Trends & Tides

We live in a “now” “more” “faster” paced world.  Multi-tasking has reached an extreme as consumers find themselves constantly on the go.  To be successful, retailers must find innovative ways to keep up with them.  Last week, First Insight addressed the significance in mass personalization.  Company content must work to engage on an individual level; however, the message must also be delivered in a relevant way in order to truly motivate action.  After all, sales can take place anytime, anywhere!

E-commerce is a must, with a 10% jump in spending over the past year.  But, what about M-commerce?  With substantial growth in mobile Internet access, more and more retailers are using mobile initiatives to connect with consumers.  According to the IT Research Firm Gartner, sales of smartphones are forecasted to grow by 50% in 2010 to 250 million users.  The majority of these users regularly access the Internet to communicate, learn, share, socialize and yes…shop.    “Mobile web adoption is growing eight times faster than the first wave of PC Internet adoption,” Google CEO Eric Schmidt recently said.

With the increased adoption, it evident that retailers must expand digital commerce beyond the web.  Embracing this trend is clearly expressed by Cate T. Corcoran in, “Mobile Commerce to Grow” published in Women’s Wear Daily.  The priority for retail innovators is to ensure that anything that can be done on a computer can also been done on a mobile phone.  They must give consumers the flexibility to shop when and where they want.

Many retailer industry leaders including Sears, Victoria Secret and Ralph Lauren are embracing the new opportunity and are creating mobile applications.  Gilt Group, where shoppers are on a time limit to make purchases, has seen direct increases in sales due to a mobile commerce presence. According to Susan Lyne, Gilt’s Chief Executive Officer, mobile commerce for its iPhone application alone, accounts for 7% of sales on the weekend and 5% of sales during the week.  Furthermore, Finish line recently launched a new mobile shopping site that directly integrates with the company’s website.  Taking a consistent approach allowed Finish Line to quickly adapt its existing search and navigation infrastructure to their mobile site, resulting in immediate increases in search and a 3% boost in online sales.

Corcoran predicts that the next frontier is gift card and loyalty programs that can be accessed by a mobile application and used in stores or online.  It is all comes down to creating links with consumers.  The stronger the link the more durable the relationship.  First Insight understands the importance in staying top of mind with consumers and presenting them with relevant message.  Our solution was created to give consumers a more active voice in the merchandising process. In doing so, we both empower consumers to influence products and brands and inform retailers to new trends and consumer demands.

First Insight engages consumers with interactive online games to play and share – all while collecting valuable data.  These games can be distributed across various online and mobile communications.  We can even use social media sites to tap into conversations that may already be happening around your company. In utilizing the anytime, anywhere approach, we can reach out to consumers in a little as 48 hours to gain valuable data.  This data is then applied to our proprietary analytic models to create actionable insight for design, merchandising, marketing and strategy. First Insight gives you the opportunity to have a meaningful conversation with consumers to increase buying accuracy and achieve greater success in introducing new products.

Filed under: General by Erin Higgins
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First Ever Use of Social Media in PLM Provides Real-time Feedback on Designs

Gloucester, Mass., June 8, 2010

News Facts:

• TradeStone Software, recognized by analysts for delivering top-rated Merchandise Lifecycle Management (MLM) solutions that unify the design, sourcing, ordering and delivery of private label and branded goods and First Insight, a leader in consumer insights, today announced a strategic partnership to bring consumer influence through social media into the retail design cycle.

• This represents the first-ever use of advanced, consumer-focused, social media “gaming” technology and techniques in the retail supply chain.

• The two software companies are working together on a ground-breaking PLM initiative that will give designers real-time data on trends, product attributes, and demand through various online networks, including social media sites such as, Twitter, Facebook and MySpace.

• Retailers will be able to gain valuable intelligence from consumers during the design and planning stages by integrating First Insight’s SaaS with TradeStone’s Merchandise Lifecycle Management solution platform.

• TradeStone’s retail customers will gain the use of First Insight’s patented predictive analytics for an early view of perceived customer value, sentiment and pricing options, giving them reliable guidance to make decisions related to item selection, trend identification, category management, targeted pricing and regional merchandising.

• As a result of the partnership, retailers will be able to collect customer feedback in as little as 48 hours, providing a unique ability to guide decisions on what products, designs and attributes to source and produce.

