 |
| 3 | 3 | 5 | 4 | 3 | 1 | 2893 |
| 2 | 2 | 3 | 4 | 5 | 1 | 3668 |
| 4 | 3 | 4 | 5 | 4 | 1 | 796 |
| 3 | 1 | 4 | 5 | 4 | 1 | 2980 |
| 3 | 2 | 3 | 5 | 4 | 1 | 3102 |
| 2 | 3 | 3 | 4 | 3 | 1 | 1932 |
| 3 | 3 | 4 | 4 | 4 | 1 | 2475 |
| 3 | 3 | 3 | 5 | 4 | 1 | 1999 |
| 3 | 3 | 4 | 3 | 5 | 1 | 2172 |
| 2 | 3 | 5 | 5 | 3 | 1 | 2228 |
| 3 | 2 | 5 | 5 | 5 | 1 | 1856 |
| 3 | 2 | 4 | 3 | 3 | 0 | 1410 |
| 3 | 1 | 5 | 4 | 4 | 0 | 2031 |
| 2 | 3 | 4 | 4 | 5 | 0 | 2662 |
| 2 | 3 | 4 | 5 | 4 | 0 | 2175 |
| 3 | 2 | 4 | 4 | 4 | 0 | 2303 |
| 4 | 3 | 5 | 4 | 5 | 0 | 1408 |
| 2 | 2 | 5 | 5 | 5 | 0 | 2159 |
| 2 | 4 | 4 | 4 | 4 | 0 | 3115 |
| 3 | 3 | 4 | 4 | 3 | 0 | 2284 |
| 3 | 3 | 4 | 4 | 4 | 0 | 2928 |
| 3 | 3 | 5 | 4 | 5 | 0 | 2176 |
| 3 | 3 | 5 | 5 | 2 | 0 | 3080 |
| 4 | 3 | 4 | 4 | 5 | 0 | 1921 |
| 3 | 3 | 5 | 4 | 4 | 0 | 1626 |
| 1 | 3 | 5 | 4 | 5 | 0 | 2564 |
| 3 | 1 | 5 | 5 | 5 | 0 | 1611 |
| 3 | 2 | 3 | 4 | 3 | 0 | 2928 |
| 2 | 3 | 5 | 5 | 5 | 0 | 2390 |
| 2 | 3 | 4 | 5 | 4 | 0 | 3024 |
| 2 | 3 | 4 | 4 | 5 | 0 | 2060 |
| 3 | 3 | 4 | 4 | 3 | 0 | 2617 |
| 2 | 2 | 5 | 4 | 4 | 0 | 1814 |
| 4 | 3 | 3 | 4 | 4 | 0 | 2133 |
| 4 | 3 | 4 | 5 | 4 | 0 | 1595 |
| 2 | 2 | 4 | 5 | 2 | 0 | 3649 |
| 3 | 3 | 5 | 5 | 4 | 0 | 2336 |
| 2 | 2 | 5 | 4 | 5 | 0 | 3560 |
| 2 | 3 | 5 | 5 | 4 | 0 | 1914 |
| 4 | 4 | 4 | 5 | 5 | 0 | 2375 |
| 1 | 3 | 5 | 5 | 3 | 0 | 2852 |
| 4 | 4 | 3 | 3 | 4 | 1 | 1102 |
| 4 | 5 | 3 | 4 | 3 | 1 | 1354 |
| 2 | 4 | 2 | 5 | 5 | 1 | 732 |
| 4 | 5 | 3 | 3 | 5 | 1 | 1807 |
| 3 | 5 | 3 | 3 | 4 | 1 | 1229 |
| 1 | 4 | 2 | 3 | 5 | 1 | 989 |
| 3 | 5 | 3 | 4 | 4 | 1 | 990 |
| 3 | 4 | 2 | 3 | 5 | 1 | 1499 |
| 1 | 5 | 4 | 4 | 5 | 1 | 727 |
| 2 | 4 | 4 | 5 | 5 | 1 | 658 |
| 3 | 5 | 2 | 3 | 4 | 1 | 1115 |
| 4 | 5 | 3 | 4 | 4 | 1 | 1164 |
| 2 | 3 | 2 | 4 | 4 | 1 | 1303 |
| 4 | 4 | 2 | 4 | 5 | 1 | 1682 |
| 2 | 5 | 1 | 4 | 3 | 1 | 1130 |
| 2 | 4 | 3 | 4 | 4 | 1 | 1476 |
| 2 | 5 | 4 | 3 | 5 | 1 | 1365 |
| 3 | 4 | 3 |
Expert Answer:
Sakss Beverly Hills Cluster Analysis Introduction Customers consider various factors in making their purchasing decisions Some factors may be more critical to the customers than others The differences ... View the full answer
Supply Chain Management Strategy Planning and Operation
ISBN: 978-0133800203
6th edition
Authors: Sunil Chopra, Peter Meindl
