How Vera Bradley Profits From Big Data

Leveraging big data for pricing has paid dividends for Vera Bradley. Steever cited an example from Vera Bradley's baby line, specifically a dress and bloomer set, that was originally priced at $49. After analyzing the data as well as the feedback it got from customers, the retailer changed the price of the product to $48. The move resulted in a 6 percent increase in sales in the indirect channel and a 2 percent increase in sales in the brand's direct channel.

Pattern Testing
If you're familiar with Vera Bradley, you know that patterns are a big part of its business. In fact, Steever said they're the lifeblood of the business. So it's not surprising that the company would use extensive testing — and big data insights — to help it determine what its most popular patterns will be. While the pattern testing that's in place now is rather new — previously Vera Bradley relied solely on the opinions of its designers and merchants to determine which patterns would be sold — it's been quite effective at predicting the "winning" patterns.

Vera Bradley works with market research company Ipsos to measure consumer sentiment on pattern designs before deciding which to put into the marketplace. The goal of the testing is to find the patterns that stand out and resonate with consumers, Steever said. Biometrics such as heart rate and sweat output are measured for consumers who are exposed to the test patterns to get their subconscious feelings. Then a survey is used to get the explicit opinions of these consumers on the test patterns. Finally, a select group of the survey respondents are chosen for a focus group and consumer panel.

Vera Bradley typically starts a season with 16 to 18 pattern designs, Steever said. After analyzing the data post-testing, that number is reduced to three to four. We have to make our bets earlier in the process because of the long lead times with our products, Steever said. To verify the effectiveness of its pattern testing process, Vera Bradley back tested older products on which it had sales data to determine if it's a good predictor of future success. It was.