Supporting Quotes:

• “We strive to help designers and merchants focus on what they do best, bring innovative products to market as quickly as possible,” said Sue Welch, CEO, TradeStone Software. “The groundbreaking work with First Insight is a strategic move that enables designers and merchants to publish ideas, concepts, materials, color palettes, etc. out to their customer communities for feedback and collaboration. This will provide unprecedented information about customer preferences early in the design cycle, helping reduce cycle times and maximize the number of on-trend items our retailers put on store shelves.”

• “In order to maximize profitability, it is crucial for retailers and manufacturers to listen to their customers before costly design and buying decisions are made,” said Greg Petro, CEO and founder of First Insight.  “We are excited to incorporate First Insight’s unique customer feedback-driven technology, into TradeStone’s equally market-leading Merchandise Lifecycle Management solution suite. This partnership provides a first-ever way for retailers to access critical customer input quickly, which can greatly impact the bottom line.”

Filed under: Press Release by Erin Higgins
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Temperatures and retail sales were both on the rise as we entered June. But, will conditions remain bright for the months ahead?  About two thirds of the nation’s retailers exceeded analyst expectations for the beginning half of 2010, with profits up 26% from 2009 according to Thomas Reuters.  Although the news is positive, the sustainability of this growth is still in question.  The graph below shows a slight dip in consumer confidence in May, representing an unsettling hindrance in the recovery.

In view of this, retailers/ manufacturers must continue to boost momentum.  The ability to reemerge with confidence and long-term success will require a better understanding of today’s customer, a flexible business structure and most of all, innovative leadership.  So, are you an innovator?  Over the next three weeks, we at First Insight will investigate how retailers/manufacturers can stay ahead in today’s complex environment.

With the rise in new technologies and increased interconnectivity, retailers/manufacturers must reinvent how they interact with, respond to and serve customers.  According to a recent study released by IBM, 88% of all CEOs picked “getting closer to the customer” as the most important dimension to incorporate in their strategy in the next five years.  Decisions need to be made based on what your customers need and what motivates them to choose your products/designs.  As a result, several innovative retailers/manufacturers are “officially” making customers apart of their team through collaboration as well as co-creation.

Take for example the new company, Blank Label.  In the recent New York Times article, “ Putting Customers in Charge of Design,” Amy Wallace reveals the success this small company is having with a big idea.  She asks, “What if you could design a shirt yourself and hang it in your closet for about the same price as a mass-produced button-down? “  Well, that is exactly what Blank Label allows customers to do.   The tagline “Designed by You.  Stitched by Us” explains it all.  In visiting the interactive website, customers are able to design their own shirt to fit their personal style and body.  “The value proposition of customization at retail prices was a cornerstone of our company from the very start,” Mr. Bi, founder of Blank Label said.  “The emotional value proposition: how expressive something is.  People really like Blank Label shirt because they can say, ‘I had a part in creating this’.”  Wallace also mentions a number of other customized web ventures from granola (MeandGoji.com) to handbags (LaudiVidni.com).   The trend is personalization, offering precisely what customers want at the right price.  Since in business, Blank Label has sold nearly 500 shirts.  Although momentous for the small start up, how can the concept of scalable personalization be carried out in your business?

First Insight is reinventing the retail/manufacturing business in a consumer driven market.  By engaging customers with online activities and collecting valuable information, First Insight gives retailers/manufacturers early insight on trends, product attributes and customer demand.  Our software solution creates a two-way conversation to discover the “right” items with customers versus presenting items to them.  At the same time, you are strengthening customer relationships by giving them an active voice and influence on their future product/design purchases.  Behind these gains lie increased buying accuracy and greater success in introducing new products.  In applying the collected data to our proprietary analytic models, true insight is created to help guide decisions related to buying, inventory management, manufacturing and marketing.  Our platform is simple; we integrate the right people, channels, actions and time for you to make the most profitable decisions.

Our current clients, who include some of the world’s leading retailers, recognize First Insight’s ability to unlock the power of consumer influence to help foster creativity and innovation.  The results include unprecedented improvements in sales, gross margins and inventory turnover.

Filed under: General by Erin Higgins
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Newest feature redefines how investments are made in the retail industry

Pittsburgh, PA, April 14, 2010 – First Insight, a company that adds science to the customer voice, has released the newest version of its Virtual Customer Viewpoint (VCV) Solution, which will redefine how retail industry leaders make key decisions related to product design, buying, assortment planning, pricing and marketing. The Virtual Customer Viewpoint Solution uses information gathered through online communities (email, intranet /extranet websites, social media, etc) and applies predictive analytics to give users a real time, ahead-of-the-trend view of consumer behavior.

