Big data is, of course, one of the business world’s most in vogue buzz words. It may even be having an impact on how various industries function. Case in point, today’s Wall Street Journal reports that several firms are selling data and services to fashion brands and retailers (Fashion Industry Meets Big Data, Sep 9).
The forecasting companies offer analysis of fashion shows, data on the current market offerings and—for an added fee—bespoke research and consultancy services. The data are generated by teams of staff employed to trawl art exhibitions, events, restaurants and even scientific journals.
Fashion companies use the data to plan their latest collection or catwalk show, with the online services replacing the bulky and intermittent style books that designers and merchandisers used to receive. …
“[Fashion forecasters] have always been used but they’re more accessible now because of the technology,” says Marks & Spencer creative director Belinda Earl, who has just launched her first collection for the U.K. high street bellwether. “They are important, not always to lead but to re-evaluate and help confirm you’re on the right track.” …
Retailers are also turning to number crunchers to improve execution. U.K. start-up EDITD trawls the Internet to gather data on who’s selling what, how many products are flying off the virtual shelves and how much are they going for to guide companies in their merchandising decisions.
There are several things here that I find interesting. First, it is not too surprising that fashion firms are willing to invest in analytics. Stocking chains like Marks & Spencer or Kohl’s involves some large-dollar decisions and paying to reduce the uncertainty involved makes sense.
The question is how to use the insights that these firms generate. Improving in-store merchandising or guiding discounting seems to make a lot of sense. If the analytics provider can say, “Hey, it’s not that consumers aren’t buyer your fuchsia sweaters this season, they aren’t buying anyone’s fuchsia sweaters,” that’s helpful. A retailer can redo its displays and discount the offending sweaters.
It’s less clear to me how helpful the forecasting is before stuff hits the stores. Don’t get me wrong. I understand that if one firm could know now exactly the styles and colors that are going to be in style next summer, they could clean up. But if every major player is using essentially the same data, shouldn’t they all move toward similar offerings? That is, these trend forecasts risk becoming self-fulling prophesies as everyone concludes that, say, floral print skirts are what is going to be in style. How then does one firm gain an advantage? If every brand and every retailer is offering similar floral print skirts, they can’t all be successful and that seems to invite early and often discounting that would undercut the advantage of getting the current trend right.