In an era where quick-turn production is becoming a top value proposition and the next hot fashion trend can turn passé in the blink of an eye, it’s becoming ever more crucial that brands embrace real-time data if they want to keep a competitive advantage.
The good news is that fashion retailers are using this approach to listen to their consumers, already employing 40.3 percent more data-related professionals than in 2020, according to a recent report from algorithmic merchandising firm Nextail.
Levi Strauss & Co. is the most “retail data-forward” of the 22 leading fashion companies researched, with retail data-forwardness score of 27.4, the highest on record. This more than doubled its 11.8 score recorded in 2020, when the denim icon came in fourth.
According to Nextail, retail data-forwardness (RD) is measured by the total number of data-related professionals divided by the revenue of each retailer.
Furthermore, the weight of data-related employees over total headcount grew by 91.5 percent at LS&Co, the largest individual year-over-year growth percentage and the second-highest total weight to Nike.
LS&Co is helping its own cause in increasing retail data-forwardness through internal “re-skilling” and “up-skilling” by way of a Machine Learning Bootcamp, whose objective is to “transform the company into a data- and artificial intelligence-powered business” in which current employees receive training in coding, machine learning and agile ways of working.
Keeping this in mind, it might not be coincidental that LS&Co is a top web traffic driver. Online traffic increased 37 percent in July and August, despite tough year-over-year comparisons for the same year-ago period when traffic was up 57 percent. On a two-year basis, traffic is up nearly 65 percent over the last 12 weeks, according to research from Wells Fargo retail analyst Ike Boruchow.
“More than ever, fashion brands and retailers are investing in talent to help them leverage data in order to future-proof their operations,” said Joaquin Villalba, Nextail CEO. “These professionals empower brands to better interpret data and work with advanced tech across an organization, to capture the full potential of retailer data and beyond, ultimately providing a better customer experience.”
Lululemon came in as the second most data-forward fashion company at 18.5, ahead of the 12.9 RD it had last year and leapfrogging Nike in the process.
Data is a major component of the modern Nike business, with the athleticwear giant acquiring four data-science-related startups between March 2018 and February 2021. Nike placed third in RD at 18.1, ahead of 2020’s 17.2, when it was the RD leader. Nike also has the highest weight of data-related employees over total headcount at 1.10 percent, up from 0.9 percent last year. The brand has led the sector in this metric for three consecutive years
Burberry and PVH round out the top five in collected RD score, with the latter seeing the largest jump (+6.7) over 2020 of all 22 companies observed.
Sportswear leads pack, but luxury is clearing a path
Given Nike’s continued success, as well as that of chief competitor Adidas, sportswear is the big winner when it comes to data-forwardness. The category ranks as the most retail data-forward with an aggregated RD of 14.5, a 13.8 percent growth over 2020, and the highest weight of data-related professionals over total headcount at 0.6 percent. Adidas itself is gaining ground with an RD score of 9.9, up from 8.3 last year.
Luxury retailers, which include major fashion houses such as Richemont, LVMH and Kering, as well as top brands Chanel and Hermès, have also made notable progress in 2021, with a 68.7 percent year-over-year increase of RD and 56.5 percent growth in data-related professionals over total headcount.
With partnerships such as LVMH and Google Cloud being fostered to develop personalization and LVMH, Prada and Richemont’s Cartier joining forces to fight counterfeiting via a blockchain network, it’s clear that luxury is very much warming up to modern technology.
Nextail says it expects luxury to continue investing in data talent, especially as high-end brands take technology leaps beyond e-commerce.
Brands are being proactive in hiring
In total, Nextail found that there are 8.2 data-related employees per $1 billion of revenue among indexed retailers, up from an average of 5.8 in 2020. Across the indexed companies, 2,944 professionals make up an average of 133.8 data-related employees per company (12 per 1,000 headquarters employees), or 1.8 per 1,000 employees.
“Making this increase even more significant is the fact that overall head counts continued to climb in 2021,” the report said. “In other words, the proportional increase of data-related employees on fashion teams was not a result of overall reductions in headcounts. Thus, fashion retailers have made a demonstrative acceleration of these professionals onto their teams.”
Fashion companies studied include Adidas, Burberry, Chanel, Fast Retailing, Foot Locker, GAP, H&M, Hanes, Hermès, Inditex, Kering, L Brands, Levi Strauss & Co, Lululemon, LVMH, Nike, PVH, Ralph Lauren, Ross, TJX Companies and VF Corporation.
Nextail retrieved data on the employees using LinkedIn Recruiter to search both the major retailers and their brands for individuals currently employed with job titles in artificial intelligence, data science and machine learning.