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Reinventing Retail with Omnichannel AnalyticsAn overview of the market and the issues it facesLori J. Schafer
Understanding the New ConsumerPersonal consumption is up, but sometypes of retail sales remain sluggish“Conspicuous consumption” to“conscious consumption”Shoppers spending more onexperiences, less on productsExponential technology – fickleloyalties; opportunity and variety atthe consumers’ fingertipsOmnichannel exposure – difficultto retain customers & staffRetailers mustface into extreme& variablecompetition tostay relevant &buoyantA major shift ishappening in theway people shopand what theywant to buy
PRODUCT DISCOVERYProductDiscovery
Competitive Landscape Strong Web presence now the price of entryinto retail Omni-Channel capabilities are an expectation “One-stop” shops like Amazon and Walmartwill continue to dominate Traditional malls will become a thing of thepast Pop-up shops will emerge as an appealingalternative Fast fashion and discount retailers willcontinue to build their competitive presence
Amazon buys Whole Foods Alibaba buys supermarketchain and a logistic company Walmart looks at buyingFlipkart , the largest Indianonline retailer Tesco buys wholesalerBookers that suppliesconvenience stores to extendits reach Walmart spins off portion ofUK Asda to Sainsbury Casino and Auchan enter apurchasing alliance Carrefour and System Uare entering a purchasingalliance Nestle and Unilever arebeing squeezed andestimates are that 10%reduction in prices willfollow Amazon launches Wag – adog food private label toattack Walmart and tokeep online sales to primemembersCom pany Confi denti al – For I nter nal Use Onl yCopyr i ght SAS I nsti tute I nc . Al l r i ghts reser ved.
“We need to be more agile inresponding to our customers needsonline and in-store”David Jaffe, CEO of Ascena Retail Group“We need to enhance our in-storeexperience, offering state-of-the art digital tools”Treasurer,Apparel & Accessories Retailer“Improving technology to grow thelinkage between the internet & thestore to enhance the customerexperience is our top goal”Jerry Storch, CEO, Hudson’s BayPriorities of the Retail CEO
1A flooded & volatile market1009080706050403020100Used to be 80 – 90Billion Euros!Major retailer count945 BillionEuros totalturnover ainsburyKingfisherAmazonAsda(Walmart)MercadonaEl Corte InglesInditexIKEAH&MICA ABMigrosExpert InternationalEuronicsAhold DelhaizeBILLION EUROTop 30 major retail brands – Billion EuroTurnover by HQ LocationGermanyFranceUKUSASpainSweden Switz. Neth.Retailers need to face into the most extreme & variable competition to stay buoyant & relevantSource for retailer count: Retail-index.comCom pany Confi denti al – For I nter nal Use Onl yCopyr i ght SAS I nsti tute I nc . Al l r i ghts reser ved.
Unravelling the market – by country, by sectorCar Parts & AccessoriesPetrolCOUNT OF MAJOR RETAILERS16015% ofcountrieshave 40% ofthe retailercount – 51%have 80%140120Hugeopportunityfor growthfor retailersand theirsuppliers100Telecom*Pet CareOpticalJewellery & Watches80Books & Magazines60Toys & GamesSport & Leisure40Baby Ware20Personal Care0Footwear & LeatherHome WareFurniture & DecorationDIY & GardeningConsumer ElectronicsSource for retailer count: Retail-index.comFoodCom pany Confi denti al – For I nter nal Use Onl yCopyr i ght SAS I nsti tute I nc . Al l r i ghts reser ved.Fashion & Clothing
NEW BIG PLAYERS – GROCERY LANDSCAPE
2Fickle loyaltiesYourbusinessHighExpectations Opportunity and variety atfinger tips – customers define‘good’ by experiences Transient mind set andbehaviours ‘Prove it’ – visible positivebehaviours improve perception Once the ‘slide’ downhillstarts, it’s an uphill battle toattract people backCompetitionOmnichannel exposure means retailers need to work harder than ever to retain customers & staffCom pany Confi denti al – For I nter nal Use Onl yCopyr i ght SAS I nsti tute I nc . Al l r i ghts reser ved.
3Optimising the cost to operateCustomer volume &exposure 1.000.000Productscross manycurrenciesthrough thesupply chain;impactingprofit in manywaysAssortmentmanagement 900.000 800.000Price accuracySupplierrelationships 700.000 600.000Creative revenuegeneration 500.000 400.000Waste controls& losspreventionProduct quality 300.000 200.000Smart control ofoperational costs 100.000Actual marginUnknown LossKnown LossStoreOfficeLogisticsCommercial MarginReturnsOverchargesUnderchargesOther IncomeFront MarginFundingMargin @ POSCost of Goods SoldRetail Sales 0 Truly understanding thecost to serve customers Identifying the genuineopportunities to improveand increase profit Acknowledging the impactof making changes to theoperationKnowing the ‘levers’ that enable you to adapt dynamicallyNote: figures used are illustrativeCom pany Confi denti al – For I nter nal Use Onl yCopyr i ght SAS I nsti tute I nc . Al l r i ghts reser ved.
