Refining the Retail Experience

As the power to process customer data increases, so do the capabilities that retailers have to strategize and engage. For Patrick Klesius ’98, director on the Strategy Team for jewelry designer David Yurman, figuring out what customers want has never been easier.

Through customer relationship management (CRM) tools and artificial intelligence, he sifts through a sea of data to pinpoint inefficiencies and chart the course ahead. Though still in its early stages, it’s already helping them do business differently.

“When [Michael Kors] went into China, we were constantly left with all these mediums and larges,” said Klesius, who previously worked as Michael Kors’ senior director of analytics. “We realized their hands are smaller. We needed to send the extra smalls over there and stop sending the larges, and it worked.”

“[With] AI you can analyze thousands of transactions by location and figure out, hey, you don’t need to send that there. We even use it to position the inventory.”

Klesius measures the impact of gift box color on sales, the ROI of opening a physical store where online sales are successful, and the “earned-media value” of partnering with celebrity ambassadors like Scarlett Johansson and Michael B. Jordan.

The more refined data they have, the better he can troubleshoot potential challenges. He recently helped update David Yurman’s point of sale (POS) system to be compatible with international currencies and enable physical stores to process online orders. Klesius, whose master’s thesis described how computer cooling fans for Chick-Fil-A’s POS system were clogged by airborne grease, described the replacement process as “open-heart surgery for a retailer.”

“It changed the training we had for brand ambassadors in stores. It changed the way we position inventory. We had to go back and hook all this stuff up to the new order management system,” said Klesius. “What we’re doing now is [reviewing] ‘How much did we spend? Did we achieve what we wanted?’ And that’ll be a fun project I’ll get to learn.”

Klesius witnessed high-level brand management while previously working for Ralph Lauren and Michael Kors, where strategy could be as much intuition as analysis. There’s still a little bit of that maverick marketing strategy at David Yurman, but new data-driven insights enable continuous personalization of advertising to specific consumers, allowing them to engage customers more intelligently over time.

“They may come in on the entry point of a silver bracelet, but we want to figure out how we bridge them into a lifetime of being a customer. If you look at apparel brands [like] Ralph Lauren, they have a way to graduate their customers. We do a lot of testing and measuring the results to help make sure we’re doing that right.”

To prepare Auburn students entering the changing retail industry, Klesius made an endowment to the Harbert College of Business to start a class that taught customer-relationship models like Salesforce, a skill he considers essential to entering the industry.

“Now you have to be functional in some marketing CRM tool with a sales component. Salesforce is the new Excel—if you didn’t know Excel [back then], they wouldn’t talk to you,” said Klesius. “Are you able to produce on the first day? On the [hiring] side, we’re really starting to ask those questions. It’s a fundamental shift.”

By Derek Herscovici ’14