APT: Retailers Increase Testing Year-Over-Year By More Than 15%, Embracing Trend of Big Data Potential for Bottom Line Improvement

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Applied Predictive Technologies (APT) announced today that retailers conducted an average of 98 tests in the most recent calendar year–up more than 15% from last year.

Applied Predictive Technologies (APT) announced today that retailers conducted an average of 98 tests in the most recent calendar year–up more than 15% from last year. The findings, based a survey of APT’s retail clients, indicate retailers are increasingly using in-market tests to evaluate new initiatives before rolling them out broadly. The increase in testing comes at a time when many executives are focused on realizing the full potential of Big Data to capture and quantify profit-improving opportunities.

“Retailers are continuing to introduce new ideas to the market, and many of them are realizing that scientific testing is the most analytically accurate approach to determine how a new initiative will impact key performance metrics,” said Anthony Bruce, CEO of APT. “As an example, when our clients design new promotional offers, they need to understand which promotions are driving incremental transactions and increased basket size, and which promotions run the risk of giving away margin. In-market testing is crucial in identifying which ideas work, which ideas do not, and which ideas need to be tailored to improve profitability.”

A separate report, authored by the Economist Intelligence Unit (EIU) and commissioned by APT, gives additional insight into the importance executives are placing on analyzing Big Data. When asked what they believed would improve decision-making within their organization, the most popular factor amongst respondents was “better ability to analyze data,” with 53% of responses. Another 22% cited “running more trials or tests before making a decision.” Further, 45% of respondents who agree that their company is growing faster than the competition also say they can predict decision outcomes by analyzing tests and trials.

Increasingly up against “showrooming” and challenges to customer loyalty from online stores, testing continues to grow in frequency and importance. In addition to increasing the number of tests conducted per year, retailers are increasing the speed with which they analyze tests. On average, retailers using APT’s software reported analyzing tests in about 30% of the time required with previous methods such as using spreadsheets or general-purpose statistical platforms.

Retailers are also showing a trend of testing more across various functional areas, primarily in marketing, pricing, and merchandising. Marketing & Media tests comprised 41% of all tests in 2013, and Products, Pricing, & Merchandising tests made up 31% of total tests. The remaining tests were in Capital Expenditures (19%) and Labor & Operations (9%).

The survey included more than 50 sub-categories within each of the functional areas to provide more insight into testing strategies at leading retailers. Of these categories, retailers reported conducting the largest percentage of tests in Promotions (14%). In-store Fixtures (8%) and New Product Introductions (8%) were also among the top reported sub-categories.

For more information, please visit http://www.predictivetechnologies.com.

About Applied Predictive Technologies

APT is the world’s largest purely cloud-based predictive analytics software company. APT’s Test & Learn™ software is revolutionizing the way Global 2000 companies harness their Big Data to accurately measure the profit impact of pricing, marketing, merchandising, operations, and capital initiatives, tailoring investments in these areas to maximize ROI. APT’s client portfolio features the world’s best known brands, including Walmart, Target, Staples, Lowe’s, Victoria’s Secret, Chico’s, and others. APT has offices in Washington, D.C., San Francisco, London, Tokyo, and Taipei. Visit http://www.predictivetechnologies.com to learn more.

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