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“Quote or callout goes here and here. Quote or callout
goes here and here. Quote or callout goes here and here.”
- Frank Nauta, SAS



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               quamendit quis exerrov idebiscide vendandia debitatis
               aperion sequia consequ ossequiaepta ipsa soluptatur accus
               sequam qui te voloremquo qui ratur?




                                                                           ►► 1
“Quote or callout goes here and here. Quote or callout
Table of Contents
goes here and here. Quote or callout goes here and here.”
- Frank Nauta, SAS

     High Performance Retail: The Art of the Possible_______________________________________________________ 	 3
          In-Database Analytics _________________________________________________________________________ 	 4
          In-Memory Analytics _________________________________________________________________________ 	 4

     I. Addressing Market Opportunities with High Performance Retailing______________________________________ 	 6
          High Performance Revenue Optimization: Price, Promotion and Markdown_ _____________________________ 	 6
          High Performance Planning: Assortments and Merchandising_ ________________________________________ 	 8
                                                                  _
          High Performance Analytics: Developing 1:1 Interactions _____________________________________________ 	 10

     II. The Benefits of High Performance Retailing_________________________________________________________ 	 11
         1. Ask and Answer More Innovative Questions______________________________________________________ 	 12
         2. Increase Speed of Analysis _ __________________________________________________________________ 	 12
                                       _
         3. IT and Business Can Work More Strategically _____________________________________________________ 	 13
         4. Give Real-Time Decision-Making to Retailers Across the Supply Chain _ ________________________________ 	 13
         5. Start Small and Scale Up______________________________________________________________________ 	 13
         6. Tame Big Data______________________________________________________________________________ 	 13
         7. Encourage Better Retailer-CPG Collaboration_ ____________________________________________________ 	 14
         8. Avoid Offer Spam_ __________________________________________________________________________ 	 14

     III. Getting Started with High Performance Retailing____________________________________________________ 	 14
        Eliminating Data Silos___________________________________________________________________________ 	 16

     Conclusion_ _____________________________________________________________________________________ 	 17
                                                                                                                          ►►   2
“Impulse buying is not really an impulse any longer. Today’s
shoppers are making better-informed buying decisions.”
- Frank Nauta, SAS




               High Performance Retail:                                           1.	 Mobilized consumers are accessing up-
                                                                                  	 to-the-minute information in real time.
               The Art of the Possible
                                                                                  2. 	 Products are advancing rapidly, creating the
                                         A perfect storm of factors are
                                                                                  	 need for constant merchandising changes.
                                         in constant motion, forming a
                                         tidal wave effect on the retail          3. 	 Pricing options are multiplying at an
                                         industry. In order to stay on top of     	 unprecedented rate.
                                         the changes, merchants need to           4. 	 Competitive pressures are compressing 		
                                         implement the most advanced and          	 product development and marketing 			
                                         intuitive systems. That’s where High     	 timelines.
                                         Performance Retailing comes in.
                                                                                  “Impulse buying is not really an impulse any longer,” noted
                                         High Performance Retailing drives
                                                                                  Frank Nauta, Advisory Solutions Architect, SAS Retail and
                                         business performance for retailers
                                                                                  Consumer Packaged Goods (CPG). “Today’s shoppers are
                                         because it includes the best of retail
                                                                                  making better-informed buying decisions. They are smarter,
                                         domain expertise plus superior
                                                                                  more diligent and tighter with money.” And because new
                                         analytics, coupled with the latest
                                                                                  product styles, versions and models are rapidly entering the
               high performance computing capabilities. It is more than
                                                                                  marketplace, merchants must be wary of the need to stock
               “feeds and speeds” — it is about helping retailers gain new
                                                                                  the newer item and take a loss on the previous version.
               insights, empowering them to take action and drive business
               impact — resulting in increased margins, revenue, customer         Additionally, as the need grows for more personalized and
               loyalty and satisfaction.                                          localized pricing, the seemingly endless product pricing
               Four key events have pushed the retail industry to the edge        combinations are making category and brand managers’
               of its ability to keep up:                                         heads spin. Those pressures are coupled with the push
                                                                                  for quick sell-through — particularly in the fast-moving
                                                                                  consumer goods, electronics and apparel segments.

                                                                                                                                        ►►    3
SAS High Performance Revenue Optimization
Suite allows retailers to optimize prices at a
granular level down to the store and SKU level.


