How analytics takes consumer products from brute force to insight-led innovation

By John Dubois

I recently had the pleasure of participating in a lively podcast debate on “Transforming Retail.” Our chosen mission? To look under the hood of data analytics in the retail industry. And explore how retailers can create compelling buying experiences that customers will come back for – time and again.?

During the discussion, several keys to success came up. Like being constantly curious about what consumers really want. The differences between shopping and buying. Focusing on people insight rather than raw data. And blending that insight with visualization and human intuition to open new viewpoints.

Answering the five W’s…

All these ingredients help to make up the “secret sauce” for successfully applying analytics in retail. But how about the consumer products companies selling their wares through retailers? In my view, the data analytics opportunity for them is equally compelling – arguably even more so.??

Why do I say this? The reality in consumer products is that if we don't understand why particular people are buying particular products – the “why in the buy” – then we're going to do a poor job of making products those people want to spend their money on.?

This leads us to a pivotal question: Can we find easier, faster and better ways to answer the five W’s? Which are,?Who's buying??What are they buying??Why are they buying it – some long-held preference or sudden need??Where can we reach them and get their attention to encourage purchase? And?When should we do that – is there a point in their journey where one more piece of information will tip them into a buying decision??

…by tapping into the power of the consumer “megapanel”?

As we all know, market research has been trying to answer the five W’s for decades. But today, the traditional approach of running a customer survey every year or 18 months is well past its use-by date. Why? Because since about 2000, more and more consumers every year – rising now to about eight in 10 – have been telling us what they care about online.

They’re doing it through words. Which, in the online world, translates into valuable and actionable data. Lots of it. A figure I mentioned during the podcast was that the amount of data the world produces is?doubling about every 18 months?– with 80% to 90% of that being created by consumers.?

Of about eight billion people worldwide, 80% are online, and probably 40% contribute content. They’re offering their perspectives. Reaching out proactively to brands or retailers to say, “Hey, I have a problem” or “Thanks, this was delightful.” Or maybe just sharing their latest purchase or experience with friends.?

Nobody’s telling these people what to say – their opinions come straight from the heart. For consumer products companies, the resulting data represents an incredible resource: a global “megapanel” of people taking the time to tell us openly and honestly what evoked an emotion, triggered a passion point, or prompted an aesthetic response. And once we have the data to understand a given person’s emotions and responses, we can use AI to start designing and making products they’ll likely want to buy.

Active listening in action

So, to realize the full potential of the megapanel, we need to do a better job of listening – not just gauging whether customers are happy or mad at us, but actually trying to understand what they're saying about what they really want. Are they telling us that there’s a feature set that's not in the market that they would find hugely useful for some reason? And is there something we might produce to fill the gap?

This is how the megapanel data can be used to transform product innovation and manufacturing. But it also offers a way to reinvent how those products are positioned and marketed to target specific consumers. A real-world example of both in action? One that’s become a renowned case study for many in the industry is?Fossil Group. It’s a global player in personalized lifestyle accessories like watches, handbags and jewelry – and an award-winning innovator in using consumer data analytics and insight.?

Here’s the story. A few years ago, Fossil decided to find ways to use feedback from customers to power its product development. It wanted to enable its customers to drive the decision-making from the very beginning of the process – simultaneously boosting the likelihood to purchase, accelerating time-to-market, and achieving a closer balance between supply and demand.???

To achieve all this, the company answered the five W’s about the target consumers – aspirational Gen Z’s – by using AI to mine data from social media conversations and uncover sentiment and trends. The outputs were then validated through crowdsourcing and in-market panels and adopted as the basis for its product development and end-to-end marketing. The results were dramatic: development time cut by half, millions saved in launch costs, and revenue up 10%. You can find more detail?here.

Finding the faster path to value

A closing thought? A couple of decades ago, when I started my career in e-commerce and personalization, there was an approach to making and selling consumer products that we used to call “brute force.” It meant that if you didn't have a perspective based on anything concrete, you’d just try seemingly random recommendations out and learn along the way. Eventually – after a lot of time and money – you’d land in a good spot.?

But today, there’s a much more direct route to success. One that involves inspiring your creative people with consumer data insights to guide their human ingenuity – and put your whole business on a faster path to higher value. Put simply, it’s time to tap the megapanel.

To hear the?Transforming Retail?podcast on retail analytics with Thomas Harms , Nicole Srock.Stanley , and Ian Johnston .

The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organization or its member firms