Customer demand is becoming more unpredictable by the minute, putting retailers on the defensive as they try to understand how to optimize their product merchandise offering, services and experiences. In today’s world, to get the supply and demand equation right, retailers must generate as much data as possible from product testing.
“They need to rely on data to anticipate as opposed to react,” said Greg Petro, CEO and founder of First Insight. “The winners will anticipate. And the anticipation is the challenge. You can’t rest on a historical data point at this stage or leverage intuition to a large degree. It does not make sense economically any further.”
First Insight, a technology provider that helps retailers and brands use “voice of the customer” feedback to improve product design, pricing, planning, merchandising and marketing, has dealt firsthand with customer data across the apparel and footwear spectrum, with customers ranging from Wolverine Worldwide to rue21 to Marks & Spencer and Kohl’s, alongside a collection of other consumer products brands, mass merchant retailers, manufacturers and wholesalers. So it knows the challenges that brands face in getting the right products to the right consumers at the right time.
In November, the company took a step beyond its product testing roots with the launch of its Next-Gen XM Platform, an experience management platform designed to give companies the opportunity to anticipate profitable outcomes, increase gross margins and revenues, save months in product time to market and realize ROI quickly and measurably in a platform that can be integrated into any existing data system.
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According to Petro, the Next-Gen XM Platform has four components: customer experience management, product experience management, brand experience management and employee experience management.
The extension of the platform comes amid a new challenge in retail—consumers are becoming more segmented, thus making it more difficult for merchants to look at the product in the view of the consumer.
“It becomes very challenging for a national retailer or a brand to say, ‘We’re going to take this approach, and it’s going to cover this breadth of customers,’ unless they’ve actually looked at it from each of those segments’ perspective,” Petro said.
Even if they properly assess demand, retailers are under pressure to somehow still find ways to get top products through to the consumer amid a clutter of thousands of other goods. First Insight is now helping retail customers test product ad videos on Instagram, and in the past has helped a customer determine whether a garment would generate more demand if it was depicted as folded or hanging (the answer was neither, and this knowledge yielded significant operational cost savings).
Petro also noted that First Insight has tested denim products based on information from labels, helping marketing departments at retailers, brands and manufacturers determine the keywords that should be featured on a website or in a catalog.
“What we see is our customers are testing everything,” Petro said. “They are asking their consumers, ‘What do you think about that experience? What was it like? How should we change it? What are you anticipating doing?’ They’re consistently doing it to see if their behavior is going to change.”
Petro gave one prediction for 2021, saying that consumers would not go back to their pre-Covid buying and working habits as the proliferation of online shopping and working from home took hold in 2020. In particular, this may surprise some retail decision makers, and Petro stressed that he hopes these businesses don’t try to go back to the “old way” of operating.
“As an entrepreneur, looking into the future, your goal is to look forward, not back,” Petro said. “It is really the opportunity that lies where we are right now and ahead of us, not behind.”
Click the image above to watch the video and discover why Petro says retailers shouldn’t be too conservative in their post-pandemic planning.