   SAS HPR can come to the rescue by facilitating success
   through the combination of three key capabilities:                                     In-Memory Analytics allows the data and analytics to run
                                                                                          together simultaneously. In a large department store with
    	    Domain Expertise — backed by 36 years of experience with predictive 	
                                                                                          millions of SKUs, this type of analysis took hours in the past
    	    analytics and work with the majority of the leading global retailers
                                                                                          without In-Memory Analytics. With all the data stored in
    	    Advanced Analytics — faster analysis and more detailed, granular results         memory, all the technological and analytical tricks to make
                                                                                          money and increase wallet share are calculated in real time.
     	   High Performance Computing — featuring the powers of Grid 		
    	    Computing, In-Memory Analytics and In-Database Analytics                         SAS High Performance Retailing addresses some
                                                                                          of the hot issues and opportunities in retail:

                      In-Database Analytics moves the decision-making                     ►► The radical shift in pricing strategies or approaches
                      capabilities closer to all the data. As soon as POS infor-          that drives margins, retains customers and builds brand
                      mation is imported, the results are scored inside the               identity/equity.
                      database. For example, using past purchase behavior and             This shift can be addressed with high performance lifecycle
                      current contents of the basket, the system can better predict       price optimization — spanning regular or everyday pricing,
                      an individual shopper’s future behavior and provide more            promotion optimization whether in traditional circulars
                      appropriate, personalized offers. With real-time scoring,           or new digital promotion vehicles, and optimization of
                      results can be delivered while the shopper is still in the store.   markdown of seasonal goods and clearance items. The
                      Previously, the POS data needed to be removed, scored, then         SAS High Performance Revenue Optimization Suite allows
                      reinserted — a round-tripping task that took hours instead          retailers to optimize prices at a granular level down to the
                      of seconds.                                                         store and SKU level while taking cross-effects into account
                                                                                          and knowing that price transparency is key.




                                                                                                                                                 ►►   4
Retailers have to differentiate their
business using service.
- Paula Rosenblum, Retail Systems Research



               Merchants also are able to perform what-if analyses with        ►► The goal of delivering a more personalized 1:1
               SAS optimization solutions. For example, they can analyze       experience with individual shoppers, and expanding
               and run multiple pricing scenarios on millions/billions of      personalized marketing on a global scale.
               product/location combinations to support markdowns,
                                                                               Retailers who can deliver the right messages and offers to
               promotions and regular pricing strategies.
                                                                               the right consumers at the rights times increase revenue,
               ►► The need to execute optimized assortments at                 margin and customer loyalty.
               the store/SKU level so that localized, even personalized        “Retailers have to differentiate their business using service,”
               assortments can be delivered to customers in stores and         noted Paula Rosenblum, Analyst with Retail Systems
               online and via smartphone applications and kiosks.              Research. "There is almost always something consumers
               Only retailers that can rapidly adjust to market changes,       value alongside price. The challenge is to find the right thing
               competition and knowledgeable customers, and deliver            — and communicate it to the right consumers effectively.”
               optimized local assortments will grow and endure.

               Some key questions that can be addressed with
               high performance assortment optimization include:
                  	 How do you tailor assortments to relevant aspects
                	   of consumer preferences by season or subgroup or 		
                	   merchandise attribute?

                  	 How do you map assortments to space constraints?
                  	 How quickly can your team develop and execute new 	
                	   assortment plans — by stores or clusters of stores or 		
                	   for individuals?

                                                                                                                                       ►►   5
We believe retailers are eager to implement the next generation
of optimization systems given the strong track record of
optimization technology on their P&L.
- Deborah Weinswig, Citi Investment Research & Analysis


   This E-book will provide detailed insights and
   information to help guide retailers down the road of                             With the introduction of high performance versions of the
   High Performance Retailing, covered in three sections:                           optimization solutions, retailers can expect results they
                                                                                    never dreamed of before. For example, they will be able
   I.	 Addressing Market Opportunities with
                                                                                    to limit overstocks and out-of-stocks with better pricing
   	 High Performance Retailing
                                                                                    and markdown strategies; and they can improve results of
   II.	 The Benefits of High Performance Retailing                                  promotional strategies by targeting the right customers with
   III.	 Getting Started with High Performance Retailing                            individualized promotions.

