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First Insight Brings AI, Machine Learning to New Merchandising Platform

Despite the many ways in which retail has changed over the years, merchandising remains at the core of the business. If you don’t have the right product in the right quantities when your customer is ready to purchase, you risk disappointing that shopper, sometimes with long-term consequences.

First Insight is among the tech vendors leading innovation in the merchandising space. Dozens of brands, manufacturers and retailers spanning department stores to mass merchants have improved decision-making with First Insight’s pre-season product testing solution virtually since its inception in 2007. Now, though, First Insight is building years of incremental improvements to that initial product testing “point solution” into a full-bodied Customer-Centric Merchandising Platform packed with features to help merchandisers fine-tune their buying accuracy.

Central to the platform are artificial intelligence (AI) and machine learning, heavyweight tech that takes over much of a merchandiser’s heavy lifting. Because even more data points continuously are being added to the millions already fed into the platform—across product performance, test data and consumer test data, for example—machine learning helps to train the platform’s algorithms to make sense of all of this varied information. First Insight said this enables the algorithms to make even more—and smarter—predictions, in turn helping merchandisers select just the right products.

First Insight’s InsightPricing tool brings together historical data with Bayesian modeling, stemming from AI, that processes real-time customer data—a first, the company said. “The result is a highly accurate pre-season price elasticity curve for each product, along with accurate forecasts of average unit retail prices before the product is launched.” With the tool, retailers have greater visibility into what a product’s sell-through could be and plan for a reasonable markdown cadence in line with the curve.

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The company also is thinking about how to improve the product design end of things, incorporating attributes so creatives can monitor which ones perform well with consumers and use reporting features to analyze how certain product characteristics trend over time—not just within that brand or retailer but within the industry as a whole.

Finally, retailers can use the merchandising platform to banish massive overstocks or stockouts and buy closer to the amount of product they’ll actually sell. What’s more, the GDPR-compliant platform connects via API to other “mission-critical retail technologies,” like CRM, PLM, 3-D and CAD and assortment planning so all systems can benefit from the insights data analysis affords.

Dr. Mark Chrystal, fast-fashion retailer Rue21’s chief analytics officer, testified to the improvements he’s seen since partnering with First Insight. “At Rue21, our objective is to put the customer at the center of everything we do,” said Chrystal, who’s also worked for David’s Bridal, American Eagle Outfitters and The Disney Store. “We are seeing strong gains from using First Insight at Rue21 in reduction in markdowns, improvements in margins and speed to market.”