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Dick's Sporting Goods has been working with First Insight, a customer-centric merchandising platform, for three years to improve its designing, buying, and pricing decisions through First Insight's predictive analytics platform.
And the two companies have now announced a multiyear expansion of their partnership, allowing Dick's to continue to use consumer data to improve its product development and merchandising processes.
Business Insider Intelligence spoke with First Insight president and CEO Greg Petro to learn about the challenge that drew Dick's to consumer-driven predictive analytics, the strategy behind First Insight’s approach, and takeaways for all types of retailers.
Challenge
Dick's wanted to successfully differentiate its product offerings to lure consumers away from competitors. The retailer’s goal was for both its private labels and branded merchandise to win shoppers’ favor, but the industry average for new product success rate is below 40%, Petro said, making it difficult for Dick's to build a selection that would make it stand out to shoppers.
Creating an attractive product assortment is of growing importance for many retailers as Amazon adds more products and brands, and becomes many consumers’ go-to shopping destination. This is particularly relevant for sporting goods retailers because Amazon has launched its own activewear private labels and raked in an estimated $6.5 billion in sports and outdoor sales in the US in 2017, up 15% year-over-year (YoY), according to a report from One Click Retail sent to Business Insider Intelligence.
Strategy
The retailer incorporated First Insight's analytics on consumers' sentiments to inform its designing, pricing, and buying decisions to make its selection more appealing. First Insight collects consumer data on shoppers' demographic information, their scores on product appeal as well as how much they would pay for products (see below), and additional comments through email, social media, and the retailer’s site.
The data is then run through the firm's predictive analytics models to give Dick's unique insight into what consumers want, which informs the retailer’s product development process for private labels, buying decisions for branded goods, and pricing strategy for all products.
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