                                                                                    Leading Wall Street financial analyst Deborah Weinswig,
                     I. Addressing Market Opportunities                             Managing Director of the retailing team at Citi Investment
                        with High Performance Retailing                             Research & Analysis, confirms the potential of high
                                                                                    performance optimization. "Retailers maximize returns
                   Each component of High Performance Retailing plays a role
                                                                                    with optimization technologies," Weinswig noted in a
                   in the bigger picture of overall growth and success within
                                                                                    January 2012 report. "Retailers have been investing in
                   a retail or CPG company. While many companies already
                                                                                    optimization systems since the early 2000s and have realized
                   have seen positive results from optimization, planning and
                                                                                    significant top-line and margin benefits as a result of these
                   analytics, the high performance features bring the meaning
                                                                                    investments. Retailers are now looking at the next generation
                   of success to a new level.
                                                                                    of these technologies to build on their existing capabilities,
                                                                                    including price, promotion, size and marketing optimization.
                   High Performance Revenue Optimization:
                                                                                    Technology providers like SAS are at the forefront of this
                   Price, Promotion and Markdown
                                                                                    trend. We believe retailers are eager to implement the next
                   The term “optimization” speaks for itself. It obviously is in    generation of optimization systems given the strong track
                   the best interest of businesses to optimize their processes.     record of optimization technology on their P&L." She called
                   Most leading retailers have taken advantage of some form of      this new trend “optimization on steroids” and ranked it as
                   optimization in the past 10 years, realizing positive results.   the number-one trend in 2011.

                                                                                                                                          ►►   6
A major U.S. retailer reported a margin basis point
improvement of 10 to 40 points with high
performance markdown optimization.




               A number of retail companies already are reporting                High Performance Retailing Promotion
               impressive results with the speed and efficiency at which         Optimization Gives Stores
               the information is made available via high performance            that ‘Mom-and-Pop’ Feeling
               optimization. Business users are now able to implement
                                                                                 Today’s retailers yearn for the way that Mom-and-Pop store
               profitable changes using near-real-time data. They are better
                                                                                 owners catered to individual customers. High performance
               able to take advantage of quickly changing trends. Lacking
                                                                                 promotion optimization can bring the retail experience
               this type of decision-making speed, many merchants will risk
                                                                                 full circle, providing the opportunity to give customers
               lost sales today and in the future.
                                                                                 individualized offers and promotions when they enter the
               Some recent results include: Using customer insights to           store. Today’s shoppers can walk into a store, swipe their
               develop individual offers, one leading retail organization        loyalty card at a kiosk and receive coupons targeted to them,
               improved its offer redemption rate by 6%. A major U.S.            based on their past purchase history and likelihood to buy
               retailer reported a margin basis point improvement of 10 to       certain products.
               40 points with high performance markdown optimization.
                                                                                 Additionally, consumers carrying mobile devices can receive
               An international department store saw revenue jump 3% to
                                                                                 personalized offers through opt-in mobile apps or geo-
               10%, and a North American supermarket chain saw increased
                                                                                 targeting solutions. Again, knowing shoppers’ past purchase
               unit sales, a margin increase of 2% to 7%, and revenue
                                                                                 histories, aligned with their likelihood to purchase certain
               increases of 3%.
                                                                                 products that day, high performance optimization is
               Previously merchants had to run markdown optimization             a win-win for both retailers and the customers.
               at the regional level, but now it can be accomplished at the
                                                                                 Retailers without high performance optimization may
               store level. While they can still look at weekly data, now they
                                                                                 still be waiting until checkout to provide shoppers with
               also can use daily data to help with promotion optimization,
                                                                                 coupons or offers. While that type of offer may help to bring
               especially during the holidays. They could even conduct
                                                                                 shoppers back tomorrow or next week, it doesn’t provide the
               hourly analysis when it comes to a day like Black Friday.
                                                                                 immediate satisfaction of a real-time relevant offer.

                                                                                                                                       ►►   7
Merchandise planning seeks to suggest the right item,
right price and right location. In the high performance
arena, this type of planning can be accomplished more
effectively and at warp speed.



               High performance optimization also provides benefits in           him an offer for a higher margin item, such as sippy cups. In
               the eCommerce arena. “We have solutions that watch what           the end the shopper receives a more palatable offer and the
               you are doing online, monitor your mouse movements,               retailer makes more money on the higher margin item.
               your time in the shopping cart, and your clicks on other
                                                                                 High Performance Planning:
               products,” explained Nauta. The solution is continuously
                                                                                 Assortments and Merchandising
               scoring and rescoring shoppers as they move through the
               site. If a shopper hesitates at any time during the process, or   It is important to speak the language of individual stores.
               abandons the cart, the solution then rescores that shopper in     Merchandise planning seeks to suggest the right item, right
               real time. Based on the retailer’s specifications, that shopper   price, and right location. In the high performance arena, this
               may receive a live chat request or immediate percent-off          type of planning can be accomplished more effectively and
               coupon in order to incent them to purchase. Literally in          at warp speed.
               seconds the solution can decide if that shopper deserves an
               incentive or should be left to their own devices.

