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Human intuition in the omnichannel era

December 20, 2017

Your staff are your “secret sauce”  Tweet This

When you look back at some of the iconic films and TV series from the 60s to the 80s like 2001: A Space Odyssey, Star Trek and Back to the Future, it’s surprising how many ‘futuristic’ inventions that seemed fantastical are now a reality, or close to being so.

We haven’t achieved a time machine or teleporter yet, but flying cars, wearable computers and fully automated factories are here to stay. And, if Mark Zuckerberg and Elon Musk are successful in their new ventures, we’ll soon have human brain/computer interfaces.

Data-driven retail decisions

This kind of innovation isn’t just happening in the world of technology, it’s also being applied to the field of data science. With major advances in computing power and self-correcting algorithms, it is now possible for retailers to use predictive analytics to fine-tune their forecasting, replenishment and price/promotions decisions to improve efficiency and increase margins and revenue.

Even in a sector like fashion, which is notoriously fickle and seasonal, Evo Pricing’s work with the Miroglio Group has shown how effective strategic pricing management can be in this omnichannel era. A case study documented by a team from the University of Turin and the University of Rome showed how the various tools employed by Evo Pricing resulted in improvements across the board.

Wisdom of the staff

Perhaps the most interesting area the study highlighted is that of distribution management and restocking because it illustrates what we call our “secret sauce” – the role of store managers in the decision-making process.

We asked the question, “What’s the right number of pieces of a particular size of a particular item to send to every store in a given week?” We found that, through the prism of sales and replenishment efficiency, sell-through using Evo Pricing tools alone increased by 24%. However, when using Evo Pricing tools and input from stores managers the increase was a staggering 41%.

In a sense, this “wisdom of the staff” is a cornerstone of omnichannel retailing. While many organizations rely 100% on quantitative data, albeit from a wide variety of channels, their neglect of qualitative intelligence can turn out to be costly.

Advantages of store manager input

Staff on the ground are getting customer feedback on a continuous basis and developing a ‘feel’ for what works in their particular store. This leads to insights that not even the most sophisticated computer algorithm can match:

  • Article/size level accuracy for each individual store
  • The discovery of new customer requests otherwise not served
  • Information about the popularity of items in real time (“internal survey”)

Let’s take a couple of examples of customer-driven decision making.

Customer inconvenience and lost sales

How often have you been to a chain store and they have sold out of an item you want? You ask them to check other stores and they find the product at a location 50 miles away. The customer has a couple of choices: give up, or ask the other store to hold the item for 24 hours (if possible). Whatever the decision, the customer has been inconvenienced and there is the possibility of a lost sale. Trusting store managers to manage sales and replenishment is a proven strategic tool that can avoid both customer inconvenience and lost sales.

Staff + algorithms find long tail niches

Our second example is a little out of the ordinary but illustrates how regular staff/customer contact can open up new opportunities. Employees at a store that was many miles from the sea reported customer interest in purchasing swimwear, something the store had never previously stocked.

The manager put their faith in their staff and started stocking swimwear.

This belief was quickly vindicated. Although the quantities sold were not massive, they generated sufficient revenue and profit to justify making the experiment permanent. It also provided clear evidence of how algorithms and staff can work together to serve “long tail” niches.

So, whenever you are setting up your omnichannel structures, don’t just put your faith in big data – use the “secret sauce” of human intuition.


Would you like to learn how to leverage the synergy created by combining the power of computers and human intuition?

Talk to Evo Pricing about the kind of data-driven insights that are already helping companies around the world increase profitability by hundreds of millions of dollars.

To find out more about the wisdom of the staff contact us here.

About the author

Martin Luxton is a writer and content strategist who specializes in explaining how technology affects business and everyday life.

Big Data and Predictive Analytics are here to stay and we have only just begun tapping into their enormous potential.

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