Case Study: AI Strategies to Create More Hero Products

Executive Summary

In an innovative move away from traditional market expansion strategies, a leading women’s wear brand sought to escalate its growth not by increasing product selection but by amplifying its ‘hero products’. These products, known for outsailing others by 10 to 20 times, represent significant business potential. Facing the limitations of conventional market insight methods, the brand partnered with Stylumia to discover and develop these big bets more effectively, aiming to create more hero products.

Business Challenge

Traditionally, brands have sought to derisk business operations and drive growth by increasing product selection. However, this strategy often dilutes brand identity and pushes brands towards mediocrity. Our client, a distinguished women’s wear brand, decided to take a different approach by focusing on expanding their range of hero products. Hero products are unique as they perform exceedingly well, often at a rate of 10-20 times the median sales rate within their categories. Identifying potential hero products is challenging, especially when relying on traditional methods like wholesale and retail buys, which are limited by the insights of traders, wholesalers, or retail staff. These methods, while providing some level of feedback, are constrained by their limited perspective, which fails to fully capture shifting consumer tastes and competitive dynamics. Moreover, these conventional approaches rely heavily on first-party next, which is often not comprehensive due to the relatively small market share most brands hold.

Solution Overview

Acknowledging the need for a groundbreaking strategy to identify and capitalize on new hero product opportunities, our client turned to Stylumia for a solution that transcends traditional market research methodologies. Our approach combines cutting-edge data analytics with deep market insights to more accurately predict and validate potential hero products. This solution not only identifies what existing products could become market leaders but also explores new product ideas that have the potential to perform exceptionally well, aiming to create more hero products effectively.

Current State Analysis

Currently, only 5-10% of the brand’s product selection across different categories qualify as hero products. The process to predict which products might achieve hero status is archaic, involving extensive global market scans, travel, and analysis of past data. From these inputs, a mood board is created, followed by a line plan. This line plan is then transformed into samples for wholesale and retail bookings, which are used to shortlist products for the main range. The quantities bet on each product are adjusted based on these bookings, which presupposes that distribution channels can accurately predict future consumer demand—a significant assumption that often does not hold true given the dynamic nature of consumer preferences.

Identifying the Gap

The current approach to identifying and developing hero products is fraught with inefficiencies and uncertainties. Relying heavily on outdated forecasting methods and the subjective insights of wholesalers and retailers leads to missed opportunities and a lack of responsiveness to market shifts. The need for a more dynamic, data-driven method is clear, one that can leverage real-time consumer data and advanced analytics to more accurately predict which products will resonate with consumers and achieve hero status.

Stylumia’s Strategy

Understanding the brand’s current limitations and their desired state, Stylumia intervened with a dual approach to both validate and discover new product ideas. Initially, Stylumia deployed its proprietary consumer demand intelligence platform, which is always on and continuously curating new product ideas based on the latest trends and competitive dynamics relevant to the brand’s unique position in the market. This strategic intervention aimed to create more hero products.

Implementation

The implementation began with mapping relevant data sources to the brand’s existing product development process. Stylumia’s tools integrated seamlessly with the brand’s flow of range finalisation, enhancing their existing models. The intervention had two primary objectives: firstly, to validate the brand’s existing product ideas, providing a robust framework to either greenlight or terminate product concepts based on real-time consumer data; and secondly, to introduce entirely new trend-driven product ideas that were not previously considered. This effectively augmented the brand’s existing processes, acting as both a filter to refine current selections and a discovery tool to create more hero products. In effect, helped the brand build their consumer brain.

Project Execution

Stylumia went beyond traditional methods by implementing a state-of-the-art AI demand forecasting model with multimodal capabilities, including vision, text, and time series analysis. This model, customized using the brand’s data alongside curated relevant market data with future signals, resonated with the dynamic consumer demand of the market the brand operates in. The brand’s domain experience was integral to the model build and test process, ensuring that all domain knowledge was embedded in the data preparation. Before deploying the model to predict future potentials, it was rigorously tested against past data to ensure accuracy, with performance measured by the lift over the current baseline.

Results and Impact

With the integration of new product ideas from the outside-in intelligence and the new product demand predictor, the brand’s ability to create more hero products improved dramatically, showing a forecast improvement of 5-10 times the current baseline. This success was initially demonstrated in one business line, with plans to expand this approach across other lines. The project highlighted how intelligence, when combined with actionable strategies in product creation and demand forecasting, can act as a force multiplier, enabling the brand to not only meet but exceed its growth targets.

If you are interested in scaling your business with depth and density of selection and want to create more hero are products like this brand, please reach out to us for a free consultation here.