Available on a software-as-a-service basis, VCV provides users with a secure platform to test hundreds of items among thousands of influential consumers with unprecedented speed and accuracy. To accelerate users’ decision-making, the newest version of VCV features a breakthrough investment summary screen. The investment summary includes a scorecard for each tested item, clearly outlining those items that performed “high” or “low” based on consumer preference and pricing. First Insight has created this new tool within its solution to explicitly conclude whether any item is “worth the investment.”

“VCV is the only predictive analytic solution that offers such bold and accurate results for the retail industry,” said Greg Petro, Chief Executive Officer and Founder of First Insight. “The new investment summary clearly defines how users should invest their dollars for the greatest profitability. Our current clients are extremely pleased with both the ease of use of this solution and its ability to integrate with their current processes.”

In addition, Version 7.0 includes a new, multifaceted preference graph. The new graph highlights both a quantitative scale as well as a qualitative summary of customer sentiment. By showing this information side-by-side, users gain a more holistic view of how each item was evaluated.

First Insight’s VCV utilizes online gaming technologies to attract consumers in an engaging way wherever they may reside. These games yield data, which is then applied to the First Insight’s predictive analytics. As a part of the new release,First Insight’s games can now be customized to better fit the look and feel of a specific brand or retailer. Having this advantage offers a strong marketing tool to promote brand awareness and to build creditability among customers who participate.

“Enhancements have also been made to the usability of VCV to simplify all aspects of entering and retrieving information. “With a single click of a button, merchants and designers are now able to upload thousands of products for customers to evaluate,” noted VP of Product Development, Aaron Brauser. “Our clients have the ability to clearly visualize the results and then drill down to the detail as needed.”

Filed under: Press Release by Erin Higgins
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Let the games begin! Over the past three weeks, we have stressed the importance of cultivating a team-like relationship with your customers in this volatile playing field. Their influence can impact your products, so it is vital to keep them engaged. Unfortunately, satisfying your customers does not always guarantee a win. There are other players in the retail industry and they are ready to compete for your customers’ business. So how can you gain a competitive edge to triumph against these key players?

“Rebound the Right Way” According to the Harvard Business Review

“Are You Ready to Rebound?” asks author Donald Sull in the latest edition of the Harvard Business Review. To evaluate your readiness, Sull follows up with yet another question, “Do you miss opportunities that others spot?” As we cautiously crawl our way out of the recession, companies need to have a strategic plan. But this plan must also be extremely flexible to remain competitive. “More than ever, companies need AGILITY – the capability to consistently spot and execute on unexpected opportunities before rivals do.” Companies often look to sophisticated IT systems for guidance, but Sull reminds us it is not how much you spend, but how you spend it.

Take for example, the Spanish retail company, Zara. Zara is highly regarded for their flexible supply chain. Despite only spending one-quarter of the industry average on IT, Zara is able to consistently spot trends and indentify changing customer preferences. So what is their secret? At Zara, designers, marketing managers and buyers work side by side, which promotes the sharing of relevant data collected by each function. Sull concludes, to surpass the competition, you must use real-time data to identify gaps and to predict future trends. This data must also be easily accessible and shared throughout your organization.

Filed under: General by Sara Owczarzak
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Knowing that 3 out of 4 Americans use social technology – visiting social sites is the 4th most popular online activity (ahead of email), and spending time on social networks has tripled in the past year – it is obvious that social media is here to stay. But how can you leverage this ambiguous media outlet to help you and your business?

So far, the First Insight team has addressed the importance of not only including but also engaging customers in your business decisions.  We know consumers are willing to participate in conversations about your products.  But we also know consumers at large are savvier and no longer accept being “spoken at” by the media.  They are exposed to over 3000 advertising messages each day and have learned to “tune out” those messages that are not relatable. Fortunately, social media enables retailers to transform broadcast monologues into social dialogues.  The idea is customers who first share their feedback, and then listen, and then share again, are committing to more than just transactions.  They are developing deeper relationships with your product.

Over the past year, more and more companies are beginning to understand the advantage of strategically using social media. In “Social Media:  The New Front Row of Fashion,” Wall Street Journal writer Lauren Benet Stephenson explores the phenomenon of social media use throughout the fashion industry.  “What began as a tepid courtship between fashion and social media has become an all out love affair,” she exclaims. From Calvin Klein, Marc Jacobs, Michael Kors and Tommy Hilfiger streaming live runway shows to Oscar de la Renta and Tory Burch using Facebook and Twitter to update followers, never before has the idea of sharing been so prevalent.  But these leaders are going well beyond simply “sharing.”  They are incorporating the ideas of “listening” and “learning” to their strategy.  For example, during Tommy Hilfiger’s show streaming, fans were asked to vote on their favorite looks and to provide personal feedback on designs.

