LONDON — Behind every big retailer is a data analytics company that few have heard of. One of them is Skypad, a software service run by Sky I.T. Group that works with 72 percent of global luxury brands such as Gucci, Prada, Fendi and Marc Jacobs.
The analytics company is now expanding into Europe, and earlier this month launched its headquarters in London.
“The reason for expansion to London was a combination of things. We want to be closer to our customers and be able to have face-to-face interactions. Secondly, we want to be closer to retailers like Selfridges and Harrods,” said Jay Hakami, chief executive officer of Sky I.T. Group.
Skypad software collects data from retailers around the world and allows brands to see how their products are performing based on a variety of attributes such as color, size, fabric and geography. It also helps track sales performance via wholesale business and the brand’s own stores and online channels.
“We take multiple data sets, bring them together, cleanse them and bring them to brands in a report. For Saks, the data is being used for a number of things — season management, what sells, what doesn’t sell in different regions. The intelligence allows for better merchandising on the retail floor,” Hakami said.
According to Hakami, mismanagement and merchandising is the biggest issue right now in retail, but he’s confident that data can provide retailers with a better understanding of their buy. He sees the biggest changes among department stores.
“Nordstrom is going strong. We’re seeing the changes that Saks is making to revamp the stores. Bloomingdale’s is also making changes to add more luxury concession stands in their stores. Department stores are doing well if you combine their dot-com and brick-and-mortar together,” he said.
He credits the use of analytics to brands’ growth — especially at Tory Burch. According to Hakami, the brand is now more analytical compared to the previous four years. “Today, they have the trends, by color, by geography, at their fingertips. This gives them the ability to be more profitable and not over commit on merchandise,” he added.
Not only do luxury retail and fashion players use Skypad, beauty retailers such as L’Oréal are using numbers to determine their value chain, too. The main difference between fashion and beauty, Hakami argues, is that there are no markdowns; the focus is on having enough stock in stores so as not to miss a sale.
At the moment, Skypad is being used for L’Oréal’s luxury division and the company’s next goal is to capture the consumer product division and retail chains.
“We have not gone into that space yet: It’s a project for this year, and I know it’s going to be different from the way they track luxury,” he said.