Data Driven

Posted: May 15, 2018 in Uncategorized

By R.C. Seely

BETWEEN THE NEGATIVE coverage in the media and the comments by the president, internet giant Amazon is getting beaten up in the public eye. And it’s all because of a lie perpetrated by their rivals. Many companies didn’t plan for the internet when it was new and over built on outlet stores. That’s why they have been losing money and had to contract.

You talk to the emerging online giants, they see brick-and-mortar stores as still a viable option, they weren’t properly utilized is all.

Take specialty glasses and sunglasses online retailer Warby Parker, it launched in 2010, and is expecting major growth. “By the end of 2016, it had 36 stores… Today, it has a total of 63 locations across the US and Canada, with plans to hit 90 by 2019,” reported Entrepreneur magazine, in its March issue.

How is this possible? You may ask. Retail stores are dying off so fast they may need to be placed on the endangered species list. Real estate firm Crushman Wakefield tallies the numbered of closed stores in 2017 at 9,000 and an additional 12,000, or more, by the end of 2018.

And Warby Parker isn’t alone in thinking store expansion is a sound idea. The Canadian company, Tease-Tea, plans on opening doors in New York. British based athletic brand Gymshot is considering opening stores in Los Angeles.

What do these companies know that the larger retailers don’t? Nothing really, they simply have proven better with the knowledge. It’s a system referred to as Deep Data, a set of algorithms based on the previous buying habits of past customers. Mostly it’s a s common sense sociological analysis–monitoring where they have the most sales when they were online only and only building there. Sounds like a practical model to me and like a winning strategy too.

E-commerce companies Birchbot, Everlane, Bonobos are talking about taking about going brick-and-mortar as well. Even though there’s a certain amount of risk to this strategy, Warby Parker maintains it worth it and appears they are not the only one.

In the Entrepreneur interview they also argue there are lessons to be learned:

“The physical store also creates data that no online store ever could. For example, Warby Parker recently tested a kiosk-style pop-up in … a mall in lower Manhattan… The company learned something unexpected: Customers don’t like trying on prescription glasses in a public setting: it’s too intimate… But sunglasses sold well.”

Deep Data science is comparably new, but it already appears to be an effective tool to avoid overbuilding and while some retail insiders say be cautious, ignoring Deep Data might be a missed opportunity. Used efficiently Deep Data may lessen the gamble.

R.C. Seely is the founder of americanuslibertae.com and ALTV. He has written books on pop culture and has an upcoming new release–Confused Yet?: Understanding the Utterly Incomprehensible.

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