Retail valuation expert Greg Petro stood before the board of a major retail company in New York City and explained the future.
A future where every consumer would have unlimited information in his or her hand. A future where retailers could know with much greater certainty what merchandise those consumers would like and purchase. A future where retailers could reduce losses, cut waste, use their floor space more effectively and increase profits.
And what did that board, that collection of experts in retail, say to Petro in that conference room, circa 2008?
“We can’t see it. Thanks, but no thanks.”
If only their minds had been willing to embrace the concept at that time, that retailer would have gained an incredible leg up on its competition for nearly a decade. That’s what First Insight, Petro’s company, provides to its customers. Marketing itself as “the world’s leading platform for creating differentiated products” and the solution provider that helps retailers “get to market faster with the right products for the right customers at the right price,” First Insight uses proprietary algorithms that open a unique window into the dynamic of human behavior as it relates to purchasing decisions.
“We don’t design products, but we identify which will succeed and which ones won’t,” Petro explained. “Our system works from the original thesis that consumers want to leverage information. Other systems get it right about 30 to 50 percent of the time – our technology usually doubles that, an enormous difference for retailers.
“By helping these companies determine which products they should make more of, it reduces waste, drives value and increases their sales and profits,” Petro said.
“We’re not changing anyone’s business model, but we’re pushing information to get more accurate predictions about what will sell,” he continued. “The result becomes shorter decision cycles to drive value to a company. We help them listen and anticipate what their customers want.”
Early adopters included David’s Bridal, Helzberg Diamonds and Lilly Pulitzer. First Insight’s client list today includes such mega-brands as Under Armour, Chico’s FAS, Hard Rock Café, Pier 1 Imports and more.
“By helping these companies determine which products they should make more of, it reduces waste, drives value and increases their sales and profits,” Petro said. “It also helps with sustainability. If more products are purchased by consumers, then the company doesn’t need to ship and dispose of unsold merchandise. Our system also helps with reducing the number of floor sets needed per year in stores according to our customers.”
Petro admits that First Insight may have been ahead of its time. Ten years ago, the iPhone had just come out, Facebook had not escaped its Harvard roots, social media was still in its infancy, gaming was for kids only and artificial intelligence remained a mystery. Things obviously have progressed since then, both here and globally.
“Everyone at first thought the First Insight concept was a U.S. issue only, regarding how people buy products, but it’s a commonality around the world,” he noted. “We’re now in 30 countries, with 14 languages.”
So with all of this worldwide success, why has Petro kept his dynamic innovation based in an office park in Warrendale, Pa.?
“When we were raising money in the early years, everyone said I should move to Silicon Valley,” he recalled. “Inc. magazine asked why we remained in Pittsburgh – and it’s because we have a talent pool just as good as Silicon Valley, but we can retain it here much easier, so we made the commitment to stay. Pittsburgh is different, in a good way. There’s not a mercenary mentality here, like what exists in parts of Silicon Valley. Investors are liking this region more. We have a great Midwestern culture, lots of available talent, strong regional loyalty, and real stability.”