Technological innovations have optimized and improved almost every area of the retail organization, from marketing to execution, but the process of getting products to market has been significantly slower to move forward.
“The day-to-day work that most people in a retail organization do to bring assortments to life is driven by face-to-face meetings – there’s no good data to back it up, it’s a lot of meetings, emails, and excel getting together in a room and saying, “What do you think? ”, Described Dan Leahy, co-founder and CEO of the Product Design Analysis Platform. MakerSights.
But these legacy processes don’t work as well as they did before, and COVID has made that fact hard to ignore. “A bunch of cows sacred to the product-to-market process began to be challenged once teams were forced to stay home and e-commerce began to account for over 50% of their retail sales, “Leahy said in an interview with Retail Contact Points. “Consumers have changed, they are less willing to be dictated, they are more difficult to predict and they change faster – now more than ever, we are seeing marketers, planners and designers looking for ways to be more in tune, more regularly, with what their consumers want.
This type of consumer voice has generally been difficult to obtain outside of focus groups, especially early in the product design process. However, new tools like MakerSights are enabling consumer feedback at every stage of the product development cycle, and retailers are seeing the impact far beyond sales:
- Stronger consumer information is transform the way brands market their products and eliminate part of the risk of this process;
- Data and predictive analytics lead to smarter assortment planning, not only in product design, but also in channel product mixes and even consumer marketing and targeting; and
- Smarter design processes help brands reduce financial and environmental waste.
Distribution is no longer a destiny
Leahy has worked for years in the hospitality industry to help restaurants optimize their inventory. After selling his first business to Groupon, he teamed up with Matthew Field, a former partner of Bain & Co. and one of the first employees of Birch, to bring what he had learned in foodservice inventory planning to the retail industry.
To find out exactly what retailers need, the partners spoke to nearly 300 people at all levels of the assortment planning process. “The scale of investments made without reliable forward-looking data was staggering”, Said Leahy. “The more you dig into it, you realize that these processes were built in a world where distribution was the fate of so many brands. If you had a Tier 1 wholesale space and did a pretty good job with top-down billboard type marketing, you had great control over the entire buying path – you didn’t have to be responsible for what you created because you could create demand.
“But over the past five to ten years, the consumer has better access to information via social media and better access to products via e-commerce – they are no longer limited to what is on their local shelves“Leahy added.” And yet the process used by brands to bring products to market to serve this consumer has not changed at all. [The old process] worked for an old world of retail, but that world is changing very quickly, and brands now need tools to better respond to a much more dynamic consumer market.
MakerSights was launched in 2015. Initially, its customers were primarily data-driven digital native brands such as bonobos, MMLaFlower and taylor point, but the company now supports many mainstays of retail, including Ralph lauren, J Crew, Champion and UGG.
Chris Hull, SVP, Sustainable Accessories Brand by Rothy, has now worked with MakerSights at two companies. He started using the tool when he was Chief Merchandising Officer at Shinola and has now implemented the solution at Rothy’s as well.
“As much as I like to think I have a crystal ball to help choose the products the consumer wants, I obviously don’t,” he said in an interview with Retail Contact Points. “I was moving away from gut and looking back, and I really wanted to bring a tool that could help us make the voice of the consumer heard on a large scale. I needed support to help “derisk” these decisions. “
Use data to make smarter decisions
MakerSights is built around the process of bringing a brand to market, allowing users to test consumer demand at every stage of the design process – from initial design to final assortment decisions and even aspects such as regional placement.
“The way I used MakerSights at Shinola was to allow designers to design more things», Explained Hull. “So if my SKU number indicates that I want five new watches, let’s design ten and turn them off, get the voice of the consumer, then take that idea and narrow it down to the five. Or if consumers like six or seven of them, maybe we will expand the assortment.
MakerSights pulls consumer feedback and information from internal and external sources, by reaching out to a brand’s existing customers via email, through social media or app integrations, and / or by recruiting non-representative customers. of the target consumer of a brand for a given product or range.
“In my days at Nike you would organize a focus group of maybe 10 to 12 people, ”Hull said. “It’s a long time to go, dear, and it’s usually dominated by one or two voices, the more stubborn [people in the room]. You come back from these focus groups thinking you can extrapolate these two voices to be 2000 voices and it will help you make your decision. MakerSights removes all this subjectivity. You can get thousands of responses within hours. I think there is more [that’s] statistically significant in these results.
“There are so many amazing tools that just weren’t available when I arrived as a merchant and product designer at Nike, I just don’t understand why you wouldn’t take advantage of them,” he said. -he adds. “It makes everyone more informed and smarter about decisions. It is up to the company to decide how to use the data, but what a shame not to have it at least as part of your decision-making.. “
Reduce waste by improving SKU productivity
The benefits of having this additional data go far beyond optimizing product sales. By helping brands avoid unsuccessful products, they reduce wasted time and materials as well as financial loss.
“These heavily branded products that sometimes don’t even sell are disproportionately the kind of products that go into landfills,” Leahy said. “Brands find that if they have a tighter line and better SKU productivity, it’s better for their bottom line and their environmental footprint. “
This is extremely important for a brand like Rothy’s, which is centered on a sustainability mission. All Rothy’s products are made from recycled plastic water bottles and other post-consumer recycled materials. In 2020, the company had reoriented 50 millions bottled water, so not adding to the fashion industry’s waste problem at the other end of its product cycle is critical to the brand’s value proposition.
“Getting that voice of the consumer, that extra bit of data lets us really understand that we shouldn’t be making and producing things that just won’t resonate.Hull said.
This consumer insight can also be used to inform marketing and targeting decisions, mixes of regional and channel assortments, and even new categories to capture.
“You can click on those demographics to start seeing trends like, ‘They like that color or that print more in the Southeast,” Hull said. “We can even explore the city level with zip codes to inform the assortment we apply to each of our stores. “
Hull said this would be especially helpful as Rothy seeks to dramatically increase her brick and mortar footprint in the years to come and expands into new product categories: “We’re definitely going to use this to get a signal on where we need to go,” Hull said.
As retail becomes more data-driven, brands that find new ways to capture and use data will have a significant competitive advantage, Leahy predicted: “People who can act on data which are now generated by the market are going to be much more more attentive to the needs of consumers and can respond to them much more quickly, “he said.” However, this is not a process that is historically part of bringing products to market. Culturally, you have to get the organization to listen to what is going on in it. moment, versus a bunch of experts, and they’re really creative experts, walking into a room and subjectively deciding which product is going to perform well in 12-18 months. You want to tap into that creative intuition, but I think you’re going to see a real separation between brands that get set up with the right tools and those that don’t.