Entry posted 6:38 AM by Greg Girard, IDC Analyst
Monday January 23, 2012
Title: Signs That 2012 Might Be the Breakout Year for Collective Intelligence
Entry: I’ve blogged about the merits of collective intelligence (CI), aka wisdom of crowds, as a “new and
improved” way of “reading the tea leaves” to identify which forthcoming products will be hot and which not. I know it works–MIT’s center for collective intelligence, to cite one example among many, has assembled several proof points. Two developments last week, mid-January 2012, suggest CI is about to gain traction in retail.
Here Comes the Bride–Collective Intelligence at the 2012NRF Big Show
David’s Bridal told its collective intelligence story in one of NRF’s Big !deas session this week and of its experience with First Insight, Inc. With First Insight’s product market testing tool, consisting of a game called “What Would They Pay”, distribution of the game to populations of choice, and predictive analytics, David’s Bridal now tests all gowns under consideration for the next assortment within a 72-hour cycle, with test-report cycles now running at a clip of less than a week.
The approach is similar to that Asda started with a few years ago–buyers in market snap pictures, write quick product descriptions, and distribute the images and descriptions to a crowd of consumers. The key innovation here is the game, which is a nuanced version of the old “The Price is Right”. The nuances of the game and the predictive analytic model are a closely held part of First Insight’s intellectual property.
David’s Bridal reported several areas of gain:
Quicker time to revenue–three months taken out of time to market, 5.5 months compared to 8.5 months with in-store testing 20% to 30% reduction in in-store testing costs
A 30% reduction in the number of styles tested in store
Fewer “dogs” and the markdowns they cause, saving $100K on one style alone by reducing the buys Increased revenue on “winners” with deeper buys, a 120% sales increase for one product
For David’s Bridal the “What Would They Pay” game isn’t a total replacement for in-store testing. Photography can be a challenge for white dresses and complex products are hard to render and describe–at least for now.
