The Center for Data Innovation spoke with Doug Kofoid, CEO of EDITED. EDITED collects retail market data to help other businesses analyze market trends, perform competitive benchmarking, and optimize profitability. Kofoid discussed the future of retail data intelligence and the benefits retail customers will derive from data-driven innovation.
Kir Nuthi: As global retailers feel the pinch of the cost-of-living crisis, why are retail intelligence and data analysis needed now more than ever?
Doug Kofoid: With the retail world more competitive than ever, coupled with an ongoing cost-of-living crisis, the margin of error for retailers is becoming increasingly small. Retail intelligence tools are essential in helping retailers navigate periods of economic turbulence, especially around pricing.
EDITED’s platform has proven a useful ally for our global retail clients when they’ve looked to adjust pricing, as the software can project how tweaks in pricing across a range of product categories will impact their gross margin and profitability. The sales data we collect can identify which products or locations are affected by economic trends, and retailers can act swiftly with a more granular level of precision. This more surgical approach helps to maximize revenue while controlling operational costs.
Nuthi: EDITED focuses on “merchandising experience.” Can you briefly describe what that means?
Kofoid: Our Market Intelligence tool helps retailers understand the market they operate in, particularly around pricing, promotion, and assortment. These insights often reveal opportunities in their given market and product areas that are seeing heavy competitive pricing pressure. We can dive into any market data a retailer could need, be it pricing, colors, or patterns, and help them use those insights.
Another of our tools, Enterprise Intelligence, works by integrating some or all of a client’s data such as web analytics, inventory, order, and customer data into a smart data model and then performing use case-driven AI algorithms to surface insights about opportunities in the business. Together, these two tools offer a best-in-class ongoing analysis of their market performance.
Without action, analysis serves a limited purpose, as in a fast-moving retail landscape, humans are unable to respond at scale. Our automation features help solve this need by generating product feeds that can be shared into your planning systems to make tweaks and improvements across your business. For example, if multiple products are selling well across different categories online, EDITED can quickly respond and send signals to change the page assortment to reflect this.
Nuthi: Your chief retail scientist argues that there needs to be a data-based customer-centric approach to retail. Could you unpack how focusing on customers impacts your retail data analysis?
Kofoid: Our chief retail scientist Michael Ross puts it quite succinctly—as a retailer, you need to have a fundamental understanding of how much of your growth is coming from your existing customer base and how many new customers you need to acquire to deliver on your business plan. This approach has been widely researched, and it is not a question of “if” but “when” businesses start taking the required steps to propel their merchandising toward a customer-centric goal.
Retailers need to pay more attention to “who” (the customer) makes them the money rather than “what” (the product) makes them money. And this is why it is important to be aware of customer behavior, which has undergone a fundamental change.
Nuthi: How do social media trends and other pop culture news affect and enhance your retail data?
Kofoid: Social media often defines what’s popular in your customers’ world. Trends are emerging from more sources than ever before, so we make sure you have access to GoogleTrends, Pinterest search terms, Instagram, and TikTok trend insights to give you a 360-degree view of what’s happening in the market.
Our analysts play a big part in spotting these trends, informing our clients, and helping them act upon the tips. Analysts will scour the market for new trends, aided by our Market Intelligence platform, and produce sector-specific reports detailing these new developments. We then supply the key data points and insights that our customers need to enrich their research and inject some much-needed predictability into the whole process of trend-following.
Crucially, our data and analysis help our clients cut through the noise and make sound business decisions, picking the trend that is as profitable as it is popular. For example, with the cost-of-living crisis showing no signs of abating, our analysts predict a return to Normcore is undeniable. Straight and slouchy jeans, plain tanks, and trench coats have seen increased sell outs, while 90s minimalism and grunge stories have emerged on the runway. We can track how many new products aligned to these categories are entering the market and which are sell-outs, and help our customers engage with a trend to drive incremental revenue every season.
Nuthi: What do you see as the future of retail data intelligence?
Kofoid: As alluded to earlier, merchandising is seeing a significant shift towards focusing on the individual customer over product hierarchies. This customer-centric focus will see strategies become increasingly granular when it comes to prices, promotions and even the assortments the customer sees online and in the stores.
More broadly, retailers are becoming increasingly sophisticated with their use of data. This usage is only likely to grow, aided more and more by the application of new technologies like AI, which we see causing massive disruption across every industry. It’s exciting to see how this is impacting the industry, like predictive AI technologies enabling retailers to enact dynamic policies instantaneously and without human interaction. Change in retail is incredibly fast-moving, but it’s gratifying to see these new technologies enabling greater and greater retailer-customer interaction and success, and our tools playing a part in that.