In Conversation With: Michaela Wessels from Style Arcade. Tom sits down with Style Arcade Co-Founder & CEO - Michaela Wessels to learn more about the platform and its benefits, the tension between innovative design and commercial viability, the recently released consultation programme for growing brands & much more.
Style Arcade, launched in 2018, is a software suite that offers analytics and assortment planning to retailers, powering smarter product decisions for fashion brands and retailers. The software is the secret sauce behind many leading global brands including Christopher Esber, The Iconic, Venroy, & Princess Polly, with the trust of over 3,000 users.
We have utilised Style Arcade with several clients over the past two years and have seen first-hand how the tool can help brands grow revenue and profitability - and also empower smarter marketing decisions for E-Commerce brands. Tom sits down with Style Arcade Co-Founder & CEO - Michaela Wessels to learn more about the platform, the biggest opportunities for brands with smarter product data, the tension between innovative design and commercial viability, the recently released consultation programme for growing brands, and more.
Tell me about Style Arcade. How did it come about, what problem does it solve for growing brands?
In today’s world of ecommerce enablement, it's never been easier to build an online retail business. But, there's a problem. It's easy to launch, but hard to GROW! Why?
To keep scaling, brands need to answer retail’s toughest question which is, How much to buy? As a Merchandise Director I was buried in a sea of data, multiple systems and only spreadsheets to rely on. This was true in every brand or retailer I worked in, even the largest ones. Doing my job well seemed impossible without good technology. What I needed was a single source of product data from which to make all my product decisions. Especially those critical buying and planning decisions about exactly how much to buy and in which sizes. I knew that if I could get this right it would unlock growth for the brands.
Style Arcade was first launched into The Iconic and it became my secret weapon as well as creating an army of avid fans in the buying department with over 300 users at the Iconic alone. We now have over 120 brands and retailers, across 7 countries with 6,000+ global users which still blows my mind but it’s clear we delivered something quite unique to the market.
Pilot and Style Arcade have now worked closely together across a number of clients. We have seen first-hand how having retail data easily available for all facets of a business can help a brand increase revenue and profit. What do you see as the biggest opportunity for brands to use the platform?
- Single source of truth on product performance.
- A visual and intuitive system that can be used by the whole team.
- AI and automation allows them to delete all the manual spreadsheets and get back to trading.
How does the Style Arcade Platform work to help identify top-performing styles and opportunities from a product perspective? How can brands leverage that data to inform wider business and marketing decisions?
Style Arcade uses merchandise planning principles to flag product product performance and provide recommendations. It measures product velocity, predicts sellout week, suggests when to discount, when to re-order AND quantifies exactly how much to order in which sizes. Here are some use cases:
Marketing:
- Report on campaign performance
- Know exactly which products to market to drive conversion & revenue
- Track which products are delivering when and in what quantities
Ecommerce:
- Create high converting product feeds to be used across Google, Meta and Klaviyo
- Create site merchandise plans based on product performance metrics
- Automatically tag products in Shopify for fast creation of landing pages etc
Buying:
- Perfect their order and size quantities
- Automate all of their reporting and product attribution
- Visualise their range by region, country channel and store
A continuous challenge for our clients in the growth phase is dealing with an often correlating increase in the volume of returns, particularly around sizing. How can brands leverage Style Arcade to improve this? And how can brands ensure their return process actually stimulates greater customer loyalty?
Style Arcade integrates with your returns platform to give you deep insights into return rates and return reasons by product, by size, by category, by supplier, price point, fabrication and more.
Understanding exactly which levers you can pull to organically lower your return rate without constraining your sales or profit is key. Speed to identifying returns problems and correcting them prevents a poor customer experience and builds loyalty and customer happiness.
It’s all about making your data work harder for you through key integrations, which is why we integrate with platforms like Loop and Refundid to ensure these return reasons and metrics are visible across all touchpoints in your collection. This makes post-season analysis a breeze, because when you’re able to add the visual element to returns data you can easily spot patterns in the range and take action in the next season.
Typically, analytics and planning tools are ugly - making it difficult for more creative and design led people to access and interpret data that can help with design. Was the look of the platform intentional?
