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Why Artestry and Why Now?

Innovations in the Retail Marketplace

(a note from Artestry's founder)

Please give me 3½ minutes to explain...

The world is full of breakthrough ideas that have yet to take hold. Seeds of innovation, planted in the minds and writings of academics, can take years to germinate. Then, at random, the discourse changes, interdisciplinary friends talk over a beer, diverse backgrounds come together, and a new hybrid innovation takes hold and grows new life in a mature industry.

I thought more about this "random convergence" after reading two bestsellers: Skloot's The Immortal Life of Henrietta Lacks and Gladwell's The Tipping Point. Both share how powerful shifts can come out of nowhere – when raw materials or ideas come together at just the right time in the right combination. In the sad, amazing story of Henrietta Lacks, one doctor's cell sample (from a hard-working African-American woman who knew little of the potent cancer growing within her) gave thousands of researchers a new tool for curing disease. These robust HeLa cells were just what experts needed to test new ideas and commercialize new drugs, creating a multi-billion-dollar industry.

Gladwell's book explains "how little things can make a big difference" (his subtitle). Fixing a broken window can reduce crime. Moving the location of a word in a Sesame Street skit can dramatically increase attentiveness. Getting the right people to wear your shoes can snowball into a resurgence of status and sales.

Significant breakthroughs often simmer for years until one quiet change suddenly opens the floodgates, removing just the right barrier to let new ideas flow freely. As The Economist explains it, innovative technologies transform businesses, but "companies will take time to learn how to use them, so it will probably be many decades before their full impact is felt." We've already spent the last decade refining the techniques and proving how effective mosaic testing can be. Now is the time to feel the full impact. In-market testing may not save lives, but we are now at that tipping point where accelerated learning is at hand.

Retail Testing: Challenges and Opportunities

In the retail environment, scientific discipline tends to fade away in the progression from the research laboratory to the front lines of the marketplace. Perhaps for good reason: markets are dynamic, unstable, and with so much variation that it's nearly impossible to connect actions with outcomes. But...

The opportunity is immense. Once products hit the marketplace, once advertising and in-store programs are launched, even minor changes can shift sales by millions of dollars. Especially on the front lines of the marketplace, little things can make a big difference. The cost is great, but the opportunity is even greater.

Testing is the best way to overcome the market cacophony, so you can listen to your customers as they speak with their wallets. How? By finding a stable moment within the ever-changing market, managing the marketing-mix to answer the questions you're asking, testing many variables in parallel, and using real-world data to drive in-market decisions.

On the front lines, speed and efficiency are key: jump in, act fast, learn all you can, and get out while results are current and costs are minimal. And now – finally, after 90 years of research – a full toolbox of academic testing techniques is available for over-worked marketers. Now you can test more variables, more quickly, with greater efficiency and more profitable results.

The winding path of science

New technologies can take years to reach the marketplace. After the light bulb was first developed, it took 50 years for the first patent and another 50 years until commercial production. LCDs were first developed in the 1960s, but it took 40 years for sales of flat-screen TVs to overtake the old cathode-ray-tube technology. Scientific testing has proceeded even more slowly, beginning with agricultural experimentation in the late 1800s. Many popular multivariable test designs were first published in academic journals in the 1930s-1950s. Papers explaining the statistics of retail testing were first published in the 1970s. Early articles about multivariable testing in direct marketing, Internet, and retail were first published in the popular marketing press in the late 1990s (including some of my early work).

One reason scientific testing has taken so long to reach the "front lines" is that marketers simply never sought out techniques they didn't know existed (after all, we're taught that the Scientific Method is the only way to test). Even today, there's much misunderstanding about the science behind the wealth of testing techniques. Scientific "mosaic" testing has now gained some traction in direct marketing and CRM channels (and quiet success among a few retail leaders), but has yet to reach broad acceptance among the largest firms. Perhaps surprisingly, those retail and consumer packaged goods (CPG) firms who invest the most in marketing are least likely to be using the most efficient testing techniques.

Testing remains the only way to prove what works in the marketplace. Other analytical techniques are still valuable, but once you're ready to prove what works in the real world, testing is the only way to go.

Now's the time

Now that we've spent the last decade proving what scientific testing can achieve, we're ready for the next wave: fast, focused, flexible retail testing. The convergence of advanced techniques, available data, computing power, and skill navigating the dynamic marketplace now offers the power and efficiency to test more, more quickly, and more profitably.