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Rue21 Adopts Consumer-Driven Analytics To Shorten Supply Chain, Boost Margins

Rue21 Adopts Consumer-Driven Analytics To Shorten Supply Chain, Boost Margins

Rue21 is powering a turnaround effort by incorporating consumer-driven predictive analytics into its design, buying, planning and pricing decisions through a partnership with First Insight. The retailer has also adopted a methodology called Action Learning to help teams rapidly adopt the solution across the entire company.

The retailer is using the First Insight solution to help evaluate a larger number of products and reflect direct consumer input in buying decisions. First Insight provides retailers with consumer-driven predictive analytics by gathering real-time preference, pricing and sentiment data on potential product offerings through social media platforms. The information is then processed through the solution provider’s predictive analytics and machine learning models to determine which products present the greatest opportunities.

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Additionally, the tools enabled rue21 to cut the traditional product testing period dramatically, from six to nine months down to two days. As a result, the retailer shortened its supply chain to 90 to 120 days, down from 270 to 300 days. The retailer started seeing ROI during back-to-school sales, and rue21 is currently trending towards an improvement of several percentage points in both sales and gross margins.

“Organizational adoption of the First Insight technology and its incorporation into our business processes has been instrumental in improving our business performance,” said Mark Chrystal, Chief Analytics Officer at rue21 in a statement. “We have already seen margin improvements of up to 600 basis points [equal to 6%] on the products we have processed through the First Insight platform.”

Action Learning, an experience-based and action-oriented approach to organizational learning methodology, helped rue21 rapidly adopt First Insight’s tools after partnering with the solution provider in March 2018. The strategy was adopted by rue21 to foster cooperation across its executive, merchandising and planning and inventory teams, encouraging discussions about what results meant and the decisions that teams could make from them.

A strong turnaround plan is important for rue21, which filed for bankruptcy in May 2017 after shuttering 400 stores in April of that year. The retailer emerged from bankruptcy in September 2017, and named Laurie Van Brunt CEO in June 2018 to spearhead its recovery.

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