While the retail market has been through sea changes before, it may never have been faced with quite so many threats at once. Changing tastes of Millennials, the emergence of online retail, and looming economic factors seem to indicate more uncertainty. When it comes to changes in retail strategy – weather it’s how to update a brand or how to present a product – there is a need to move away from a “gut instinct” approach toward more scientific models that help test ideas for success prior to implementation.

Yes, you need to take a scientific approach

A recent piece in the Harvard Business Review titled, The Discipline of Business Experimentation will help you understand how important it is to conduct business testing the right way, and will also provide you with a framework for how to approach your testing so that it will deliver actionable results.

Authored by Stefan Thomke, a William Barclay Harding Professor of Business Administration at Harvard Business School, and Jim Manzi, the founder and chairman of Applied Predictive Technologies, this article urges businesses to conduct rigorous testing, pointing to the recent failure of policies at J.C. Penny. If you happened to miss it, J.C. Penny hired a new CEO who quickly changed long-standing policies such as coupons and clearance items, policies beloved by customers. The changes reaped dreadful results for the retailer, and Johnson lost his job.

The authors of the Harvard Paper present a very rigorous, science-based approach and urge managers to ask themselves big questions about how to conduct the experiment; questions that a scientist might pose prior to conducting testing. After all, experimenting is expensive for retailers, so as you embark on a new venture, argues the Harvard authors, you should be sure that the experiment has a clear purpose, that all the stakeholders involved agree to abide by the results of the experiment, and that everyone involved agrees that the experiment is realistic.

The article also provides excellent guidance on how to make sure results are measurable and reliable. Since many of the questions a large retailer might ask will require big data, it’s important to select the right types of samples that will indicate the most honest and clear results. And, argue the authors, even when you can’t follow protocols rigorous enough for medical research, you should still work hard to make sure the test is set up properly.

If you’re considering embarking on a new venture, or are about to hire a strategy firm to help you test out a new marketing approach, take the time to read this article, and use it to help you form the right questions to ask your research team, and to make sure they’re delivering the best research approach possible.

Thinking about a new approach?

Over the next few years as retail changes inevitably give way to new approaches fueled by online opportunities, every retailer is going to have to reconsider how they do things – maybe a lot of things. These changes won’t always be huge, but they will be important to helping to maintain a leading pace in the market. If you’re thinking of a different approach to strategy, another fantastic resource to check out is article from McKinsey Quarterly, Have you tested your strategy lately?

McKinsey has developed an approach to updating strategy that focuses on how businesses think about strategy. “Ultimately, strategy is a way of thinking, not a procedural exercise or set of frameworks,” notes the article, adding, “to stimulate that thinking and the dialogue that goes along with it, we developed a set of tests aimed at helping executives assess the strength of their strategies.”

McKinsey shares their ten test questions, which turn out to be a great way to start a conversation with your team about new strategies. Whether you want to brainstorm a topic during a weekly meeting, or an approach a new idea in a day-long, off-site retreat, these questions can help you develop a great structure for your discussion, and challenge your team to come up with real answers to difficult questions like:

Will your strategy beat the market?

It will also force your team to come up with data – by asking questions like:

Is your strategy granular about where to compete?

Finally, it will ask tough questions that the whole team should answer honestly, such as:

Is there conviction to act on your strategy?

Honing your approach to product strategy

Your team has to make judgements every day about how effective one product will be over another, or how much traction you can get from displays and other promotions. In order to test and quantify how one approach exceeds another, many retailers turn to consulting agencies for help. But, as the Harvard and McKinsey examples show, it’s really important to know how to ask the right questions of your research team in order to make sure you’re getting actionable results – and not the results your firm thinks you want to hear.

Marketing Management Analytics (MMA) is a top research firm, rated by Forrester as a Leader in the Marketing Mix Modelling Wave in 2013. Take a look at the firm’s approach to market testing and consider how your market testing compares. One insight that MMA makes is the importance of using testing to minimize risk and gaining competitive advantage in the process. The firm’s approach is to identify an innovation, test it, and then optimize the results.

All three expert organizations stress the value of testing for businesses along with the need to implement truly scientific methodology. If you’re working on testing, refer to these articles for inspiration, concrete ideas, and references to truly interesting case studies that will help you better understand how to frame your next test – and also make you sound like the smartest team member in the room.