When it comes to using data, are we willing not to be lazy?
Let’s talk about decision-making. Data-driven decision-making.
Because despite the buzz about advanced analytics and artificial intelligence in retail, it’s the corporate culture that matters.
I received this past week McKinsey’s article on how top fashion industry performers use data analytics and consumer insights to stay ahead of the pack. (www.mckinsey.com/industries/retail/our-insights/the-need-for-speed-capturing-todays-fashion-consumer.)
Two key takeaways.
Push ‘em together and see if sparks fly.
Takeaway number one: over the past decade, the vast majority of fashion companies have battled to barely break even, while the top 20 percent have delivered all of the industry’s economic profit.
Takeaway number two: top performers use data analytics when developing concepts and planning lines – the heart of the creative process. Underperforming companies tap data much later in the process, only after they have developed the product.
What do you think?
Am now studying Thinking Fast and Slow, Nobel Prize-winner Daniel Kahneman’s 2011 summation of the best of decision research.
A key concept, explained early in the book, is the Law of Least Effort.
In layman’s terms, it says that we’re predisposed to do the least amount of thinking we think we can get away with.
Whether studying by ourselves, in a relationship, or when responsible for a billions-of-dollars business.
It’s our standard mode of operation. Our default.
When left unchallenged, anecdotes substitute for rigorous trend analysis. Old, comfortable answers are used for new problems.
And intuition and executive hunches stave off the sweat-inducing, brain-draining work of data acquisition, aggregation, and analysis.
As we enter this age of AI in retail, it’s increasingly clear:
We can do the technology.
But technology – as is the case throughout retail – does not, by itself, create or deliver value.
Especially in this age of advanced analytics.
As the industry gathers this week for Shoptalk, and countless PowerPoint decks hail the magic of AI, we’d be wise to ask of our corporate culture:
Are we willing not to be lazy?