As a retail segment, fashion and apparel design have always walked the line between a creative endeavor and meeting the demands of a global, consumer-facing industry. But in a world where consumers can virtually buy any product from any retailer with a few clicks, apparel brands have found themselves to be far less influential than they once were.
“Historically, brands had the ability and liberty to define taste and trends,” said Matt Field, cofounder and president of actionable product intelligence software provider MakerSights. “But that's no longer the case.”
With the entry of new competitive threats on all sides — whether it be Amazon, Walmart or dynamic, digitally native specialty brands — and the rise of eCommerce and other new business models to boot, retailers have seen a rapid shift in consumer access to information and purchase availability.
In short, the consumer is at the helm and the cost of poor decision making is higher than ever. Brands can't afford to bet wrong on what products will appeal to customers.
“Only making subjective, gut-driven decisions in this environment is going be a tough way to run a business,” Field noted. “You see all the time in the form of rampant discounting, inventory issues and declines in customers shopping with brands both in-store and online.”
MakerSights enables brands, largely merchant design and planning teams, said Field, to test consumer sentiment and preferences around various product designs. Brands distribute surveys to existing customers via email or a brand's social media presence.
Analyzing this first-party data allows brands to optimize capital allocation between different items and styles in upcoming lines — leveraging the insight provided to boost production spend on popular items while cutting back on or completely halting less desirable products.
“It's the single biggest moment in which brands are putting their innovation and R&D dollars at risk, so to speak,” Field said. “But what's also critical is that we also capture the sales data of those products once they hit market.”
To date, MakerSights has gathered intelligence on thousands of products and millions of consumer responses, allowing the company to — with 90 percent accuracy—correlate consumer sentiment to market results. This essentially allows brands access to actionable, machine-learned forecasts based on relationships between sentiment and sales.
Field noted that apparel and other brands are increasingly focused on understanding and optimizing SKU productivity — how to generate fewer total products while increasing the resonance of each product, thereby generating more profit per dollar spent.
As MakerSights grew, the company saw demand from brands for data-driven applications across the entire product lifecycle.
“Brands immediately wanted to do two things,” Field said. “They wanted to move earlier into the cycle to the design and concept phase and they wanted to apply MakerSights for hindsight.”
Of the latter, when apparel items beat or underwhelm expectations, the information flow that decision makers receive on these outcomes is limited to raw sales data and anecdotal feedback from store associates.
Additionally, MakerSights has seen brands succeed when leveraging customer survey data in direct marketing, engagement and loyalty building. As consumers shift away from brand loyalty toward whichever commerce experiences best suit their needs, brands have been looking for ways to rebuild loyalty.
From MakerSight's surveys, brands receive thousands of signals of intent from customers that can directly turn into purchasing down the road.
“We create what we call 'advocacy lists' where we allow brands to immediately download the people who responded positively to certain products,” Field said. “They can use that information to drive personalized marketing.”
Whether in the form of a direct email when the new product is launched, a personalized display ad or other marketing assets, Field said that brands equipped with specific customer preference data generally see a five to eight times conversion rate when leveraging personal taste and intent in marketing.
This personalization is the broader value this sort of data insight can provide brands, Field said, noting that “over 50 percent of millennials actively want to co-create with brands. When you provide the ability to be a part of the process, we see that customers come back to shop at a much higher rate.”
These solutions address pressing needs not just for apparel brands, but for a much broader swath of brands, retailers and others looking to find ways to adapt to the fast-changing face of commerce.
For their part, MakerSights has already begun to expand into adjacent industries — footwear, accessories, home goods and beauty — after seeing inbound interest in their data-driven solution.
Over the next two to five years, Field said he sees the company expanding into an even broader range of categories, including consumer packaged goods.
“An exciting thing to think about over the course of this and next year is how we engage with major retailers — thinking about the Macy’s and the Bloomingdales and Nordstroms of the world,” Field said.
These major retailers are facing many of the same challenges as smaller brands, Field said, noting that the focus for MakerSight's on that end would be how to manage buying patterns, optimizing spend between private label and between wholesale accounts.
“Being able to play in that part of the cycle, to provide value in that relationship between wholesaler and retailer,” Field said, “is something that will be interesting for us as the industry continues to evolve.”