Developing Exclusive Fashion Assortments Using Consumer Insight
Developing Exclusive Fashion Assortments Using Consumer Insight
White Paper June 2012
Developing Exclusive Fashion Assortments Using Consumer Insight
Introduction The landscape of the retail industry is changing rapidly. With the overall industry growing at only 3-4% per year (according to the National Retail Federation), retailers and brands are in a constant tug-of-war to gain share. Certain categories are growing faster than others, and the players need to ensure they are well-represented in these categories while reducing their investments in slower growth areas. There are also new players in the game. In May 2012, Amazon announced it plans to enter the high fashion business. Fashion retailers are concerned that they will become “showrooms” for Amazon, similar to what has occurred with Best Buy in electronics. And their concerns are not unfounded. Comscore recently published a study indicating the leading mobile retail activities among people using smartphones: finding a store (33%), comparing prices (21%), and looking for deals (20%). How can brands and retailers avoid commoditization and actually win in this environment? The solution lies with retailers and brands coming together to identify the specific products most desired by the customer base of each retail channel. By developing exclusive product assortments by retailer, brands preserve margins and retailers maintain differentiation. To make these decisions using data versus intuition, new tools are needed to understand what the customers of each retailer want and the price differential they are willing to pay. This white paper discusses how brands and retailers can apply predictive analytics to consumer data to identify which products are most valued by their customers and develop exclusive assortments with confidence.
First Insight, Inc., 2012
www.firstinsight.com
1
Developing Exclusive Fashion Assortments Using Consumer Insight
The Challenge “New products and expansion into new categories remain the leading drivers of revenue growth,” according to a recent Gartner study of 87 apparel manufacturers, wholesalers and retailers published in Apparel Magazine on June 1, 2012. “It is no surprise that a significant number of new product launches are deemed failures. Top reasons for failures include product cost issues, being late to market or missing demand, and experiencing inventory shortages that lead to supply disruptions and missed market and trend opportunities.” Markdowns and out-of-stocks are costing retailers billions of dollars each year. Retailers make deep buys of products consumers don’t want, resulting in heavy markdowns. Conversely, they often don’t accurately forecast the winners, resulting in missed opportunity. Manufacturers and retailers of fashion products have long enjoyed high margins because of the emotional appeal of these products. Retailers maintained differentiation through the types of products they carried along with the methods they used to present and merchandise the items. Consumers traveled to the retailer, largely with little or no product or competitive knowledge, browsed the collections, obtained input from sales associates, and ultimately made their purchases. The time and cost to make those decisions was high, and as a result, consumer purchase intent was also high. With today’s technology, many consumers now do their browsing online. With a few clicks, shoppers can research products, compare pricing, and find where to buy them. A 2010 Pew Research study showed that 58% of consumers research online prior to making a purchase. After researching online, consumers then visit the retailer, try on or “feel” the merchandise, and execute the transaction, often at the retailer but many times online. In this scenario, the cost of switching to a different brand or channel is extremely low. “Brand switching” often happens online, during the research stage, before the consumer gets in the car to drive to the mall. “Channel switching” can happen at any time –online, while in the store (if the customer finds a lower price online via a mobile device), or after the visit (if the consumer cannot find the right size or color in the store). With Amazon in the fashion picture, the industry is understandably concerned that if every product is available on Amazon, margins will drop for the brands, and retailers will lose the opportunity to differentiate themselves. If this happens, the entire industry will be commoditized. Is there a way to avoid this “Armageddon” scenario? Perhaps. Each major retailer has a large base of loyal shoppers, and these shoppers go out of their way to patronize their favorite store. A customer may shop for a brand, for example, but the specific products they desire differ based on the retailer. Each store’s customer base has its own unique set of characteristics. Retailers understand this and often talk about “our customer”. Brands also have loyal customers. Once a customer has emotionally invested in a certain brand, the brand’s customer keeps coming back, looking for what is being offered next. But even though people are loyal to brands, their shopping patterns for those brands differ by retail channel. How can brands and retailers come together and find a win-win?