               Answering the Margin Call
               Like the movie Moneyball, High Performance Retailing
               invites its users to ask new questions, said Anthony Volpe,
               Retail Analytics Advisor, SAS. For example, at the POS, high
               performance promotion optimization can determine “who
               I am and what I have bought in the past, then make me an
               offer.” Before, cart analysis might have told the retailer that
               the customer is buying diapers and wipes, so give him an
               offer for baby food. But now, with high performance analysis
               of past purchase behavior, the system can decide to give


                                                                                                                                        ►►   8
By tailoring our offering by market, we are able to increase engage-
ment with local customers. The enhancements that SAS is making to its
merchandise planning product in 2012 will enable our merchants
and planners to develop and execute these customized
assortments more easily.
- Bernie Powers, Kohl’s

                 Retailers are now realizing the potential of this type of       and combinations. They can look at stores by individual
                 power. "Localizing our assortments is a key growth initiative   customers. They can create more localized clusters
                 for Kohl's," said Bernie Powers, Kohl's Senior Vice President   based on SKU.
                 for Merchandise Information. "By tailoring our offering
                                                                                 Similarly, merchants must be able to decide which items
                 by market, we are able to increase engagement with local
                                                                                 to keep, which ones to drop and which new items to add.
                 customers. The enhancements that SAS is making to its
                                                                                 Traditionally, merchants have made these decision based
                 merchandise planning product in 2012 will enable our
                                                                                 on revenue, margin and units. But with high performance
                 merchants and planners to develop and execute these
                                                                                 planning, they can incorporate customers’ scores into that
                 customized assortments
                                                                                                               decision, so even if it is not
                 more easily."
                                                                                                               a best-selling item, but is
                 One of the most highly                                                                        important to one of the best
                 sought, yet difficult                                                                         customers in a store, then the
                 to execute, aspects of                                                                        retailer might want to keep
                 assortment planning is being                                                                  that item in that store.
                 able to plan at the store
                 level. With High Performance
                 Retailing, retailers can move
                 to true localization. They
                 can review assortments in a
                 matter of seconds in terms
                 of attributes such as colors




                                                                                                                                      ►►   9
With the predictive capabilities we have with SAS tapping
into the historical purchasing data of almost every grocery
shopper in the U.S., we're able to reach the right people
with the right messages with more precision than
anyone else in the market.
- Eric Williams, Catalina Marketing (retired)
                High Performance Analytics:                                       company. The speed of data did that. We are literally getting
                Developing 1:1 Interactions                                       all U.S. sales information in five hours and actively using that
                                                                                  information to market to consumers the next day.”
                Catalina Marketing helps its retail clients reach the right
                customers with the right messages and offers. With high           To stay on the cutting edge, Catalina needs to build accurate
                performance analytics, Catalina is growing faster than ever.      models quickly. "I know from experience and discussions
                "We've been helping our clients reach the right people with       with colleagues in the industry how long it can take to
                the right messages for 25 years," said Williams. "But with        build a predictive model,'' Wachter noted. "They're taking
                the predictive capabilities we have with SAS tapping into the     more than a month to build one model. Using SAS, we've
                historical purchasing data of almost every grocery shopper in     automated the execution of our models and scoring them
                the U.S., we're able to do it with more precision than anyone     against our entire 140 million consumer database for the
                else in the market."                                              implementation of marketing campaigns literally in days."

                “SAS solutions have allowed us to actually predict what
                customers are likely to buy and that has revolutionized
                our ability to make our clients’ coupons and messages
                relevant to shoppers,” according to a Catalina executive.
                Using SAS Scoring Accelerator for Netezza, Catalina
                has reduced its model-scoring times from 4.5 hours to
                approximately 60 seconds.

                The change in Catalina’s approach has been pivotal. “At the
                start, if you bought X you get a coupon for product Y, but that
                decision was based only on current purchase information,”
                Williams explained. Catalina actually worked with SAS to help
                develop the use of historical purchase data. “That whole
                concept changed Catalina into an unbelievably profitable
                                                                                                                                          ►►   10
There is almost always something consumers value along-
side price. The challenge is to find the right thing — and
communicate it to the right consumers effectively.
- Paula Rosenblum, Retail Systems Research


