But are they using this data in the right way?
Jessica Murphy, cofounder of True Fit, a “discovery platform” that works with brands and retailers to help consumers connect to the best fit and style in the footwear and apparel, said while companies compile a lot of data about shoppers they often don’t have a “single view” of that consumer. Murphy also said many companies lack the same single view of itself and its inventory.
Here, Murphy discusses with WWD some of the challenges facing brands and retailers who are looking to optimize data as well as some of the ways data can be used to mitigate costly returns.
WWD: What do you see as some of the reasons why retailers are not fully leveraging their own data?
Jessica Murphy: Retailers have been working for years to connect internal systems, that historically did not talk to each other. These efforts are massive undertakings and often take years to complete. Inventory management has been one of the first places that retailers have concentrated on to create one centralized view of inventory across all locations — warehouse, web site and stores. For the retailers that have successfully achieved one single view of inventory, they’ve gained advantages in logistics, inventory management and customer service — such as “buy online, pick up in-store.”
While retailers have come a long way in their efforts to connect systems and data in their systems, there are still many examples of disparate systems that exist within organizations.
WWD: Can you give an example?
J.M.: Some of the largest retailers in the world still don’t have the ability to connect the purchases and returns that happen in store with the purchases and returns that happen on their web sites. So for example, if there is a customer that buys an item online, and then next month makes an in-store purchase, the retailer often does not have the ability to know that both of those purchases were made by one customer.
Some ways this affects the consumer is that it impacts a retailer’s ability to market to customers effectively or serve more relevant product recommendations to its customers. While there are some retailers that are beginning to lay the foundation for a achieving one single view of a customer, it will still be years before this is standard for all retailers.
WWD: Do retailers have the capacity to optimize data?
J.M.: Most retailers don’t have the resources in-house with the expertise needed to extract real value from the data in their systems. The production of strong analytics and the ability to seamlessly connect data amongst internal system is work that is done most effectively by a combination of data scientists and developers.
While some retailers do have small in-house development teams (relative to other organizations within the company), most legacy retailers do not have in-house data scientists. In the future, building out these organizations will be critical to extracting and connecting data across their platforms to more effectively merchandise, assort, market, test and leverage third-party technologies.
Companies like True Fit help in this area since our expertise is in data and specifically in connecting the data that we receive from our retail partners for the benefit of driving more sales and delivering new insights to help retailers manage their business more effectively.
WWD: True Fit gathers a lot of data, but what does it involve? And how can it be used to mitigate returns?
J.M.: On the mitigation side, True Fit’s core technology is one that helps increase conversion to sale and drives down return rates by leveraging the “connected” data in our platform — tens of millions of consumers, billions in transaction data and product knowledge across thousands of brands — to give consumers confidence about the items their purchasing when using True Fit to shop.
To do this, customers simply answer a couple of very simple questions (no measurements required), such as “tell us about one item in your closet that you love and fits you well,” and in return we simplify the decision-making and buying process by answer two key questions for the consumer: “what size should I buy?” and “how will it fit me?”
On average, 98 percent of shoppers visiting a web site are just looking, and the number-one reason cited for not buying is hesitancy around unsure fit. So by just providing that little bit of confidence that consumers need, True Fit is able to: drive down total returns by 10 to 25 percent; drive down size related returns by over 50 percent; and increase conversion to sale by two to three times.