According to Krishna Nikhil, chief merchandising officer at Ssense, a luxury retailer based in Montreal, data is its secret weapon.
Nikhil and Jennifer Schmidt, senior partner at McKinsey and Co., detailed how Ssense uses data and why other retailers and fashion brands should follow suit — Schmidt said only 4 percent of apparel companies are considered “leaders” in applying advanced analytics to their operations.
Schmidt began the session explaining the importance of using data, which has the opportunity to unlock $1 trillion to $2 trillion in value for global retailers and people who are leading in data adoption are 74 percent likely to outperform businesses that aren’t using data.
But Schmidt added that using data in an effective way means building a data culture. That starts with having an executive team that gets behind data, but also includes the following steps: stay true to a business problem; reward output over process; hire people from outside of the company; look at small data to unlock different opportunities, and spend to scale its applications.
For Ssense, it was important to use data to improve and optimize existing processes as opposed to utilizing it for forecasting. Eighty percent of its shoppers, which are split 50 percent male and 50 percent female, are under the age of 34. Nikhil said Ssense, which receives 32 million page views a month, has resonated with this customer by having a point of view, which comes across with its content — they produce five editorials a week. For one of its most successful stories, Ssense used data and tracked what people were searching for online and on its e-commerce site. They used that to create a video showcasing trending sneakers in an unconventional way.
Ssense also uses data to enable speed, whether that’s how long it takes for the site to load or how soon customers receive their purchases. They’ve brought data into the off-line shopping experience with its new, 10,000-square-foot flagship store, where customers are able to select the items they want online, set up an appointment and try them on in store with a stylist. Because this service was so popular at its first store, Ssense dedicated two of the five floors to fitting rooms and they have between 60 and 75 appointments each day. Purchases from these appointments represent 80 percent of the store’s sales.
Going forward Ssense will offer its data to brands selling on the site including Stefano Pilati, who will launch his new line, Random Identities, with the retailer. They are also working with Element AI, an artificial intelligence company that will work with Ssense’s large database of imagery to develop an algorithm for future uses. Ssense acquired Polyvore earlier this year but hasn’t gone into much detail about what that purchase means although it’s easy to assume that the decision was data-driven.
Schmidt ended the session by outlining what leaders who embrace data do differently from leaders who don’t. They are twice as likely to embed analytics into top 10 decision-making, four more times as likely to apply analytics across four or more functions, six times more likely to use multiple data sets per case and incorporate internal and external data, and six times more likely to offer employees access to data.