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Executive Summary New York Running Company

Soraya Eltomey Keren Golan Nicholas Przybyla Enze Wang August 3, 2011 Team #4

Page |2 Executive Summary Team 4 conducted market research to determine the success rate and customer retention of a particular store in New York City. It chose to study the New York Running Company, located on the second floor of the Time Warner Building in Columbus Circle, by tracking the number of customers who walked into the store in relation to the number of customers who walked out without a New York Running Company shopping bag. Our research indicated that the store might need to work on its customer retention practices given roughly 85% of those observed that entered the store decided not to make a purchase.

At this point in time, it can only be assumed that it is the customers experience in the store itself that discourages him or her from making that final purchase. For instance, the sales associate may not have been welcoming and/or attentive enough to the customers entering the store. Another instance could be that the store fails to offer a wide variety of items so the customer may not be finding exactly what he or she wants.

Recommendation to Management Team 4 recommends the New York Running Company conduct further primary quantitative research to determine the exact reason why it is unable to retain the customers it initially attracts into its Time Warner store location. The company should survey its existing customer pool to determine satisfaction with the companys service, variety of items offered, price and so forth.

It is recommended the New York Running Company conduct similar market research studies at their other less touristy locations to see if they are able to retain customers as well as they attract them. As this particular spot is located in one of the citys most notable tourist attractions,

Page |3 many customers may just be window shopping and not initially realize how expensive a number of the items at the New York Running Company cost.

Activity Studied The New York Running Company is solely devoted to the art of running with its target market obviously consisting of running enthusiasts. It prides itself on providing expert staff that educates runners on all aspects of the sport and support local running events and care for our communities. With the expertise and customer service the New York Running Company provides, one could only assume avid runners would want to purchase their running gear from this outlet.

With only three locations New York, it is easier to track the number of purchases for a given period of time in one location. We chose a specialty store with a limited number of locations under the assumption that if a customer left that particular store without making a purchase; it was that the company on a whole did not fulfill that customers needs. As a result, the customer will either shop elsewhere for his or her desired item or not purchase the item at all.

The team observed the entrance to the Time Warner store location from afar to determine the number of customers entering and leaving. It strategically planned its observations of the store throughout various times of the day in addition to multiple days of the week.

Page |4 The following is the layout of data was recorded: Date Day of Week Start Time # of People Entering Store # of People Leaving without Store Bags

Hypothesis Team 4 hypothesized that the New York Running Company would generate a low purchase rate when compared to the number of customers that walk into a store on a given day. As the team had studied a specialty store that generally sells high-end items that require a consumer to make educated purchases, many customers may feel the need to shop around and compare the pricing at similar stores before making that final purchase. Although the New York Running Company is a specialty store geared towards running enthusiasts, the items offered at the store are not all that unique. Given that New York City is comprised of a number of stores offering the same items for a lower cost, many customers may feel that they could find a better deal for the same quality item elsewhere. Furthermore, as the New York Running Company is located in one of the citys most notable tourist attractions, many customers may just be window shopping and not realize how expensive a number of the items at the New York Running Company cost.

Results of Study As previously mentioned, 85.01% of customers observed that entered the store did not make a purchase. Of course, this data indicates that only 14.99% of customers that entered the store did in fact make a purchase. To analyze the data, an attribute p-chart was created that measures the number of errors or non-purchases (r) that occurred in each sample of n customer visits. 20 samples are taken between June 27 and July 20 with a total of 1721 observations made. Of that

Page |5 number, 1463 customers walked out of the store without a New York Running Company shopping bag. After determining the average number of purchases made, the team set its upper and lower control limits. As one can see below, there were no total purchases made per sample that fell below the lower control limit or above the upper control limits. This indicates that there were no special causes of variation.
100% 95% 90% 85% 80% 75% 70% 65% 6/27 6/29 7/1

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7/9 7/11 7/13 7/15 7/17 7/19