Despite the apparent conventional wisdom that brands have aligned their sustainability initiatives with consumer interests, both parties are not always in lockstep. One study from experience management provider First Insight illustrates that while 68 percent of consumers will pay more for sustainable products, 66 percent of retailers don’t believe these shoppers will make the effort.
In a Q&A with Sourcing Journal, Greg Petro, CEO of First Insight, shares where experience management fits in to help brands improve product decision making and eliminate this sustainability disconnect.
Sourcing Journal: What role does First Insight play in the sustainability conversation in 2022?
Greg Petro: ESG initiatives, particularly sustainability, are climbing up the priority list for almost every business. First Insight plays multiple roles in the sustainability conversation. Customers use our Next-Gen XM platform to make better business decisions about product selection and pricing, branding, assortments and buying that drive more sustainable operations and higher profitability.
Also, we publish an ongoing series of consumer reports that provide insights into changing consumer attitudes and behaviors. Co-published with the Baker Retailing Center of the Wharton School at the University of Pennsylvania, our recent reports revealed that Gen Z is increasingly influencing older generations to make more sustainable purchase decisions and that retail executives are out of touch with what consumers really think and do when it comes to sustainability.
How has the current sustainability landscape shaped the priorities/goals you have for this year?
G.P.: The current sustainability landscape needs to be viewed in the context of supply chain challenges and price inflation. Our recent survey of retail executives found that nearly all—98 percent—expect supply chain disruptions to continue at least through the end of 2022. Inflation in the U.S. hit a 40-year high in 2021, with more to come. It’s more important than ever for companies to make better business decisions, especially on pricing, by listening to the voice of their customers and using our data to better match supply and demand.
Where do technologies like experience management and predictive analytics capabilities fit in toward building a more sustainable fashion ecosystem?
G.P.: Hundreds of leading retailers and brands are using our platform to engage their customers directly and get actionable answers to critical questions, such as: Which of our target customer segments are concerned about sustainability? How do our customers define sustainability, and what elements—product, manufacturing processes, packaging—do they value? What is the best way to communicate the sustainable aspects of our product? How should we price the product? Testing new offerings early in the product creation process enables companies to cut underperforming products and focus development and inventory investment resources on the winning products. This is truly sustainability in action.
Digital testing with 2D/3D CADs further reduces the environmental impact of physical samples. We have customers seeing a 70 percent reduction in sample production, costs and time. Getting the price right is a key factor in driving sell-through and keeping product from ending up in landfills, especially in these inflationary times, and retailers and brands should seek out solutions with a proven track record for pricing accuracy.
What advice have you given apparel brands and retailers on merchandising decisions or resale/recommerce business models to help them improve their sustainability standing?
G.P.: Our advice is consistent: listen to the voice of your customer. Use it as a competitive advantage. Brands are using our platform to get direct, actionable input from their existing and target customers about their preferences on recommerce and to predict outcomes from entering new categories. This enables them to minimize their environmental impact while making their business itself sustainable for the long haul.
Greg Petro is the founder and CEO of First Insight, the world leader in Next-Gen Experience Management (XM). Before First Insight, Greg spent nearly two decades in retail. As someone who saw first-hand the waste and inefficiencies in the industry, he realized there was a better way for companies to make decisions with less variability and uncertainty. In 2007, Petro launched First Insight, a solution that uses predictive analytics and voice of the customer data to help companies make more profitable decisions. Today, First Insight continues to transform the retail industry by helping businesses operate more sustainably while delivering the best possible customer, product, brand, and employee experiences.
To learn more about First Insight, click here.