First Insight, Inc., 2012
www.firstinsight.com
2
Developing Exclusive Fashion Assortments Using Consumer Insight
The Solution – Exclusive Assortments, Valued Accordingly The solution to this challenge is to provide assortments that are exclusive to the retailer; that is, products which are unique and differentiated for that retailer and are valued accordingly. With this model, shoppers would not be able to find the same merchandise at multiple retailers regardless of whether they shop in stores or online. Furthermore, when they find the products they want at the retailer they enjoy patronizing, the products are priced so that they deliver the value the consumer expects. For example, those who like to shop at Nordstrom would find the apparel lines they like, at the right price points, and their loyalty would remain with Nordstrom. Those who prefer to buy online, meanwhile, could shop the retailer’s website, since they would find the same merchandise they find in the stores. This would also hold true for Amazon: the brands would create a line for Amazon which is differentiated from the lines that are offered in the retail outlets. If a retailer has the right products for each channel, the number of products selling through at full price would be higher, creating a winning scenario for the entire ecosystem.
Traditional Methods of Developing Exclusive Product Lines Offering exclusive product assortments has been an established strategy for years, but often without good data on what styles each retailer’s consumers really want. Retail merchants often guess, and give guidance to the brands, who apply more guesswork. “Vendors have their own agendas, and frankly they are not always right on what a store needs”, said Warren Shoulberg in a recent article in “The Robin Report”. The typical process is a two-step product “editing” or selection process (see Figure 1 on next page). In the first step, a manufacturer shows its candidate exclusive styles to a retail merchant. This step naturally requires the manufacturer to narrow down the choices based on the brand manager’s belief of what will sell through that retailer. As a result, this process has the potential of leaving out some styles that could have been winners. In the second step, the merchant decides which of the candidate styles will become part of the exclusive product line. Because the merchant was only presented with a subset of the candidate styles, the merchant does not know what other options could have been successful. Also, most merchants at this stage use their intuition and experience to make their selections, rather than using data obtained from real-time direct customer feedback.
First Insight, Inc., 2012
www.firstinsight.com
3
Developing Exclusive Fashion Assortments Using Consumer Insight
Figure 1 – Typical Process for Developing Exclusive Assortments
The challenge with this approach is that if an error is made in an exclusive line early in the process, this error cascades from the manufacturer to the retailer, and the “cost pools” get progressively larger. One First Insight customer has indicated that by the time a new style is rolled out to its store chain, a mistake costs over 18 times what it would have cost if it had been eliminated at the design selection stage. The second and even larger challenge with this approach is missed opportunity. By missing a style that could have been a winner, retailers and brands lose significant potential revenue. One First Insight customer was able to identify its top selling dress of all time using the First Insight solution. This was a dress that had been missed by its previous merchandise selection and storetesting approach. Given this, how can a brand know what a retailer’s customers want when they don’t even sell directly to these customers? Further, how do they know the price sensitivity of each retailer’s customers? There are ways in which retailers and brands can work together to determine the specific styles that resonate with each retailer’s set of consumers, and how to price them, well before manufacturing and buy commitments are made.
First Insight, Inc., 2012
www.firstinsight.com
4
Developing Exclusive Fashion Assortments Using Consumer Insight
Using First Insight to Create Exclusive Products First Insight’s software-as-a-service platform uses online consumer engagements to let retailers and brands identify which new products to invest in, which products to avoid, and how to price winning products. The solution also helps companies know the product attributes that are getting consumers excited about these products. First Insight applies a predictive analytic model to consumer data to provide a forward-looking view of new styles, even while still in the design stage. In fact, Gartner, the world’s leading information technology research firm, recently named First Insight as a “Cool Vendor in Retail” and named First Insight in its “Retail Handbook for Becoming Demand-Driven” for 2012 The reports discuss the benefits of the First Insight solution to both retailers and manufacturers: “Although there are specific retail implications, manufacturers and product designers should take an interest in understanding how the wisdom of crowds can return highly relevant advice on new product success in the market” – Gartner, Cool Vendors in Retail for 2012 (April 2012) Through online games generated by the First Insight solution, the consumer is presented with an opportunity to “be the buyer” for that retailer or brand. Response rates are extraordinarily high, even without incenting the consumer to play. Why? Because consumers want to engage with the brands and retailers they like. How does this help in determining which exclusive brands will sell through each channel? Brand manufacturers can partner with retailers to evaluate potential exclusive styles using a four-step approach:
Figure 2 – First Insight Approach
1. Select candidate items As mentioned earlier, typically the manufacturer will perform the initial editing of the product set and will present a reduced set of candidate items to the retailer.
