How today’s product developers are adding data-backed insights to the product development and merchandising process
It’s no secret that the retail industry has recognized the need to invest in new technologies designed to improve their merchandising activities. Operational areas like merchandise planning and inventory management have been significantly enhanced through automation and advanced analytics. The adoption of these new, some now foundational, merchandising technologies is bringing greater operational efficiencies, faster speeds to market and even improving markdowns and returns. Now, product developers have begun to turn to new technologies enabling data gathering and analytics to keep up.
Baseline: Important technology trends in data for retail product development
The ongoing evolution of consumer behavior, customer expectations and a growing desire for fresh new products has brought new challenges to product teams. Trends are moving faster than ever, magnifying the importance of decision-making closer to market.
Brands are continuing to compete for customer interest (and maybe even loyalty) by producing the right styles, in the right colors, messaged the right way. Product developers are seeking this information, and now more than ever are getting to it through data. Put simply in this Forbes post, when brands and retailers successfully analyze data, “they are able to understand important information about consumer purchasing behavior [and] address a consumer’s needs.” And fortunately for product teams, customers want their voices heard, making that data highly accessible.
A recent Kalypso Viewpoints article frames up this data-driven retail product development transformation well. First, product teams need to be exceptional at product, delivering differentiated freshness and innovation.
Second, to gain or maintain a competitive edge in today’s retail environment, product teams need to invest in technologies that allow them to “discover, create, make and sell better products faster and with more value”. Viewpoints expands on transformation strategies in retail product development, offering up key trends including the adoption of integrated Platform-as-a-Service (PaaS) solutions and digital tools that can combine the front-end/design stage with the development stage, feeding data throughout.
More effective software and platform solutions are becoming available to help take guesswork out of important product development stages. And like MESH01’s integration with PTC’s FlexPLM, integrations are enabling a more seamless connection of data, and steps, throughout the product development process.
Join the data-driven conversation
Brands large and small pull their teams together frequently along their product development and merchandising calendars. With end goals of finalizing a product line designed to spark customer excitement through innovative products, driving sales with key styles, and avoiding markdowns and returns, colleagues from different functional areas bring their insights to the table. These days, the internal guidance that comes from these critical conversations is often data-driven. From financial analysis of last season’s or last year’s sales performance metrics to marketing and consumer insights, there’s a wealth of data-backed information being used to make important product decisions. Now, as new lightweight tools become more widely accepted and adopted in product development, product developers are joining the data-driven conversation, too.
Through concept testing and product testing, today’s product developers are in a unique position to capture the voice of the customer closer to market. While last year’s sales data like units, sell-through, margin etc. will continue to be foundational KPIs, the speed and uncertainty of trends between seasons demands more recent insights.
Now, product developers are using concept testing surveys within the development season to not only validate new product concepts, but also better understand their customers’ current interests and needs. They’re finding out what their customers were thinking last week instead of last year.
These insights are playing a valuable role in decision making from color to features and design and even whether or not a product should make it into the line. Here’s a deeper look at how customer feedback generated within the product development process can add value to your product line.
- What should the product be? We agree that exceptional product design, development and merchandising demands a top-shelf blend of art and science. And while many products are good examples of analysis-paralysis induced compromises, tools are available to help designers, developers and merchants make sure they aren’t just talking to themselves. Concept and product testing surveys are great examples of tools that allow brands to include the voice of the customer early in the development process, and contribute directional information to guide and validate your fresh new product. Product developers who leverage concept testing feedback data are bringing that voice of the customer, and new value, into their team meetings.
- Will our customers actually buy it? It’s common for assortments to have a range of products each with different roles to play. Some styles intentionally have a low unit forecasts, knowing that their job is simply to catch a customer’s eye (knowing they’ll likely land on a “safer” style). Other items are your workhorse key styles – perhaps lacking exciting features but doing steady business day-after-day, season after season. A product that nobody buys, however, should never make it into the product line. Whether you’re targeting a niche or the masses, product developers are leveraging tools to gauge customer’s willingness to buy.
- Which features and attributes really matter to our customers? Innovation and performance are essential, but understanding which attributes really matter to your customers can mean the difference between a five-star success and 50% off. The best products solve customer problems and meet their expectations. If your customer expects their feet to stay dry, the difference between water-resistant and waterproof is key. Further, most products boast a range of features and performance attributes, so knowing what your customers prioritize and what they don’t need enhances your development and bottom line.
Bonus Tip: Sometimes brands notice a startling difference between what they call something and how their customers explain it in concept testing and product testing feedback. While internal language doesn’t necessarily need a change, identifying these language patterns in your product research gives you the opportunity to message your product’s features and attributes effectively, speaking your customer’s language.
“Stacking” up product development technology
As lightweight solutions become widely accepted additions to the product developer’s toolkit, it’s important to avoid unnecessary tools. It’s also important to not use the wrong tool for the job. If you or your brand is just starting to look at how new technologies can improve your product development, paying close attention to what a solution was designed to do – as well as the potential to integrate it into surrounding solutions – can help your company avoid frustrated users and unused subscriptions.
Revisiting your product development process can help identify areas that could be greatly improved by access to relevant data. It can also help you see where connecting different technologies could bring new efficiencies to your product team. Below are common product development stages with potential for transformation:
- Style and trend analysis through market research and concept testing
- Digital prototyping to accelerate early reads and reduce sampling time and cost
- Product testing efficiently with real customers using your products in their intended environments
- PLM integrations that bring greater transparency to product insights
- Go-to-market enhancement content for effective product messaging and promotion
For example, MESH01 was purpose-built to conduct product research and testing much more efficiently and effectively than a common survey site. And because of the downstream value of that data, it was made accessible within the PLM environment to speed up a product’s teams access to critical product information. Further, the opportunity to generate go-to-market content like genuine customer testimonials, images and video, required the platform to easily facilitate the gathering of that content for multi-channel use.
In short, the retail industry is rapidly adopting new technologies across their operational areas including product development. Today, there are efficient and effective tools that bring new value to the product development process. Their lightweight software and platform models are making them more accessible, and more adopted, than ever. Product developers looking to enhance their process and products and join the data driven-conversation just need to connect the right tools to the right steps.
If you want to learn more about how MESH01 can bring data-driven value to your product development, let’s connect