facebook Created with Sketch. instagram Created with Sketch. linkedin Created with Sketch. twitter Created with Sketch.

The Future Of Retail: Metrics That Matter

| 4 min read

With the summer coming to an end and the fall preparation on, it will be good to take a look at the Retail landscape from a consumer perspective for the future of retail. It is also the right time to review your goals and start to measure what matters. As Peter Drucker said, ”What is measured improves”.

With the morphing of the retail landscape, what is important to you changes and hence what to measure.

With the connected consumers demanding “Control“, there is a need for Brands and Retailers to fundamentally shift their approaches to win consumers.

Here are some of the imminent key shifts:

slides content courtesy: Ibrahim

The fundamental shift is from a pipeline of value delivery to a participative value delivery to consumers and their community. It is selling memories and not just products. Winners in the future will shift their approach significantly.

slides content courtesy: Ibrahim
slides content courtesy: Ibrahim

The future of retail is not “IN A BOX” anymore, and Brands will create “RITUAL-tailments

slides content courtesy: Ibrahim
slides content courtesy: Ibrahim
slides content courtesy: Ibrahim
slides content courtesy: Ibrahim

There is a need to “Learn and Go”. If you wait for 100% certainty, you will be 100% late. Speed is key.

slides content courtesy: Ibrahim

You can get the full view of the change in the Retail context in this video. With this new context, we wanted to compile and share a list of Retail Metrics which is a blend of traditional metrics and Future-Ready metrics. You can get the entire list of 22 metrics below.

Download Retail Metric PDF

We will dwell on one metric in this post. As fashion is full of forecasts, it is important to measure the accuracy of the forecasts and ensure that this metric improves over time. The inspiration for this comes from the world of machine learning. When machine learning models predict, there must be a method to choose the right model. The metric used to measure the accuracy of the prediction is the F1 Score. 

Fashion forecasts are done by style using a numeric (1-5) or an alphabetical scoring (A to C) to indicate how good the potential of the style is. To simplify this, let the styles be categorised as Winners, Mediocres and Losers (pre-season) by each forecaster.

Once the actual results come in, plot the actual vs. prediction in the template below:

After plotting the prediction vs actual occurrences of a forecaster, the F1 score can be computed as follows

F1 Score = 2 * (Precision * Recall)
(Precision + Recall)

We need to compute Precision and Recall

Precision =  True Positive
(True Positive + False Positive)

Recall     = True Positive
(True Positive + False Negative)

To get clarity on TP, FP, TN & FN, we will take a Cricket analogy.

True Positive: Umpire gives a batsman NOT OUT when he is NOT OUT

True Negative: Umpire gives a batsman OUT when he is OUT

False Positive: Umpire gives a batsman NOT OUT when he is OUT

False Negative: Umpire gives a batsman OUT when he is NOT OUT

If the F1 score is calculated every season and forecaster, the brand will have a clear idea of the strengths of forecasting in the organisation.

This is where the power of technology comes in to enable every decision-maker with the predictive powers of machines.

Stylumia’s tools come with the potential to enable informed decision making by all stakeholders. You need tools that provide relevant metrics in a form to take quick actions pre-season, in-season and post-season. Hope you found the metrics and shifts useful. In case you have a metric that is critical for the future of retail that we have missed, or any comments on the metrics please share here.

Subscribe to our insights

Subscribe now to receive our thought leading insights right into your inbox

Related Blogs

OutRetail: Retail Decision Sprint – A Key Strategic Advantage

| 3 min read In today’s dynamic retail environment, characterized by rapid shifts in consumer behavior and market dynamics, traditional decision-making models fall short of addressing the complexities businesses face. This necessitates a radical approach known as the Retail Decision Sprint. Inspired by Atif Rafiq’s insights on modern problem-solving and Daniel Kahneman’s exploration of human cognition in “Thinking, Fast […]

on March 17, 2024

OutRetail: Mastering Market Dynamics with AI, A Unified Strategy for Brands and Retail

| 3 min read In the fast-evolving retail environment, mastering market dynamics stands as a cornerstone for navigating the turbulent waters of ever-changing consumer preferences and trends. The intriguing concepts of entropy from both thermodynamics and information theory offer a fresh lens through which brands and retailers can strategize across diverse sectors such as fashion, home, electronics, and consumer […]

on March 16, 2024

The Sneaker Recipe: Crafting Style, Silhouette, and Fabric in the US Market 2023

| 4 min read Delve into the pulse of sneaker culture in the US market, where winning attributes reign supreme. Fabric, silhouette, style, and price points intertwine to define the very essence of sought-after sneakers. Join us as we dissect the intricacies of materials, decode the diversity of silhouettes, and unravel the styles that captivate American sneaker aficionados. From […]

on November 23, 2023