              "Not only that, but our samples are 10 to 15 times larger
              than anything anyone else is doing today,'' Williams added.
                                                                                   ll. The Benefits of High
              "Nobody could do what SAS is enabling us to do — the
                                                                                         Performance Retailing
              capabilities just didn't exist beforehand."                      With High Performance Retailing, merchants now have
                                                                               the horsepower to localize assortments, better allocate
              High Performance Retailing analytics prevents merchants
                                                                               employees and merchandise, and improve in-store
              from having to compromise their models. They no longer
                                                                               marketing.
              need to accept the assumptions; they can be more precise by
              having better models.                                            Retailers Can Count on Significant
              Williams used the fast-moving consumer goods industry as         Benefits When Implementing
              an example. “About 20,000 new products hit the door of a         High Performance Retailing:
              retail store on an annual basis,” he explained. “Well over 90%
              never see the light of day in year two — flavor extensions,      1.	 Ask and Answer More Innovative Questions and
              line extensions, packaging changes, for example. With            	     Receive More Precise Answers for Actionable Results
              high performance analytics, we now have the information          2.	 Increase Speed of Analysis
              available to begin to predict what people will want next,        3.	 IT and Business Can Work More Strategically — 		
              rather than just using instinct.”                                	     Reducing Tedious, Time-Consuming One-Off Projects
              A large grocery chain in North America is using SAS              4.	 Give Real-Time Decision-Making to Retailers
              grocery analytics to help serve individual customers             	     Across the Supply Chain
              in individual markets.                                           5.	 Start Small and Scale Up
              With SAS Analytics, the grocer knows key customers and           6.	 Tame Big Data
              understands the different types of customer by individual        7.	 Encourage Better Collaboration Between
              market. Getting the analytics down to the operations of the      	     Consumer Packaged Goods (CPG) and Retail
              individual store level is where the real value lies.
                                                                               8.	 Avoid Offer Spam

                                                                                                                                   ►►    11
High Performance Retailing and here. Quote or callout
“Quote or callout goes here offers far more dimensions than
ever here and here. Quote or callout goes cross-elasticities
goes before. Now companies can calculate here and here.”
of demand for SAS
- Frank Nauta, thousands and thousands of SKUs in the
grocery store.



               1.  Ask and Answer More Innovative Questions                  2.   Increase Speed of Analysis.
               and Receive More Precise Answers for
               Actionable Results.                                           With High Performance Retailing, revenue optimization for
                                                                             a large department store, for example, can be completed in
               High Performance Retailing is really about the uninhibited    less than two hours for the entire organization. Executives
               use of analytics: being able to answer questions that you     can generate a daily forecast and facilitate immediate
               could never answer before because it took too long, and       decisions, which was not feasible earlier. Price optimization
               using uninhibited creativity to better leverage the data      can be calculated for an entire organization, in multiple
               you have.                                                     scenarios, in less than four hours vs. waiting days for
                                                                             results previously.
               High Performance Retailing offers far more dimensions than
               ever before. Now companies can calculate cross-elasticities   Before High Performance Retailing, merchants were forced
               of demand for thousands and thousands of SKUs in the          to run models overnight, put in a change in multiple demand
               grocery store. Previously, without a hypothesis of a cross-   models for different categories, look at them the next day
               sell of beer and diapers, they could only use                                                            and fine-tune
               intuition to come up with that combination.                                                              them. That process
               Now the technology can calculate elasticities                                                            could take up to a
               and come up with combinations category and                                                               week. Now they
               brand managers never thought of before.                                                                  can run multiple
               The winners will be those with the most                                                                  models in a matter
               creative groups that ask better questions. This                                                          of minutes within
               completely changes how companies manage                                                                  the same day. A
               and run their businesses.                                                                                process that used
                                                                                                                        to take seven days
                                                                                                                        can be done in one
                                                                                                                        day today.
                                                                                                                                   ►►   12
Today’s retail and CPG partners are realizing the value
of using high performance resources to collaborate
rather than compete. The end goal is selling more of
the products customers want.



