We’re not kidding.
Launching a new children’s line starts with deep analytics.
The internet has changed merchandising forever. An emerging online retailer of children’s clothing wants to launch a new line of accessories via their website. Where do they start? With analytics – and a deeper, clearer understanding of their current customers and product offerings.
Three key objectives are set:
1. Enhance understanding of existing customers.
Develop a detailed demographic and psychographic profile of the retailer’s current female consumer. Analysis of which children’s clothing products they currently buy, and why, helps predict their response to the new accessory line.
2. Maximize awareness of an interest in the new product line.
Determine the best methods for the retailer to introduce, promote, and put the products in front of the right customers.
3. Optimize product placement and promotion to boost sales. Merchandising online requires a much different approach than in brick-and-mortar stores. Analytics and research insights are used to determine positioning both within the retailer’s website as well as on other web sites to drive e-traffic and sales.
For this project, the primary service required is:
Analytics Services(link to more info below)
Deep analysis of the company’s existing customer data gives a thorough understanding of the current customer base and what motivates women to purchase the brand’s products. Purchasing data tells what the existing consumers are likely to buy in the future.
But the true value to the company comes through the “prescriptive” aspect of the Analytics Services. The analytics team predicts future female consumer behavior, identifies emerging trends, and develops detailed personas for the company’s female consumer of the future. This information is synthesized and specific suggested courses of action are developed to address likely market shifts.
With these valuable insights generated through analytics, the client also requires:
Advisory Services (link to more info below)
Advisory Services works directly with company leadership and key personnel to apply the insights gained through analytics and maximize marketing efforts. The Advisory Services team provides impetus and counsel as the company implements the prescribed courses of action. The company gains immediate expert advice, the ability to react at a moment’s notice, and flexibility to adapt strategies to best meet the consumers’ expectations.
Research Services (link to more info below)
Information is gathered from female target consumers regarding their feelings about the new product line and what emotional drivers will compel them to choose the retailer’s brand over another (see METHODOLOGIES listed below).
Three specific analytic/research methodologies are required:
- Data Extraction and Compilation
Before analysis can be performed on the retailer’s existing data, it must be collected and prepared. The retailer’s product assortment, transactional sales by product, and customer-centric data is extracted and compiled for use. Attribute content is reviewed for relevancy, accuracy, and richness. Imputation is performed where necessary, and anomalies are detected and removed from consideration. Full-scale analytics are then performed to create profiles of existing consumer groups.
- Online Focus Groups
A group of current customers (geographically, demographically, and psychographically disparate) are engaged in online focus groups to obtain their opinions concerning the new line of accessories, the retailer’s product assortment, promotions, and pricing. In addition, current market research trends are analyzed.
- Data Mining
Various data mining techniques are performed on the resulting data, including cluster analysis, to identify groups or structures in the data that are similar. The analysts search for relationships and dependencies between attributes, and then generate a data summarization to provide a more compact representation of the data either visually or in report format. High-level correlation and segmentation analyses are also performed.
- Merchandising Enhancements & Analytic Reporting
The data mining report answers questions including: what products are currently selling well online, which products are most frequently purchased together, what price points and promotions maximize margin, which current products are most similar to the new product line, and which customers are most likely to be interested in the new products. Using the answers to these questions, the retailer’s team is assisted in shifting merchandising strategies to achieve the remaining objectives of maximizing awareness and boosting sales of the new accessories. Useful reporting metrics are developed to measure the effectiveness of the merchandising strategies, the marketing strategies, and to monitor ongoing trends in product promotions and offerings.
(Due to the confidential nature of research projects and client agreements in force, specific results cannot be share. Outcomes have been synthesized based on an amalgam of results from similar projects.)
The shift in merchandising strategy due to the data mining efforts generates significant awareness of, and interest in, the retailer’s new product line. From day one of the soft product launch, product placement and promotions were optimized with online and media partners.
Although perhaps not the initial focus, other consequences of this effort include a rise in overall product sales and upsell opportunities, an improved website experience and mobile site enhancements, and strengthened customer loyalty.
Through the efforts directed at the launch of the new accessory line, the retailer also realizes improvements and increased margins in other product lines—likely due to a deeper understanding of its core customer.
Internally, the retailer receives actionable recommendations for additional merchandising enhancements as well as future analyses that prove invaluable. In addition, significant insights are gained into the retailer’s current customer base and product assortment. The analytics team delivers a full suite of findings including: a published data mining report, online focus groups transcripts, data visualization charts, and ongoing merchandising effectiveness reports.