Absolutely. Humans are visual creatures and process imagery 60,000x faster than text or numbers. Gone are the days of looking at SKU #, it doesn’t tell you anything. The retail customer also buys products based on the look of it first and foremost so if we’re unable to draw the link between data and the visual elements of the product then we’re not seeing our range from the customers eyes. The visual and intuitive nature of Style Arcade’s interface is the reason that it’s been able to create super fans within the buying, planning, marketing and ecommerce departments.
A lot of our clients face a tension between celebrating creative & innovative design (both in terms of product and campaign outputs) with the commercial viability of those outputs. How can Style Arcade help facilitate a more cohesive approach that balances both elements needed for brand and revenue growth?
There is a saying in retail that “she comes for the hot pink but she stays for the black”. It's so true that most customers invest in the most commercial and core products within a brands range but they were drawn to the site with the aspirational products. It's for this exact reason that a perfect balance is needed between an assortments width (number of options) vs depth (units per option).
Using Style Arcade's Buy calculator will give you a recommended order quantity for ANY product or combination of products in your range. Fun feature: if you’re ranging a brand new product simply use Style Arcade’s Search Similar feature to see all similar products through all of your history and also provide an ideal recommended order quantity by size. Range planning allows you to visually and financially balance your range for width and depth in your “black” (core/commercial products) vs “hot pink” (aspirational/campaign products) styles.
"She comes for the hot pink but she stays for the black"
When we start working with a new client, we often find that they have subtly been on sale or offered mid-season discounts far more regularly than they think, hampering margins and full price sell-through. How does Style Arcade support brands to not do this?
Discounting masks poor performing products as good performers. In Style Arcade it's really easy to see if sales performance has been fuelled by discounting and which products would not have performed the way they did without the discount boosts. Knowing which products are actually driving full priced revenue allows you to invest in the right places to achieve a better and better profit outcome. Style Arcade will easily split your products into products that need discounts and those that don't, thus ensuring you never give away unnecessary profit.
We currently use a range of product feed tools to prioritise top performing products across our Digital Campaigns - either in terms of margin, stock volume, or region. Can you talk to us about how the product tagging feature within Style Arcade? How are brands utilising this to improve ROI on digital marketing?
We’re finding that one of the biggest challenges amongst brands is the disconnect between advertising and inventory. There is a considerable amount of ad spend being wasted simply because brands aren’t able to utilise their own product data to optimize feeds and are relying too heavily on in-platform algorithms in Google and Meta. With Style Arcade’s dynamic tagging functionality, brands are able to automate and ensure only HIGH CONVERSION product feeds across their shopping channels. Curating high converting product feeds involves filtering for only those products with: high velocity, high size availability, good profitability, low return rate, high reviews count, good reviews score and healthy stock levels to last through the conversion window. These products lead to higher conversions and far higher ROAS.
Style Arcade predominantly focuses on Medium-sized businesses. What can small businesses do now, before engaging Style Arcade to get better with retail analytics and planning?
Style Arcade has just released the Style Arcade for Ecommerce app. This gives growing brands access to the most loved parts of the platform, helping them level up, automate and grow. At Style Arcade we believe in democratising merchandise buying and planning smarts and making these available to brands of all sizes. Style Arcade also offers merchandise consulting to brands who want to power up and dig deep into their data to understand their growth levers. This is available to brands both large and small.
What are 3 things brands should focus on to improve their profit margins and stop over-production?
If you consider that fashion brands lose 23% in profit every month through bad buying decisions, then simply by buying right, sizing right and pricing right, brands have everything they need to take leaps towards growth and reaching their true sales potential. The biggest issue in overproduction is the excess ordering in sizes which is absolutely solved by technology. Use your data to your advantage.
What are you most looking forward to in the coming months?
- Style Arcade for Ecommerce - giving these smarts to every growing brand
- More integrations with everyone's favourite apps
- More AI
- What this space for a giant brand announcement coming
To learn more about Style Arcade and how you could utilise the platform to support your brands growth visit www.stylearcade.com or contact us at hello@wearepilot.co.nz