               3.   IT and Business Can Work More                             5.   Start Small and Scale Up.
               Strategically — Reducing Tedious, Time-
               Consuming One-Off Projects.                                    By working with a partner that can provide each different
                                                                              component of the business suite, merchants can choose to
               Business users don’t want to be forced to have to take every   start with one component, such as markdown optimization,
               need to the IT. Retail IT organizations are spread thin and    then add promotion optimization later, or they can ramp up
               face an exploding amount of new needs and technologies.        with the full suite of optimization solutions from the start.
               High Performance Retailing can help both. IT can build a
               strategic retail analytics foundation. Business users can
               explore, visualize, hypothesize and test hypotheses and        6.   Tame Big Data.
               put innovative ideas into action — using science to help       High Performance Retailing tames big data by getting directly
               merchants know and engage customers. Merchants can             to the nuts and bolts of the problem. “It can boil all the
               augment the art of retail.                                     questions down to a "yes" or "no" answer, or a score of 1 or
                                                                              zero,” explained Nauta. This becomes particularly significant
                                                                              when examining social media communication. “High
               4.  Give Real-Time Decision-Making to                          Performance Retailing digs through all the sentimental noise
               Retailers Across the Supply Chain.                             and get likes vs. dislikes, detecting market trends — then you
               From inventory and assortment decisions to real-time           know how to market.” High Performance Retailing allows
                                                                              merchants to dissect social communications in real time — in
               offers — retailers need rapid, fact-based ways to make the
                                                                              seconds vs. days for real-time insights, or months for figuring
               best and quickest decisions. Merchants are now competing
                                                                              out a trend. “Now we can detect change in demand based
               across segments and channels — drug stores and big-box
                                                                              on what people are writing on Facebook,” he explained. “It’s
               merchants are selling groceries, and shoppers can buy their    amazing how much information is generated by the ‘like’
               favorite apparel or hard-to-find foods on Amazon. Therefore,   button. With that information we can track what they are
               store managers and associates must be empowered to             going to do, their followers, what’s written on their wall.”
               provide the best service when customers walk into the
               store. High Performance Retailing enables game-changing
               decisions and actions.                                                                                               ►►   13
Data is going to change your company, but it must be tied
to the merchandising and marketing teams directly.
- Eric Williams, Catalina Marketing (retired)



                                                                              has a memory of previous offers and shoppers’ responses to
               7.  Encourage Better Collaboration Between
                                                                              those offers, merchants can now send out the right messages
               Consumer Packaged Goods (CPG) and Retail.
                                                                              at the right time — reinforcing brand loyalty and preventing
               Today’s retail and CPG partners are realizing the value of     customers from jumping to another brand.
               using high performance resources to collaborate rather
               than compete. The end goal is selling more of the products       III. Getting Started with
               customers want. By sharing real-time data, retailers and CPG          High Performance Retailing
               companies can stock the right product assortment and make
               better use of trade promotion dollars. High performance        Once a company understands the value High Performance
               computing can provide more accurate forecasts faster.          Retailing will bring to the business, the next step is deciding
               Globally, many of today’s CPG companies and retailers          how to get started. That decision may depend upon the
               are sharing data and working together to better analyze        level of innovation built into the culture of the company.
               shopping behavior.                                             Many companies don’t have the culture of looking for new
                                                                              insights in place, so they may just ask for faster markdown
               8.   Avoid Offer Spam.                                         optimization, for example — a cost reduction strategy or
                                                                              process improvement. That kind of company should get
               High performance computing can help companies avoid
                                                                              started with High Performance Retailing in a concentrated
               sending target shoppers too many messages, and too many
                                                                              way, focusing on one area like markdown, while thinking
               of the wrong messages. “The last thing you want to do is
                                                                              about how they might use an environment that gives them
               inundate your consumer base with multiple communications
                                                                              more power to gain better insights.
               so that they think they are receiving spam,” noted Eric
               Williams, Executive Vice President and Chief Information       On the other hand, for an innovative company like Target,
               Officer (recently retired), Catalina Marketing. “You must      or a large, innovative CPG company, their teams will want to
               have a memory of what offer you spit out to me last week       have multiple high performance platforms available so they
               that I said ‘No’ to,” added Nauta. By using a solution that    can be creative across the board from day one.

                                                                                                                                      ►►   14
High Performance Retailing gives individuals
the opportunity to become superstars in the
organization.




               The learning curve for High Performance Retailing should         Williams shared some insights on misconceptions he believes
               be quick and easy. It is an exciting time for the members        are rampant in the industry. “There is a belief you have
               of business teams. It is not the type of change that puts        to go hire statisticians for this type of analysis,” he noted.
               people’s jobs at risk. It gives individuals the opportunity to   “That’s false.” Secondly, he noted, organizations must
               become superstars in the organization. If they find the right    eliminate the idea that the analytics team should report to
               insights — such as realizing a customer is highly sensitive      IT or Operations. “I have cautioned everyone — don’t do
               to the front page of the weekly                                                                 either. Data is going to change
               circular, and there are 1,300 other                                                             your company but it must be
               customers just like them — that                                                                 tied to the merchandising and
               insight would be a big win.                                                                     marketing teams directly.”

               Because High Performance Retailing                                                           For example, when kicking
               analysis can be completed so                                                                 off a loyalty program, the
               quickly, ideas can be tested easily                                                          marketing team should work
               and often without the risk of                                                                with the finance team to analyze
               damaging the business or bringing                                                            customer credit card data.
               IT to its knees. For example, High                                                           Typically credit card operations
               Performance Retailing analysis can                                                           are completely separate from
               uncover cross-sell items that are                                                            marketing. “It is a great way to
               not necessarily intuitive. This opens                                                        understand your customer base
               up a whole new set of ideas and                                                              before launching a major loyalty
               potential for creating new ideas — it                                                        program,” said Williams.
               is a different way of talking about
               high performance.



