The state of data strategy in fashion and retail
Brands and retailers today are tasked with a tall, if oft-repeated, order: Know your customers.
Getting a handle on customer data has become table stakes, even in fashion — where zeroes and ones seemingly clash with the subjective sartorial flair that has entitled luxury heavyweights. Now, scrappy startups with direct-to-consumer strategies and close relationships with customers are catching attention.
At Glossy’s Data Strategy event in New York on Tuesday, we gathered brands and agencies together to discuss how they’re gathering, understanding and integrating customer data into their business strategies. Here’s what we learned.
Having a direct connection with your customers is critical.
Shira Sue Carmi, the founder of business management firm Launch Collective, spelled out the troubles wholesale brands are facing today: They don’t know how customers are responding to their brand until it’s too late.
“The wholesale production cycle takes about a year, and costs anywhere between $200,000 and $500,000,” said Carmi. “By the time you get customer feedback back from your retail partners, you’re two or three cycles away from that first cycle. You’re $1 million in the hole before you know what customers think about your brand.”
To combat this disconnect from production cycle to customer feedback, Carmi recommended running trunk shows to get face time with customers, and putting together capsule collections and between-season shows in order to get more product out to customers faster.
Jodie Chan, the director of marketing and communications at Altuzarra, said her brand has made the most out of what would otherwise be a dead-end situation. Altuzarra, a wholesale-only brand, directs traffic coming to its website to its retail partners. The brand can then gather data around customer search and purchase intent. What’s missing: closing the loop on whether or not a purchase was actually made. For now, Chan said, the website helps the brand decide whether or not e-commerce is a worthy investment.
Faster metabolism means more customer touch points, and vice-versa.
Cheryl Kaplan, the president and co-founder of direct-to-consumer footwear brand M.Gemi, said customers reach out to the brand with specific requests because they know how quickly the brand reacts to buzzy trends and high-performing products. This way, M.Gemi can stay on top of customer sentiment alongside its fast-churning production release schedule, which brings new items to its site every Monday.
“Our customers notice how fast we respond to feedback, and so they don’t hesitate to point out gaps in our inventory,” said Kaplan. That applies to customer feedback on social media, too. “When a post gets a reaction, we know what to double-down on in production.”
Segmentation and personalization can make customer data easier to swallow.
Big numbers can blind brands. When you’re pulling in millions of customer touch points and engagements on a regular basis, it quickly becomes overwhelming, and plenty of customer insight goes unused.
The answer: segmentation. Breaking customer data down into segments help brands figure out how to allot resources and where to focus specific energies. Lauren Price, senior director of partnerships at Lyst, said her fashion-focused search platform, which holds 3 million brand products in its database, takes in 4.5 million data points per hour. This massive volume of data is then broken down to help brands understand how customers are searching and shopping: by designer, by subcategory, on mobile.
“We use databases to drill down into specific customer behavior, and then we feed that back to the brands,” said Price. “The goal is to help retailers understand what customers want to know about them.”
The full potential of data is still untapped.
Phil Gomes, digital svp at Edelman, gave an explainer on blockchain and the “Internet of Things,” and how they relates to fashion. The takeaway: Once retailers warm up to it, blockchain could change how we see the products we buy and sell.
“Blockchain, plus Internet of Things, equals an assured supply chain,” said Gomes. “When people think blockchain, they think bitcoin. But what’s really happening here is a building of trust and transparency throughout the production cycle.”
Using blockchain, retailers could have more clarity of their production cycles, improving efficiency and distribution. With a unique fingerprint for each individual product, each item — like a luxury handbag — will be able to tell a specific story. Gomes said it sounds futuristic, but the technology is here. Brands just have to trust it.
Attribution is the final frontier.
“Instagram is a black box,” according to one attendee during a town hall session at the event. That’s difficult for brands spending a lot of energy there.
Brands are feeling more pressure to have a robust social media presence across platforms, from sharing content on Instagram Stories to testing chatbots on Kik, but attribution remains elusive. Right now, retailers are juggling other priorities, and those with small teams and tight resources find third-party services too expensive. Erin Kleinberg and Stacie Brockman, founders of the agency Metier Creative, spoke to the fact that likes on Instagram don’t really mean anything and that tracing ROI from influencer partnerships is shaky.
“Context is what matters on social media,” said Kleinberg. “You can’t just post and hope for results.”