First Insight, Inc., 2012
www.firstinsight.com
5
Developing Exclusive Fashion Assortments Using Consumer Insight With First Insight, the manufacturer partners with the retailer to run an Insight on a much larger set of candidate items, or even on the manufacturer’s entire new offering for the category. The manufacturer loads images or even CAD drawings or sketches of candidate new products into the First Insight platform, along with a brief description and target MSRP for each item. One First Insight customer now takes images of hundreds of candidate styles in Asia, well before manufacturing begins. These images are loaded into the First Insight system for testing. Prior to using First Insight, a much smaller set of items were chosen by the merchants for in-store testing, due to the cost and time involved. 2. Engage consumers The key in identifying the optimal exclusive line is consumer engagement. Once the candidate new products are loaded into the First Insight system, the solution engages consumers through online games presented via web, social media, or email. There are two alternatives at this stage: a. Launch engagements targeted specifically to consumers of each retail channel individually. This way, the results of the Insights will reflect the preferences of the targeted retailer’s customer base. The most frequently used method for this approach is to launch Insights to the retailer’s email database. b. Seed each Insight with reference items which are known good and poor performers within the retailer’s collection. When respondents correctly identify the reference items, they are identified as good predictors of the types of products that retailer’s customers desire. These “predictors” are weighted more heavily in the First Insight analytic model. During the online games, consumers provide preference and sentiment information, along with the price points at which they believe the products will sell. The data is collected in a secure area within First Insight’s cloud-based platform. 3. Apply Predictive Analytics Within 72 hours, the results of the consumer engagements are compiled and First Insight’s analytic models are applied. Open-field sentiment comments are aggregated using a proprietary word cloud technology which identifies the most frequently made statements about the product. Respondents are filtered and weighted based on a number of criteria, including accurate identification of reference items as explained in Step 2. 4. Gain Insight Results are displayed in an easy-to-use dashboard format. Retail merchants and brands can see which specific product designs and attributes resonate with the customers of each retailer, which elements are most valued, and how to price products to capture the value and complete the sale. Through viewing product comments, designers can modify the designs and re-run tests to gauge whether performance improves.
First Insight, Inc., 2012
www.firstinsight.com
6
Developing Exclusive Fashion Assortments Using Consumer Insight The solution also provides guidance on optimal entry price points for the products. Also, based on the target costs for the new products and the retailer’s markdown cadence, the lifecycle gross margin percent of each item is calculated, along with the price which will maximize overall gross margin. Brands can use this capability to determine where to set MSRP, and can make go/no-go decisions on products based on the margins each item will bear. Retailers can use this information to negotiate with vendors and to set pricing and markdown cadences.
Figure 3 – First Insight Output
Additional Benefits for Brands – Entering New Categories In addition to selecting the items for inclusion in the exclusive assortments, the First Insight solution can also be used for “white space” analysis to identify new categories for a brand to enter. For example, a clothing manufacturer may want to leverage its brand into a new category (e.g. Under Armour leveraging its compression shirt brand into athletic shoes). Mock-ups of the new branded items can be loaded into the First Insight solution and tested alongside existing competitive items in the same category. In this case, prior to launch, Under Armour can test mock-ups of its running shoes with its logo against Nike and Reebok shoes.
First Insight, Inc., 2012
www.firstinsight.com
7
Developing Exclusive Fashion Assortments Using Consumer Insight This same methodology could be used by a brand to understand how best to serve its many channel partners. For example, 7 for all Mankind can determine the right products and price points for Nordstrom, Macy’s , Saks, Neiman Marcus and even Amazon. Just as Important: When to Exit a Category Since fashion trends change rapidly, brands and retailers need to reduce the entire cycle time from concept to cash. As important as knowing when to enter a category is knowing when to exit. The First Insight solution can be used to continue to evaluate the forward-looking demand for products to assess whether a category is trending up or down. Having advance information enables retailers and brands to make shifts in designs and react to fast-moving consumer preferences.
Conclusion As the market shifts and consumers become even more empowered and fickle, merchants and brand designers must adapt to align with these new realities. Historically, merchants have relied on experience and intuition and have been resistant to adopt technology and use data in their decision-making. New tools now provide the ability to incorporate real-time consumer feedback into the product development process. Using First Insight’s solution, retail merchants and brand designers can work together to construct the optimal exclusive brand line-up for each retailer, maximizing margins while providing the best customer experience and engagement possible. It is a true competitive advantage. They can also work together to identify new categories which hold the most promise for new exclusive assortments. With actionable data, the brand and retailer can provide a better, more tailored assortment to their customer base that is unique to that retailer in a more profitable way.
