Creative Capital Index

Inventory projection, competitive analysis, trendspotting — retailers analyze reams of data to gain a clearer view of what’s just beyond the bend. This tendency, however, has not protected margins or yielded competitive advantage. The explanations for this are numerous, but most overlook a fundamental danger: narrowcasting, thanks to upholding a solely inside-out approach to data collection and analysis.

Paradoxically, retailers are drowning in their data, with not enough hands to filter through it and derive the kind of insights that fuel uncommon growth. A new approach that can scale and query billions of external data points, and analyze them efficiently and accurately, is long overdue. Fortunately, the world’s boldest, most innovative brands now wield the very thing that has eluded them: an AI-powered statistical model that reflects the creative growth potential within their business — in real time. They wield the Creative Capital Index.

A New Model to Measure — and Accelerate — Growth

For decades, retail has been thinking about creativity wrong. Forget the story of the big idea. Creativity in retail derives from innovation and invention, not pure execution. Creative companies hold higher market valuations through intangible assets like brand, reputation, and intellectual property, which account for 90% percent of the S&P 500’s total valuation.* Having the ability to measure the creative growth potential within your business opens a door to create targeted tactics that supercharge growth.

At the outset of designing the Creative Capital Index (CCI), we defined “growth” to include calculations based on share price and share of search — a proxy for market share — for each industry. Focusing on external data to provide an outside-in view, we analyzed billions of diverse data points from more than two years to understand their relationship and impact on growth. Through that analysis, we developed our proprietary CCI algorithm.

At its core, CCI helps businesses measure, track and increase their organizational creativity. To calculate a score, we analyze a company through three applications of organizational creativity: Brand, Offerings and Experiences. For the purposes of CCI, we get at the meat of these broad concepts by addressing the following questions in our analysis:

• Brand: What is the relative heat of the brand, and the resonance of its value proposition and brand purpose?

• Offerings: Are the brand’s products and services relevant, high-quality and aligned to what customers want?

• Experiences: What is the quality of the total experience, inclusive of all touch points and expressions?

CCI at a Glance: Footwear

Designer Shoe Warehouse, more commonly known at its 500-plus stores across 44 U.S. states as DSW, presents a fascinating study in creative capital contrasts. DSW’s total CCI score does not deviate significantly in comparison to its biggest rivals, Shoe Carnival and Famous Footwear (fig. 1). But DSW struggles with a different challenge: fantastic Experiences factors but low Brand scores.

fig. 1

In the footwear sub-sector of Retail, Experiences plays a remarkably important role in consumers’ perceptions, preferences and behaviors. Factors that inform an Experiences score may be the returns and exchanges process, the physical layout of stores, the e-commerce side of the business, and many others. Such inputs may help drive DSW’s strong Experiences score — and dampen those of its competitors (fig. 2).

fig. 2

Conversely, Shoe Carnival and Famous Footwear are walking all over DSW where Brand application is concerned (fig. 3). Again, numerous forces may be weighing on DSW’s Brand score, from a lack of brand awareness to reputational factors, all of which would come into sharper relief through collaboration with the brand.

fig. 3

Regardless of sector or vertical, CCI acts as an AI-powered sparring partner, amplifying the strengths and exposing the weaknesses of a business in real time. Armed with the data-based insights CCI is precisely engineered to elevate, the brand can regroup, tone up and come out swinging.

*Ocean Tomo, “Intangible Asset Market Value Study” (2020)