Sales data from September showed an uptick — excluding auto sales — across several retail sectors. In fashion apparel, though, department stores lagged and specialty apparel retailers struggled. And off-price retailers and fast-fashion firms continued to outpace other apparel segments.
It’s a difficult market that analysts expect to get even more challenging. And while there are no “silver bullet” technology solutions to change the tide and boost sales, experts say that retailers and brands need to deploy strategies that leverage consumer insights and data.
Preliminary findings from a McKinsey & Co. Inc. and WWD industry survey, to be revealed later this month at the WWD Apparel and Retail CEO Summit in New York, found that 80 percent of respondents described the role of consumer insights as key to their brand’s decision-making functions. But many noted that they’re not making enough investments to act on it.
Nathalie Remy, partner at McKinsey & Co. Inc., said “industry-wide, there have been structural pressures that has resulted in slower growth. There are more competitors as well as higher costs, and the consequences have put enormous pressure on top-line sales as well as on the bottom-line.”
Coupled with rapidly evolving consumer expectations, which include “shoppers who are smarter, but who are also bombarded with more offers than ever before,” the result is a retail and fashion apparel market that is being forced to transform. The leaders, Remy said, are companies that are “taking advantage of and leveraging technology in marketing and in sales as well as consumer insights to strengthen sales and margins.”
McKinsey noted in its preliminary research that “beyond web analytics, companies are increasingly seeking out new sources of data to inform decision-making — from internal sell-through data attributed at more detailed levels than before (e.g., style, trim, color, print, fabric) to consumer feedback, web searches and CRM data, to newer sources of external data (e.g., social media, web scraping) and market research.”
Remy said data segmentation is critical. McKinsey researchers said what drives success is “an integrated, unified systems infrastructure that enables the user to slice and dice at different levels to easily understand what’s working — and what’s not — and where there might be white space.”
But there are challenges even with deployment of technology. The McKinsey researchers said “data consolidation is often the most challenging part, with multiple sources, formats and tags, making it difficult to create a unified view of what is going on.”
Remy has developed a tool called “Rapid Design 2 Consumer” to help brands and retailers make better informed decisions. She acknowledges that today’s retail market is challenging, but without data and consumer insights along with a clear strategy, “companies will turn into followers instead of leaders.”
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