Those in fashion are not the only ones taking advantage of the growing social media phenomenon.  Take for example, Best Buy, a company that “chirps” with customers via Twitter to give technology advice.  Best Buy also uses video blogs to engage consumers beyond the world of text.  Companies embracing the social media revolution are benefiting from active integration. According to a recent statistic from the International Herald Tribune Technology conference, when engaged in active social media integration, brands reported as much as a 25% return on investment.

Please keep an eye out for next week’s final insight email in the “When Uncertainty Isn’t an Option” series.  We will be focusing on how to efficiently measure, and ultimately maximize, your products/designs performance.

Filed under: General by Sara Owczarzak
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In the first edition of “When Uncertainty Isn’t an Option,” we addressed the impact consumers have in setting trends.  We know that fashion is no longer a top down industry and customers must be included in the decision-making.  But the question still remains… will they want to participate?

“Harvard Business Review’s Advice in Going Beyond Transactions”

According to “Rethinking Marketing” recently published by the Harvard Business Review, never before have customers expected to interact so deeply with companies.  They truly want to shape the products and services they use.  At the same time however, commitment to products has never been so weak.  A recent research study by Leo Burnett Worldwide shows that 80% to 90% of people are willing to trade off or trade down when it comes to shopping. The HBR concludes there must be a focus shift driving transactions to maximizing customer lifetime value in order to stay competitive.

Fortunately, today retailers have the technologies to directly interact with consumers, creating a forum to learn what their customers want.  Take for example your neighborhood grocery store’s loyalty card.  Upon each visit grocers can track what their customers buy and how they choose to pay for products. This information helps grocery stores tailor merchandise to local tastes and customize offerings at an individual level.  Loyalty cards are an extraordinary way to collect information about customers shopping and products found already in the store.  But what if you could know what customers will buy?  Would knowing this information upfront help deliver on expectations, increase satisfaction and strengthen overall customer value?

First Insight’s powerful predictive analytic technology helps forecast a product’s performance before it is sourced or brought to market. We give you a clearer sense of demand by integrating customer feedback into buying decisions, well surpassing the direction provided by historical data. At the same time, you are strengthening your relationship with customer by giving them a more active voice and influence.  Behind these gains lie increased buying accuracy and greater success in introducing new products. For the first time, there is a proactive and accurate tool that allows you to look out the front windshield instead of the rear-view mirror when making key decisions related to buying, inventory management, manufacturing and marketing.

In going back to the original questions proposed, yes, we know customers want to shape and influence the products they buy, but how can this be done? First Insight’s unique solution provides consumers with both value and entertainment.  We engage consumers with interactive online games to play and share.  These games are distributed into various communities across the Internet – both internal to your company and across the Internet.  We can even use social media sites to connect with people who may already be talking about your company. But, games, do my customers really want or even have the time to play games?

According to the Casual Gaming Association more than 200 million consumers play online casual games each month.  And unlike traditional video games, casual online game players are typically older and predominantly female.  Nearly 60% of games played are by women with the majority between the ages of 25-54 years old. Women are attracted to the ease of use, puzzle-like nature and ability to connect with like-minded people.  Knowing the mindset of our players has allowed First Insight to create engaging games that consumers find fun, entertaining and worthwhile to play, consumer just like Katherine:

“What Would They Pay,” is one of First Insight’s original casual games.  The game is designed to resemble a virtual buying floor where participants are shown various products.  Their goal is to act like a shopper at a particular store, assigning pricing and ratings accordingly.  In the end, the customer is rewarded not only with a score, but also with the pride in helping to influence potential merchandising decisions. The games yield data, which our predictive analytics use to give you a competitive advantage.  You will have the power to know what your customers value and want before competitors.

Filed under: Articles by Sara Owczarzak
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With New York Fashion Week drawing to a close, followers of the event were able to get a new look into just how technology is changing fashion. As First Insight blogged a few months ago, designers like Norma Kamali were starting to stream their shows live via the web. As the month-long runway circuit progresses, the fashion industry is seeing more and more designers jump on this social media trend and others. Now listed among the live streaming designers are Giorgio Armani, Ralph Lauren, and Dolce & Gabbana. During the London Fashion Week, Burberry is taking their live streaming one step further: On February 23, the designer will webcast its show at events in 3D!