First Insight, Inc., 2012
www.firstinsight.com
8
White Paper June 2012
Developing Exclusive Fashion Assortments Using Consumer Insight
Introduction The landscape of the retail industry is changing rapidly. With the overall industry growing at only 3-4% per year (according to the National Retail Federation), retailers and brands are in a constant tug-of-war to gain share. Certain categories are growing faster than others, and the players need to ensure they are well-represented in these categories while reducing their investments in slower growth areas. There are also new players in the game. In May 2012, Amazon announced it plans to enter the high fashion business. Fashion retailers are concerned that they will become “showrooms” for Amazon, similar to what has occurred with Best Buy in electronics. And their concerns are not unfounded. Comscore recently published a study indicating the leading mobile retail activities among people using smartphones: finding a store (33%), comparing prices (21%), and looking for deals (20%). How can brands and retailers avoid commoditization and actually win in this environment? The solution lies with retailers and brands coming together to identify the specific products most desired by the customer base of each retail channel. By developing exclusive product assortments by retailer, brands preserve margins and retailers maintain differentiation. To make these decisions using data versus intuition, new tools are needed to understand what the customers of each retailer want and the price differential they are willing to pay. This white paper discusses how brands and retailers can apply predictive analytics to consumer data to identify which products are most valued by their customers and develop exclusive assortments with confidence.
First Insight, Inc., 2012
www.firstinsight.com
1
Developing Exclusive Fashion Assortments Using Consumer Insight
The Challenge “New products and expansion into new categories remain the leading drivers of revenue growth,” according to a recent Gartner study of 87 apparel manufacturers, wholesalers and retailers published in Apparel Magazine on June 1, 2012. “It is no surprise that a significant number of new product launches are deemed failures. Top reasons for failures include product cost issues, being late to market or missing demand, and experiencing inventory shortages that lead to supply disruptions and missed market and trend opportunities.” Markdowns and out-of-stocks are costing retailers billions of dollars each year. Retailers make deep buys of products consumers don’t want, resulting in heavy markdowns. Conversely, they often don’t accurately forecast the winners, resulting in missed opportunity. Manufacturers and retailers of fashion products have long enjoyed high margins because of the emotional appeal of these products. Retailers maintained differentiation through the types of products they carried along with the methods they used to present and merchandise the items. Consumers traveled to the retailer, largely with little or no product or competitive knowledge, browsed the collections, obtained input from sales associates, and ultimately made their purchases. The time and cost to make those decisions was high, and as a result, consumer purchase intent was also high. With today’s technology, many consumers now do their browsing online. With a few clicks, shoppers can research products, compare pricing, and find where to buy them. A 2010 Pew Research study showed that 58% of consumers research online prior to making a purchase. After researching online, consumers then visit the retailer, try on or “feel” the merchandise, and execute the transaction, often at the retailer but many times online. In this scenario, the cost of switching to a different brand or channel is extremely low. “Brand switching” often happens online, during the research stage, before the consumer gets in the car to drive to the mall. “Channel switching” can happen at any time –online, while in the store (if the customer finds a lower price online via a mobile device), or after the visit (if the consumer cannot find the right size or color in the store). With Amazon in the fashion picture, the industry is understandably concerned that if every product is available on Amazon, margins will drop for the brands, and retailers will lose the opportunity to differentiate themselves. If this happens, the entire industry will be commoditized. Is there a way to avoid this “Armageddon” scenario? Perhaps. Each major retailer has a large base of loyal shoppers, and these shoppers go out of their way to patronize their favorite store. A customer may shop for a brand, for example, but the specific products they desire differ based on the retailer. Each store’s customer base has its own unique set of characteristics. Retailers understand this and often talk about “our customer”. Brands also have loyal customers. Once a customer has emotionally invested in a certain brand, the brand’s customer keeps coming back, looking for what is being offered next. But even though people are loyal to brands, their shopping patterns for those brands differ by retail channel. How can brands and retailers come together and find a win-win?