                                                                                                                                     ►►   15
If business units continue to operate independently,
merchants will never truly understand the consumer
in the marketplace.




               Eliminating Data Silos                                         across merchandising, supply chain and store operations,
                                                                              for example. This leading grocer is empowered to make
               Most importantly, companies need to eliminate the
                                                                              better decisions at store level. They engage their customers,
               silos where they store some data for sales, other for
                                                                              and grow and retain customers over the long haul. Science
               merchandising, and more for promotions/planning. If these
                                                                              powers their company goal of delighting customers.
               business units continue to operate independently, merchants
                                                                              By keeping customers at the center, at their focus, this
               will never truly understand the consumer in the marketplace.
                                                                              organization continues to succeed.
               A major grocery chain in North America has embraced this
               concept throughout the chain, which serves customers with
               a wide range of regional differences and brand strategies.
               This organization makes sure their pricing and promotion
               optimization engines are linked with their shopper insight
               foundation. Rather than looking at the science of price
               optimization in isolation, this leading retailer can make
               strategic, holistic and more informed pricing decisions for
               their valued customers in a wide range of markets.

               Additionally, this retailer uses SAS as a strategic provider
               for integrated retail analytics. Their customer and other
               data is all collected and analyzed in one location and this
               company has a holistic view throughout the operation —




                                                                                                                                    ►►   16
The bottom line is that High Performance Retailing puts
better and faster analytics in the hands of merchants, for
better insights and speed to market.




               Conclusion
               In today’s fast-changing retail environment, retail and        The combination of SAS domain expertise, high performance
               CPG companies must react just as quickly in order to stay      computing capabilities and analytics’ experience creates
               competitive. While optimization, planning and analytics have   the new realm of High Performance Retailing. With High
               been important components of the retail equation, they         Performance Retailing, merchants can collect, analyze
               become significantly more powerful when fueled by high         and make decisions in warp speed, in the “retail moment
               performance computing.                                         of truth” — as consumers are standing in the aisle, are at
                                                                              their online shopping carts checking out, or are conducting
                                                                              product research online. The highly advanced High
                                                                              Performance Retailing solutions recommend new cross-
                                                                              sell and upsell combinations that intuition alone could not
                                                                              match. And, by effectively analyzing all offers across all
                                                                              channels, High Performance Retailing can help companies
                                                                              avoid shopper offer fatigue — saving current and
                                                                              future sales.

                                                                              The bottom line is that High Performance Retailing puts
                                                                              better and faster analytics in the hands of merchants,
                                                                              for better insights and speed to market. Without it, retail
                                                                              companies will pay the cost of not reacting fast enough
                                                                              in today’s environment.




                                                                                                                                     ►►     17
About SAS
                              SAS helps retailers and grocers spend less time crunching numbers and more
                              time growing revenue with key technologies customized for today’s multichannel
World Headquarters            merchants. Built around a powerful core of market-leading business analytics, our
SAS Institute Inc.
                              comprehensive suite of retail solutions tackles the industry’s greatest challenges,
100 SAS Campus Drive
Cary, NC 27513-2414, USA
                              including customer insight (customer intelligence and social media analytics); price
P: 919.677.8000               optimization (regular, promotion and markdown); size optimization (size profiling and
F: 919.677.4444               pack optimization); assortment planning; integrated merchandise planning (allocation,
                              space management and optimization); forecasting (across the enterprise and across
                              market segments); and loss prevention. With more than 35 years of experience
                              working with leading grocers and retailers, SAS helps retailers make better decisions
                              faster. Learn more at www.sas.com/retail.




                              About Retail TouchPoints
411 State Route 17 South
Suite 410
                              Retail TouchPoints is an online publishing network for retail executives, with content
Hasbrouck Heights, NJ 07604   focused on optimizing the customer experience across all channels. Tapping into the
P: 201.257.8528               power of the Web 2.0 environment, the Retail TouchPoints network is made up of
F: 201.426.0181               a weekly e-newsletter, category-specific blogs, twice monthly Special Reports, web
                              seminars, benchmark research, virtual events, and a content-rich web site at
                              www.retailtouchpoints.com.


