To follow is a guest post from Quach Hai, VP of Retail Solutions at PTC. First Insight and PTC have collaborated to extend the value of Product Lifecycle Management beyond design and product development into a smart platform that leverages predictive analytics and machine learning. You can learn more about our Optimized Line Planning solution on our website.
Product lifecycle management (PLM) solutions help retailers and brands manage their entire product development process so they can bring the most innovative and profitable products to market. From creative design, to material sourcing, to merchandising and line planning, numerous decisions must be made behind the scenes to ensure that products are on-trend. The challenge for retailers is recognizing those trends early in the development process to reduce the time it takes to go to market.
By leveraging First Insight to incorporate Voice of the Customer (VoC) data into your Retail PLM solution, you bring valuable consumer insights directly into the same database that informs your product design and development decisions. This guarantees that whoever iterates a product design or selects which fabrics to use has direction from the market demographic itself. Here are four significant results of incorporating VoC data into your PLM solution.
1. Reduce costly excess inventory
Ideally, the amount that you’ve invested into materials and production costs to build your inventory matches consumer demand. When it doesn’t, your bottom line is affected.
VoC data helps you predict what product features will yield higher revenues and uses predictive analytics to increase the accuracy of your consumer demand forecast. This insight enables you to put the right amount of the most in-demand product in stores, reducing costly excess inventory which can lead to markdowns that erode profits.
2. Improved margins
PLM solutions provide users with visibility into complex global supply chains, which allows product designers to select material suppliers that will have the biggest impact on their margins.
VoC data impacts margins by helping retailers and brands accurately price their products. Retailers must be able to avoid excessive markdowns and identify appropriate entry price points for new products with no sales history. Using consumer-driven data helps to determine demand for products at differing price points, giving retailers the insight they need for a more informed and effective pricing strategy.
3. Product designs aligned with consumer demand
Consumer demand is hard to pinpoint in an industry as fast-paced as retail, footwear, and apparel. Trend cycles have shrunk from a year to as little as three to five weeks, according to research from the Boston Consulting Group. Product designs must be aligned with consumer demand as early as possible to ensure brands are on-trend and on-time. Market “misses," which social media can instantly magnify, can be costly and hurt your brand reputation.
Reviewing your product designs with consumers before mass dissemination allows you to know exactly how consumers feel about particular designs. Bringing this data into your PLM solution helps align your brand with current and emerging design trends, and more accurately forecast demand before going to market.
4. Better assortment strategies
Identifying which product lines resonate the most with consumers has a direct impact on your assortment strategy. By understanding what consumers are most likely to buy, you can optimize your store layout, improve inventory levels, and increase sales potential. Leveraging VoC data is the first step to a better assortment strategy, which you can implement by making certain adjustments within your PLM solution. Predictive analytics turns this consumer-driven data into insight that drives decision making. Ultimately, your goal is to deliver the right products to the right customers at the right price, so including their perspective in your assortment strategy should be a necessity.
Choosing a PLM solution that integrates Voice of the Customer data
If you want to reduce excess inventory, maximize margins, align your product designs with consumer demand, and bolster your assortment strategy, you need a PLM solution that can easily integrate VoC data. With a single connected PLM platform that enables end-to-end transparency, designing and developing successful products and improving customer engagement is more attainable than ever.
Interested in learning more about PLM solutions that can integrate VoC data? Download this eBook from PTC.