First Insight, Inc., 2012
www.firstinsight.com
2
Developing Exclusive Fashion Assortments Using Consumer Insight
The Solution – Exclusive Assortments, Valued Accordingly The solution to this challenge is to provide assortments that are exclusive to the retailer; that is, products which are unique and differentiated for that retailer and are valued accordingly. With this model, shoppers would not be able to find the same merchandise at multiple retailers regardless of whether they shop in stores or online. Furthermore, when they find the products they want at the retailer they enjoy patronizing, the products are priced so that they deliver the value the consumer expects. For example, those who like to shop at Nordstrom would find the apparel lines they like, at the right price points, and their loyalty would remain with Nordstrom. Those who prefer to buy online, meanwhile, could shop the retailer’s website, since they would find the same merchandise they find in the stores. This would also hold true for Amazon: the brands would create a line for Amazon which is differentiated from the lines that are offered in the retail outlets. If a retailer has the right products for each channel, the number of products selling through at full price would be higher, creating a winning scenario for the entire ecosystem.
Traditional Methods of Developing Exclusive Product Lines Offering exclusive product assortments has been an established strategy for years, but often without good data on what styles each retailer’s consumers really want. Retail merchants often guess, and give guidance to the brands, who apply more guesswork. “Vendors have their own agendas, and frankly they are not always right on what a store needs”, said Warren Shoulberg in a recent article in “The Robin Report”. The typical process is a two-step product “editing” or selection process (see Figure 1 on next page). In the first step, a manufacturer shows its candidate exclusive styles to a retail merchant. This step naturally requires the manufacturer to narrow down the choices based on the brand manager’s belief of what will sell through that retailer. As a result, this process has the potential of leaving out some styles that could have been winners. In the second step, the merchant decides which of the candidate styles will become part of the exclusive product line. Because the merchant was only presented with a subset of the candidate styles, the merchant does not know what other options could have been successful. Also, most merchants at this stage use their intuition and experience to make their selections, rather than using data obtained from real-time direct customer feedback.
First Insight, Inc., 2012
www.firstinsight.com
3
Developing Exclusive Fashion Assortments Using Consumer Insight
Figure 1 – Typical Process for Developing Exclusive Assortments
The challenge with this approach is that if an error is made in an exclusive line early in the process, this error cascades from the manufacturer to the retailer, and the “cost pools” get progressively larger. One First Insight customer has indicated that by the time a new style is rolled out to its store chain, a mistake costs over 18 times what it would have cost if it had been eliminated at the design selection stage. The second and even larger challenge with this approach is missed opportunity. By missing a style that could have been a winner, retailers and brands lose significant potential revenue. One First Insight customer was able to identify its top selling dress of all time using the First Insight solution. This was a dress that had been missed by its previous merchandise selection and storetesting approach. Given this, how can a brand know what a retailer’s customers want when they don’t even sell directly to these customers? Further, how do they know the price sensitivity of each retailer’s customers? There are ways in which retailers and brands can work together to determine the specific styles that resonate with each retailer’s set of consumers, and how to price them, well before manufacturing and buy commitments are made.
First Insight, Inc., 2012
www.firstinsight.com
4
Developing Exclusive Fashion Assortments Using Consumer Insight
Using First Insight to Create Exclusive Products First Insight’s software-as-a-service platform uses online consumer engagements to let retailers and brands identify which new products to invest in, which products to avoid, and how to price winning products. The solution also helps companies know the product attributes that are getting consumers excited about these products. First Insight applies a predictive analytic model to consumer data to provide a forward-looking view of new styles, even while still in the design stage. In fact, Gartner, the world’s leading information technology research firm, recently named First Insight as a “Cool Vendor in Retail” and named First Insight in its “Retail Handbook for Becoming Demand-Driven” for 2012 The reports discuss the benefits of the First Insight solution to both retailers and manufacturers: “Although there are specific retail implications, manufacturers and product designers should take an interest in understanding how the wisdom of crowds can return highly relevant advice on new product success in the market” – Gartner, Cool Vendors in Retail for 2012 (April 2012) Through online games generated by the First Insight solution, the consumer is presented with an opportunity to “be the buyer” for that retailer or brand. Response rates are extraordinarily high, even without incenting the consumer to play. Why? Because consumers want to engage with the brands and retailers they like. How does this help in determining which exclusive brands will sell through each channel? Brand manufacturers can partner with retailers to evaluate potential exclusive styles using a four-step approach:
Figure 2 – First Insight Approach
1. Select candidate items As mentioned earlier, typically the manufacturer will perform the initial editing of the product set and will present a reduced set of candidate items to the retailer.
