U.S. consumer confidence climbed in April to the second-highest level in more than eight years, according to a recent report by the University of Michigan. And as retail experts like to point out, relaxed shoppers are likely to spend more money. It’s no surprise, then, that the National Retail Federation (NRF) said retail sales grew 3.5% on a year-over-year basis last month.
With competition heating up in the off-price segment and American e-commerce sales rising six times faster than all other retail channels, merchants can’t afford to miss the mark.
That’s where WGSN’s new StyleTrial comes in. As the latest tool from the trend analysis firm, StyleTrial provides WGSN clients with crowdsourced validation by using big data analytics and consumer panels to predict how products are expected to perform and identify best sellers before they hit the shop floor.
“Meaning our customers don’t need to wait for sales figures to uncover a million-dollar mistake,” quipped Sansan Chen, executive vice president of product at WGSN.
So how does it work? Users upload product photos to the StyleTrial website and select a target demographic. Powered by a panel of 750,000 multinational consumers and patent-pending algorithms, the tool will then deliver objective feedback on potential bestsellers and poor performers within five days.
According to the Journal of Product Innovation Management, nearly half of all new products fail because most retailers and brands make decisions based only on historical data and in-store testing. In 2014 alone, the U.S. fashion retail industry had to put about 40 percent of its offering at deeply discounted prices, missing out on more than $280 billion worth of full-price sales. StyleTrial, by comparison, has shown close to 100 percent accuracy in trials.
“Historic data is a valued, core asset of many modern retailers who rightly use it to infer future insight, but as fashion gets ever faster and the consumer is better connected, better informed and more influential than ever before, retailers need a more accurate predictor,” Chen said, noting that WGSN is in talks with more than 40 interested retailers looking for a leg-up in their everyday buying decisions.
She added, “If the retail industry decreases inventory markdown (reduced or on promotion) by 10 percent and gets it right this year, with consumer confidence returning in force, retailers can expect a greater share of full price sales and higher margins as a result.”