New Republique CEO Nima Yassini details why retailers should adopt a culture of experimentation.
What do Amazon, Google and Facebook have in common? They are all founded on a culture of experimentation.
Their commitment to test, learn and refine, rather than delayed perfection is the key reason they’ve been able to build such large followings over the years.
In the recent 2020 Pulse report studying the top brands and their experimentation cultures - showed that with the exception of some new world retailers, the industry as a whole is far slower to embrace experimentation, unlike the Telco and banking industries who are some of the most advanced when it comes to making decisions based on data gathered from thousands of small tests on websites and customer interactions.
"Since the industrial revolution, organisations are focused on one thing – output – but most output doesn’t actually deliver revenue," said Nima Yassini, CEO of New Republique, a digital consultancy specialising in helping organisations shift to a culture of experimentation.
"Our mission is to bring the ethos of experimentation that digital-native companies like Amazon and Facebook have to corporate Australia."
‘Testing in a teacup’
If retailers would transform their business, if they took the time to run experiments before making decisions, to see if a course of action would solve the problem.
Take the running shoes brand Brooks. The company was able to reduce its return rate by 80 per cent after identifying that a significant number of people were buying two pairs of shoes in different sizes because they didn’t know which size they were.
"By running an experiment where every time a customer put two sizes of the same pair of shoes in their cart a chat window would open up asking if they needed help finding their size. They saved millions of dollars in returns from that one little experiment," Yassini said.
Most get into experimentation once they realise the immediate sales and cost cutting impact it can have on their business. But there’s a difference between hiring a small team to run experiments on an ad hoc basis – what Yassini calls ‘testing in a teacup’ – and making experimentation part of a company’s culture and overarching strategy.
Learning from the best
One of the challenges businesses face in building a culture of experimentation is that many of them don’t have anything to compare or emulate their programs on.
This lack of insight is what inspired New Republique to launch The Pulse Report: The experimentation maturity index 2020, which it plans to turn into an annual publication.
The Pulse Report aims to show businesses what ‘great’ looks like when it comes to experimentation. The report reveals the five stages of experimentation maturity and the four pillars that underpin a culture of experimentation.
"In a retail space that is so busy and competitive, especially online, I want to show there’s a better way to add value than always being on sale or giving away free shipping to buy loyalty," Yassini said. "Sometimes just making the experience easier will win you customers."
Click here to download The Pulse Report: The experimentation maturity index 2020.