First Insight, Inc., 2012
www.firstinsight.com
5
Developing Exclusive Fashion Assortments Using Consumer Insight With First Insight, the manufacturer partners with the retailer to run an Insight on a much larger set of candidate items, or even on the manufacturer’s entire new offering for the category. The manufacturer loads images or even CAD drawings or sketches of candidate new products into the First Insight platform, along with a brief description and target MSRP for each item. One First Insight customer now takes images of hundreds of candidate styles in Asia, well before manufacturing begins. These images are loaded into the First Insight system for testing. Prior to using First Insight, a much smaller set of items were chosen by the merchants for in-store testing, due to the cost and time involved. 2. Engage consumers The key in identifying the optimal exclusive line is consumer engagement. Once the candidate new products are loaded into the First Insight system, the solution engages consumers through online games presented via web, social media, or email. There are two alternatives at this stage: a. Launch engagements targeted specifically to consumers of each retail channel individually. This way, the results of the Insights will reflect the preferences of the targeted retailer’s customer base. The most frequently used method for this approach is to launch Insights to the retailer’s email database. b. Seed each Insight with reference items which are known good and poor performers within the retailer’s collection. When respondents correctly identify the reference items, they are identified as good predictors of the types of products that retailer’s customers desire. These “predictors” are weighted more heavily in the First Insight analytic model. During the online games, consumers provide preference and sentiment information, along with the price points at which they believe the products will sell. The data is collected in a secure area within First Insight’s cloud-based platform. 3. Apply Predictive Analytics Within 72 hours, the results of the consumer engagements are compiled and First Insight’s analytic models are applied. Open-field sentiment comments are aggregated using a proprietary word cloud technology which identifies the most frequently made statements about the product. Respondents are filtered and weighted based on a number of criteria, including accurate identification of reference items as explained in Step 2. 4. Gain Insight Results are displayed in an easy-to-use dashboard format. Retail merchants and brands can see which specific product designs and attributes resonate with the customers of each retailer, which elements are most valued, and how to price products to capture the value and complete the sale. Through viewing product comments, designers can modify the designs and re-run tests to gauge whether performance improves.
First Insight, Inc., 2012
www.firstinsight.com
6
Developing Exclusive Fashion Assortments Using Consumer Insight The solution also provides guidance on optimal entry price points for the products. Also, based on the target costs for the new products and the retailer’s markdown cadence, the lifecycle gross margin percent of each item is calculated, along with the price which will maximize overall gross margin. Brands can use this capability to determine where to set MSRP, and can make go/no-go decisions on products based on the margins each item will bear. Retailers can use this information to negotiate with vendors and to set pricing and markdown cadences.
Figure 3 – First Insight Output
Additional Benefits for Brands – Entering New Categories In addition to selecting the items for inclusion in the exclusive assortments, the First Insight solution can also be used for “white space” analysis to identify new categories for a brand to enter. For example, a clothing manufacturer may want to leverage its brand into a new category (e.g. Under Armour leveraging its compression shirt brand into athletic shoes). Mock-ups of the new branded items can be loaded into the First Insight solution and tested alongside existing competitive items in the same category. In this case, prior to launch, Under Armour can test mock-ups of its running shoes with its logo against Nike and Reebok shoes.
First Insight, Inc., 2012
www.firstinsight.com
7
Developing Exclusive Fashion Assortments Using Consumer Insight This same methodology could be used by a brand to understand how best to serve its many channel partners. For example, 7 for all Mankind can determine the right products and price points for Nordstrom, Macy’s , Saks, Neiman Marcus and even Amazon. Just as Important: When to Exit a Category Since fashion trends change rapidly, brands and retailers need to reduce the entire cycle time from concept to cash. As important as knowing when to enter a category is knowing when to exit. The First Insight solution can be used to continue to evaluate the forward-looking demand for products to assess whether a category is trending up or down. Having advance information enables retailers and brands to make shifts in designs and react to fast-moving consumer preferences.
Conclusion As the market shifts and consumers become even more empowered and fickle, merchants and brand designers must adapt to align with these new realities. Historically, merchants have relied on experience and intuition and have been resistant to adopt technology and use data in their decision-making. New tools now provide the ability to incorporate real-time consumer feedback into the product development process. Using First Insight’s solution, retail merchants and brand designers can work together to construct the optimal exclusive brand line-up for each retailer, maximizing margins while providing the best customer experience and engagement possible. It is a true competitive advantage. They can also work together to identify new categories which hold the most promise for new exclusive assortments. With actionable data, the brand and retailer can provide a better, more tailored assortment to their customer base that is unique to that retailer in a more profitable way.
First Insight, Inc., 2012
www.firstinsight.com
8