?How are Retailers responding?EmotionalconnectionsAccelerate ingrowingmarketsSimplifyingoperationsCom pany Confi denti al – For I nter nal Use Onl yCopyr i ght SAS I nsti tute I nc . Al l r i ghts reser ved.‘Big Data’strategies
The Evolution of Advanced Analytics and RetailA relationship where the possibilities are truly endless
Assessing where to prioritiseImpact potential and data richness assessmentFor each industry group, we list the top ten use cases along with the impact score and data richness score. Impact scoring ranges from 0 to3, while data richness ranges from 0 to 2 based on an average across breadth, frequency, and variety.Source: McKinsey Global Institute analysis – The Age of Analytics: Competing in a Data Driven World
The reality of the end to end retail processA ‘neural network’ of complex processes & (online)SellFulfillFulfill(online)SellFulfillSo how do we expect to gain clarity & implement changes that make a difference?
How can analytics help?Customer volume &exposure 1.000.000Assortmentmanagement 900.000 800.000Supplierrelationships 700.000 600.000Investment withthe rightstrategicpartner(s) is key– both internal& externalWorking with solid scalabledata infrastructuresWaste controls& losspreventionUnderstanding where theopportunities lie & whereanalytics can solve themCreative revenuegeneration 500.000Price accuracy 400.000 300.000Product quality 200.000Smart control ofoperational costs 100.000Actual marginUnknown LossKnown LossStoreOfficeLogisticsCommercial MarginReturnsOverchargesUnderchargesOther IncomeFront MarginFundingMargin @ POSCost of Goods SoldRetail Sales 0Open source & ‘stackablemodules’How analytics ‘behave’with operational systemsHow to implementadvanced analytics & AIwhere it is most usefulAnalytics will bring clarity & opportunity we haven’t seen in retail beforeNote: figures used are illustrativeCom pany Confi denti al – For I nter nal Use Onl yCopyr i ght SAS I nsti tute I nc . Al l r i ghts reser ved.
The challengeKeep customers happy& generate loyalty“How hardcan wesqueeze theoperationeach yearwithout itbreaking?”Improve Profit & LossGrow the business18
Omnichannel Analytics:incorporate big data consisting ofcustomer, demand, location andproduct information, cross-channel.Provide retailers with predictiveinsights into customer journeypreferences, regardless of thechannels customers shop.Retailers use these insights toimprove effectiveness of marketing,assortment and merchandisingdecisions, distribution, andoperations across all channels ofbusiness, resulting in higherprofitability, lower inventory costs andincreased customer satisfaction.
Regular, Promotional,Markdown, Price Optimization Analytics Platform . Merchandise AnalyticsEntire Merchandise Process. Size and Pack Optimization Loss Prevention . Forecasting Pre-seasonand In season planning Customer EngagementOmnichannel . Replenishment & InventoryOptimization
5 ways analytics is changing retail5 ways analytics is changing retailFully integratedPlatform &Applicationsreal time, event drivendata lakes connectingthe dots across theretail enterprise.AmbientintelligenceAccessibilityData constantlyworking & adapting toshape operations,decision making &what we offer ourcustomers.Analysis will no longerbe the domain of datascientists; user friendlyanalytics will enablethe workforce likenever before.Visualisation,Voice, Text,Audibleinteraction with dataand predictive analyticswill replace traditionalreporting and decisionmaking.MobilityOperators will not betied to their desks orwaiting for reports toarrive to makedecisions – analyticswill be fully mobile &instantly reactive.
How we make the differenceMarket leadingpedigree40 years continuousrevenue growth 3.2bn turnover26% revenuereinvestment vs. 12.5%industry average94 of the top 100 FortuneGlobal 500 use SAS83,000 installed sites4% staff natural attrition#15 Forbes top employersStrongpartnershipsRecognisedindustry leaderCross industryknowledge baseScalableIntegrationLong lasting, reciprocalrelationships where trust& understanding are keyto deliver the best resultsfor your business.Gartner: Visionary inmagic quadrantForrester: Leader inForrester Wave foranalytics and machinelearning solutionsWe harvest and share theknowledge we gain fromour cross industrypartners so we can applysynergies across differentmarkets, industries andlocations.We can deliver a suite ofdata and business processsolutions that are right foryour requirements andstage of analyticalevolution.We can combine businessIP with our owntechnology to shapedefinitive results for you.2016: more than 30reports ranked SAS asleader or leaderequivalent
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for your business. Recognised industry leader Gartner: Visionary in magic quadrant Forrester: Leader in Forrester Wave for analytics and machine learning solutions 2016: more than 30 reports ranked SAS as leader or leader equivalent Cross industry knowledge base We harvest and share the knowledge we gain from our cross industry partners so we .
