10-Jan-2011
Retailers Increase In-Market Experimentation by 21% in 2010
WASHINGTON, D.C. & NEW YORK – January 10, 2011 – Applied Predictive Technologies (APT) announced today that leading retailers increased their use of scientific testing by more than 21% in 2010 compared to 2009. APT’s findings, based on a survey of leading US retailers, highlighted the fact that businesses became increasingly open to testing new customer-facing strategies as the economy began its protracted recovery.
The range and depth of testing varied significantly by retailer type, with grocers running an average of 55 tests in 2010 (up from 36 in 2009) to big box and department stores, which ran an average of 150 tests in 2010 (up from 71 in 2009). Specialty retailers saw the smallest increase in testing in 2010, executing an average of 121 tests (up from 116 tests in 2009).
Of the more than 3,000 tests run in 2010 by the sample group, 25% were focused on changes in pricing and promotions, while another 22% targeted changes in merchandising and assortment. Other areas of interest included marketing and media (17% of tests) and labor and operations (10% of tests).
Retailers continued experimenting with new strategies to tie online promotions and social media campaigns to increased brick and mortar sales. Retailers demonstrated a greater interest in understanding whether online media presented a lower cost alternative to traditional media channels, such as newspaper inserts. Compared to the year prior, 2010 witnessed a 110% increase in the number of loss prevention tactics tested, though this category composed less than 5% of total testing. Similarly, 2010 saw a sharp increase in labor and operations tests, rising 65% over the prior year.
While most categories saw an increase in activity in 2010, tests involving capital expenditures from full-scale remodels to new fixture installations remained flat compared to the prior year.
“Retailers are constantly looking to use testing to understand consumer responses to new ideas in a low cost and low risk environment before rolling changes out across their network,” said Anthony Bruce, CEO of APT. “In running these tests, some of the most sophisticated retailers are realizing that certain strategies that might not work in areas where unemployment is above 12% actually do work in areas that are recovering more quickly. Retailers are using test results to introduce new ideas more intelligently and in a more targeted manner than before.”
About Applied Predictive Technologies
Applied Predictive Technologies (APT) is the world leader in helping organizations harness the potential of Test & Learn, a powerful fact-based approach for choosing, targeting, and tailoring strategic and tactical actions for maximum impact and profitability. More than 50 Global 2000 leaders have licensed APT’s Test & Learn software, including Subway, Kraft, Wells Fargo, Holiday Inn, Staples, Lowe’s, Victoria’s Secret, Food Lion, and Toronto Dominion. APT has offices in London, San Francisco, Taipei, and Washington, D.C. Learn more about APT at: www.predictivetechnologies.com.
Next Steps:
