Some of the most successful retailers are famed for their decisive nature and ability to act on little more than gut instinct. Yet in today's complex and fast-changing market place, intuition has to be supported by facts, in most cases now, based on solid customer data and feedback rapidly collected and objectively measured.

When making decisions on which new concepts and products should be introduced, test-and-learn is becoming an established way of working among those brands and retailers outperforming their peers.

Testing new developments provides crucial insights

Testing new ideas in a controlled environment, evaluating the impact and refining or rejecting the concept is at the heart of test-and-learn. Amazon and eBay were early pioneers of this approach, measuring how innovative changes online impacted customer navigation every day.

Apple went one step further with its AppleSeed programme, with select customers given exclusive access to its new products pre-release so designers could incorporate feedback. This gave customers an influential role in the development process as well as fostering brand loyalty.

Testing should be applied to a range of retail decisions

Test-and-learn works best for tactical changes and strategy execution and can be applied equally well to store and online developments, such as testing a new format or webpage layout, which are the more usual and obvious examples. However, the approach can also assist retailers seeking to optimise their supply chains.

Some of the best retailers can predict how digital developments and changes to the customer journey are likely to impact sales and align their inventory plans accordingly.  Additionally, several retailers are adopting decision-making tools that allow real-time customer feedback on products to be analysed before final range decisions are made and orders placed.

Test-and-learn is critical for fast fashion brands. Quantitative feedback on early product prototypes and samples will increase hit and adoption rates. An early exponent of this approach was Zara, which generates more than 15,000 ideas a year from its 350-strong design team and needs to quickly identify the winners.

Additionally, Dixons Carphone successfully applied test-and-learn to store-based issues, implementing software to predict the incremental profit impact of new multichannel strategies. It analysed new customer interactions and how changes online altered their habits in store.

Ikea has refocused on its core competences in product and service innovation. A test-and-learn approach has helped it to roll out wireless charging pads in its UK restaurants and develop a vegetarian alternative to its famous meatballs.

Also on the food front, major restaurant chains have widely adopted test-and-learn to judge customer reaction to menu and recipe changes. Pizza Hut started such a programme to aid the development of a new menu, working with a small number of trial stores to identify new items that both enhance the customer experience and improve profitability.

Test-and-learn requires a different mind-set

Retailers need to clearly identify what quantifiable outcomes they need to achieve for a change to be worthwhile, which will be a departure for some who prefer to "get on and do".

Test-and-learn is best approached as a business-wide initiative with executive level sponsorship to get staff on board. Retailers need to be prepared for teams to break existing rules and ways of working.

One area this will impact is finance. The CFO has an important role to play in test-and-learn, by establishing and maintaining budgets which development teams can readily access to develop new concepts. Only when a concept has been tested and there are sufficient facts to support its value, should it be necessary to develop a comprehensive business case and request funding.

Data driven decision-making and collaborative ways of working are foundations of test-and-learn and retailers may need to address the wider implications on their teams. Apple, for example, made several thousand middle managers redundant, creating space for more technically orientated staff to progress.

Agility should be a catalyst for test-and-learn

Increased popularity of agile software development is partly behind the rise of test-and-learn for consumer-facing technology developments. Several software providers offer cloud-based services to interpret big data sets and offer real-time solutions. These expedite test-and-learn activities, reducing the likelihood of "paralysis by analysis".

Agility also allows developers to dramatically decrease their lead-times using configurable technologies and working in discrete project teams. It is best suited to innovative environments, where design concepts need to rapidly evolve – allowing the most creative and intuitive of retailers to quickly find out whether their ideas will work.

The Kurt Salmon team writes a regular column on technology in retail for Essential Retail.

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Kurt Salmon