Social distancing measures are changing how companies are buying and demand planning, potentially ushering in more digitization to the process out of necessity.
As remote work becomes the norm during COVID-19, in-person line reviews and showroom visits have been replaced by video conference calls. During Sourcing Journal’s “Coronavirus Impact Series: Agility, Planning & Salvaging Seasons to Come” webinar, experts from First Insight, Oracle Retail and rue21 touched on the ways that technology is opening up the ability to make better informed decisions during the crisis and beyond.
“Gut and intuition about future customer wants and needs is still important,” said Mark Chrystal, chief analytics officer at rue21. “But right now, assortment selection really needs to come from using digital testing and other customer analytical tools to form a data-driven view of how the current experience is affecting the product wants and needs, so that we can produce an assortment plan and a forecast that really learns from our customer in near real time.”
Before U.S. brick-and-mortar stores closed in March, retailers were merchandising looks for spring and early summer. By the time physical retail is back up and running, it will almost be time for a back-to-school push. But because retail lost this season, it is unclear whether consumers will still be interested in buying swimsuits or sandals when stores reopen.
Rather than relying on historical data to anticipate demand, in the new normal retailers instead have to study customer desires in real-time, such as through digital product planning. Merchandising platform First Insight gathers consumer opinions on products through third-party panels, social media and email campaigns, getting feedback from the would-be customers before an item has even hit a sales floor. Along with collecting shoppers’ qualitative reactions to designs, consumers share what they would be willing to pay for a particular product, which will be instrumental in helping retailers plan pricing and promotions.
By comparing these survey results with consumer engagement and purchase data, retailers can also identify which consumers have a strong capability for predicting strong sellers. Research efforts, including attempts to predict trends in advance, can be targeted towards these “tastemakers.”
“Some consumers are actually able to give an opinion on trend and be able to forecast what’s coming next,” said Jim Shea, chief commercial officer at First Insight. “There are a lot of consumers that have difficulty doing that, but there are some consumers within any large group that are better than others at forecasting trends and being tastemakers, so to speak.”
Demand for certain items is expected to spike. For instance, Greg Flinn, planning and optimization product solutions manager at Oracle Retail, noted that trends out of China already suggest that eye makeup will be a focus due to face masks.
Junior retailer rue21 has been working with First Insight for more than two years to test products, but COVID-19 has accelerated its use of the platform. Rue21 is currently testing product that is sitting in its brick-and-mortar stores to gauge interest so it can plan the pricing and promotion strategy to move the merchandise effectively. For products in development, the retailer is considering a change to its workflow in response to remote collaboration. Whereas rue21 used to receive a sample that it would photograph on a model before testing, it is looking to get a better-quality image from the vendor that it can use for testing, cutting out steps.
Aside from helping retailers plan in uncertain times, including consumers’ thoughts in the buying process offers another way to remotely connect with customers and show that their opinion is valued.
“Right now your customers feel isolated certainly. And there’ll be this need to connect with them in a more intimate way,” Flinn said. “And by including their voice in your assortment planning process, you’re probably going to be connecting with them in a way you likely never have.”
Watch “Coronavirus Impact Series: Agility, Planning & Salvaging Seasons to Come,” sponsored by First Insight, Eurofins, Tradewind, Texworld USA and Lectra, to learn:
- How retailers can compensate for a lack of historical data heading into back-to-school and holiday 2020
- Which consumer groups are the most optimistic about store reopenings
- How rue21 is making decisions about reopening its stores
- What factors could shape consumer demand post-coronavirus
- What impact COVID-19 has had on rue21’s e-commerce business
- The opportunities for digital product testing throughout the supply chain
Click here to watch this webinar now. And register now for the next coronavirus-related webinar, “Battling Back in the Midst of Crisis,” on April 29 here.