“Fashion-business fluent” is a sought after skill these days — and Spain-based retail merchandising solution firm Nextail speaks the language with a cadence that gets results.
Nextail’s approach is to lean into the human element of retail by culling and collating algorithmic data through its industry-specific technologies. And for Nextail, that means gleaning data that allows retailers’ natural skills to “take a leading role.”
Here, Joaquín Villalba, founder and chief executive officer at Nextail, talks to WWD about the story behind the brand, the power of its data and the state of the industry.
WWD: Tell us about Nextail. What brought the brand into being?
Joaquín Villalba: Our industry is incredibly rich. It enjoys a great mix of art and science. However, great advances on either side haven’t always been aligned. Until now, there has been a great lack of applied data analytics in driving business decisions. Thus, fashion has inherited a significant number of operational inefficiencies, especially related to buying and merchandising. These limitations make it more and more challenging to meet customer expectations, reach business goals and, worst yet, they create unnecessary waste.
Sometimes there’s just a better way of doing things. As an engineer by training, my eye is trained to spot how we can do things better, faster and more efficiently, especially when it comes to improving things for the greater good. So, after spending a few years in the industry as head of European logistics of Inditex, the opportunity to take fashion retail to the next level was clear to me.
Nextail was born in 2014 out of this desire to make the retail world a better, more sustainable place. And that means better for everyone: for retailers, their staff and customers. The only way for this to be possible was by pushing past limitations of the existing retail model and putting the right analytical capabilities and automation in place.
By placing technology and data science at the heart of decision-making, I knew we could align supply and demand through improved predictions and automated decision-making. Instead of being reactive and rigid, retailers could become agile and predictive. As a result, retailers use less of the world resources while improving customer service. Happier customers, better margins and less waste.
This clear vision made it easy to find like-minded professionals from within the industry with this passion for using data and advanced technology to make a positive, tangible impact on the world around us. And from there, Nextail, which started as a three-person operation, quickly grew into the large international team that we have today.
WWD: What is Nextail’s approach to streamlining the industry through algorithmic, retail-specific technology?
J.V.: Innovation requires wide engagement in order to bring transformation. It needs an actual change in behaviors and mind-sets across the whole organization. Real transformations come from changing how business decisions are made and executed.
Adding an online store is just adding a digital channel. It doesn’t really transform much. In many cases it has actually further increased organizational and data silos. As a company, when you embrace core digital transformation, you become an agile organization able to automate decision making based on data across channels.
Understandably, it’s not easy for brands and retailers to make sense of all the data they generate. Nextail is unique in its way of automating decision making based on hyper-local fresh data, using a bottom-up approach, with specific fashion merchandising capabilities and easy explainability of its algorithms’ results and impact.
The power of the Nextail product would be of little use if it didn’t drive enough adoption. That is why early on we invested in user experience and impact visibility. In order to make sure that we deliver on our customers’ needs, we closely follow our NPS metric, and post-March lockdown Nextail scored an average of 58 (with 35 being the tech industry average, and anything above 50 being considered excellent).
WWD: From a retailers’ perspective, why is Nextail’s data different?
J.V.: Essentially, Nextail puts the power of data into the hands of physical retailers so that their natural skills take a leading role. By giving them the same data capabilities that online players have, physical retailers can enhance discoverability with better assortment and availability. That way, brands have the best of both worlds and the ability to amplify the offerings of data in a physical setting.
While it’s true that the line between online and physical brands continues to blur, and everyone moves toward hybrid retail, it’s important to recognize that originally each brings different skills to the business of retailing. The superpower of online retailers is their ability to manage data at scale. Physical retailers, on the other hand, have the unmatched ability of understanding the psychology of customers in a physical environment. They use it to create a distinctive experience, an emotional connection with the consumer. The lack of this physical savoir-faire is what results in the Amazon store feeling a bit more like a flea market rather than a curated, delightful retail offering.
But engagement is only a first step toward transformation. The final step toward a full shift in mind-set is being able to witness results. Nextail is not a black box, and its impact is fast, clear and measurable. In addition to the organizational impacts such as better team alignment and freeing up time from manual tasks, the economic impact is evident at all times. Nextail displays this impact in two ways: through KPIs such as stockout levels or lost sales per product/channel/location and the calculation of the actual sales increase generated through predictive stock movements considering demand before and after products have been moved.
WWD: What’s next for Nextail?
J.V.: This year, the entire industry had many challenges to reckon with. The need for digital transformation, the importance of agility, the pressure to act sustainably — these factors all came to a head in 2020. While retailers suddenly found themselves needing to act on them urgently, the challenges themselves were nothing new. But it’s not easy to just change the way things have always been done. It sometimes takes a leap of faith. Or a global pandemic.
Today, there are no doubts about the fact that data is the best way forward for meeting customer demands, future-proofing the business and enabling sustainable practices. And brands don’t want to end up on the wrong side of the digital divide. So, this has opened up new opportunities for Nextail to help brands that are ready to put data and advanced analytics at the very core of what they do, pairing digitalization with sustainability.
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