In a recent LA Times blog post, “Fashion Diary: Technology meets Fashion Week,” the comment is made, “The only thing left to figure out will be how to monetize the shows instantly.” Designers typically see a six month lag between runway and retail, but technology is helping them to find ways around this problem. As a different article from Women’s Wear Daily [log-in required] points out, some designers are already finding ways to do this, while at the same time taking a bite out the knockoff business. Norma Kamali and Cynthia Rowley, among a few others, have started selling their samples from the show immediately after. Rowley also had limited editions of dresses, skirts, tops, and handbags ready for sale after the show. Designers feel that this is a way to take ownership of their designs before the knockoffs can be produced. But, designers are also seeing this as a way to keep up the “fast fashion” retailers like H&M and Zara.

The WWD article continues, “French designer Roland Mouret is taking it a step further: pre-selling his RM line to retailers before showing it on the runway, so that his styles will hit stores just a month after his show.”

It is exciting for designers, retailers, and consumers that fashion is getting faster. As the world continues down a path of instant gratification, the faster fashion can be, the better it is. But in the rush, we lose the 6 month long feedback that merchants have to gauge the marketplace demand for the items. Often times, retailers are able to adjust their buys or negotiate prices closer to the delivery date. Merchants use feedback sources to fine-tune their buys along the way. Without the long lead times, retailers need a faster, more efficient way to gauge marketplace sentiment. As the lead time shortens, the stakes get higher.

Filed under: General by Sara Owczarzak
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“When Uncertainty Isn’t an Option – The First Challenge”

There is a light. After higher than projected results over the holiday season, retail sales continued to rise throughout January by 3.3% according to Thomson Reuter and Retail Metrics Inc. Although stability is in sight, the full recovery will be slow and future uncertainty still lurks around the corner.

Making such great strides over the past year has been difficult. With companies forced to adjust to the turbulent marketplace by restricting inventory and cutting costs, little room is left for error. Over the course of the next four weeks, the First Insight team will address some of the challenges that still exist in the retail industry. Our goal is to provide visibility for the future when uncertainty isn’t an option.

With fashion week in full spin, those in the retail industry are on the edge of their seats, anxiously waiting to see what the next “hot” trend will be. Well, get comfortable.  The answer may no longer rest among the fashion elite.  According to a new article in the Wall Street Journal, to truly learn what the next “trend” will be, we need to look to the street versus the runway.

In,  “What’s Out:  the Fashion Trend,” Christina Binkley proclaims the power of consumer influence in setting trends.  “People now dress the way they want, choosing looks that flatter their bodies and lifestyle.”  Consequently, those in fashion industry are left with fewer persuasive marketing tools and less control.  Fashion is no longer a top down industry.  With the surge in technology and user-generated content, the traditional distinctions between producers and consumers are becoming increasingly blurry. The democratization of fashion is here and the votes of consumer preferences and styles are endless.

The bright side is everything today is “trendy.” The challenge however, especially for retailers, is everything is not “trendy” to everyone. You must first identify who is important to you, your customers.  Then, form a close relationship with this group to learn exactly what they want and expect.

Filed under: General by Sara Owczarzak
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In “The path to successful new products,” McKinsey Quarterly surveyed more than 300 employees at 28 companies across North America and Europe to find out what companies were doing to develop more successful products. They found the most successful companies “create a clear sense of project goals early on, they nurture a strong project culture in their workplace, and they maintain close contact with customers throughout a project’s duration.” According to McKinsey, the study focused on companies in the automotive, high-tech, and medical-device industries. They  did state, “We believe that product makers of all stripes could benefit from our work.”

It turned out that more than 80% of the most successful innovators engaged with consumers throughout the development process to gauge how consumers felt about the direction the development was taking, and were able to fine tune the product before it’s launch.

High tech industries have been much quicker than retailers and brands to adopt such consumer engagement ideas, but as McKinsey points out, any company developing consumer goods could benefit from such interactions and feedback. It may be hard for brands and retailers to see how these types of conversations early in the product design phase could benefit them. We typically hear, “That’s great and I can definitely see how it would work for so-and-so, but it won’t work for me.” The truth is, that if you’re designing a product to be sold to consumers, these conversation will benefit you, and the earlier and more often you can engage with consumers, the better your product will be adapted to their needs and desires. The difficulty lies in doing this is economically feasible way while obtaining the best data you can.

Filed under: General by Sara Owczarzak
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