                                                                                                                       ►►   18

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High performance-retail-ebook

  • 1. “Quote or callout goes here and here. Quote or callout goes here and here. Quote or callout goes here and here.” - Frank Nauta, SAS Ratium cum est volo tem remquiscid es doluptus id quamendit quis exerrov idebiscide vendandia debitatis aperion sequia consequ ossequiaepta ipsa soluptatur accus sequam qui te voloremquo qui ratur? ►► 1
  • 2. “Quote or callout goes here and here. Quote or callout Table of Contents goes here and here. Quote or callout goes here and here.” - Frank Nauta, SAS High Performance Retail: The Art of the Possible_______________________________________________________ 3 In-Database Analytics _________________________________________________________________________ 4 In-Memory Analytics _________________________________________________________________________ 4 I. Addressing Market Opportunities with High Performance Retailing______________________________________ 6 High Performance Revenue Optimization: Price, Promotion and Markdown_ _____________________________ 6 High Performance Planning: Assortments and Merchandising_ ________________________________________ 8 _ High Performance Analytics: Developing 1:1 Interactions _____________________________________________ 10 II. The Benefits of High Performance Retailing_________________________________________________________ 11 1. Ask and Answer More Innovative Questions______________________________________________________ 12 2. Increase Speed of Analysis _ __________________________________________________________________ 12 _ 3. IT and Business Can Work More Strategically _____________________________________________________ 13 4. Give Real-Time Decision-Making to Retailers Across the Supply Chain _ ________________________________ 13 5. Start Small and Scale Up______________________________________________________________________ 13 6. Tame Big Data______________________________________________________________________________ 13 7. Encourage Better Retailer-CPG Collaboration_ ____________________________________________________ 14 8. Avoid Offer Spam_ __________________________________________________________________________ 14 III. Getting Started with High Performance Retailing____________________________________________________ 14 Eliminating Data Silos___________________________________________________________________________ 16 Conclusion_ _____________________________________________________________________________________ 17 ►► 2
  • 3. “Impulse buying is not really an impulse any longer. Today’s shoppers are making better-informed buying decisions.” - Frank Nauta, SAS High Performance Retail: 1. Mobilized consumers are accessing up- to-the-minute information in real time. The Art of the Possible 2. Products are advancing rapidly, creating the A perfect storm of factors are need for constant merchandising changes. in constant motion, forming a tidal wave effect on the retail 3. Pricing options are multiplying at an industry. In order to stay on top of unprecedented rate. the changes, merchants need to 4. Competitive pressures are compressing implement the most advanced and product development and marketing intuitive systems. That’s where High timelines. Performance Retailing comes in. “Impulse buying is not really an impulse any longer,” noted High Performance Retailing drives Frank Nauta, Advisory Solutions Architect, SAS Retail and business performance for retailers Consumer Packaged Goods (CPG). “Today’s shoppers are because it includes the best of retail making better-informed buying decisions. They are smarter, domain expertise plus superior more diligent and tighter with money.” And because new analytics, coupled with the latest product styles, versions and models are rapidly entering the high performance computing capabilities. It is more than marketplace, merchants must be wary of the need to stock “feeds and speeds” — it is about helping retailers gain new the newer item and take a loss on the previous version. insights, empowering them to take action and drive business impact — resulting in increased margins, revenue, customer Additionally, as the need grows for more personalized and loyalty and satisfaction. localized pricing, the seemingly endless product pricing Four key events have pushed the retail industry to the edge combinations are making category and brand managers’ of its ability to keep up: heads spin. Those pressures are coupled with the push for quick sell-through — particularly in the fast-moving consumer goods, electronics and apparel segments. ►► 3
  • 4. SAS High Performance Revenue Optimization Suite allows retailers to optimize prices at a granular level down to the store and SKU level. SAS HPR can come to the rescue by facilitating success through the combination of three key capabilities: In-Memory Analytics allows the data and analytics to run together simultaneously. In a large department store with Domain Expertise — backed by 36 years of experience with predictive millions of SKUs, this type of analysis took hours in the past analytics and work with the majority of the leading global retailers without In-Memory Analytics. With all the data stored in Advanced Analytics — faster analysis and more detailed, granular results memory, all the technological and analytical tricks to make money and increase wallet share are calculated in real time. High Performance Computing — featuring the powers of Grid Computing, In-Memory Analytics and In-Database Analytics SAS High Performance Retailing addresses some of the hot issues and opportunities in retail: In-Database Analytics moves the decision-making ►► The radical shift in pricing strategies or approaches capabilities closer to all the data. As soon as POS infor- that drives margins, retains customers and builds brand mation is imported, the results are scored inside the identity/equity. database. For example, using past purchase behavior and This shift can be addressed with high performance lifecycle current contents of the basket, the system can better predict price optimization — spanning regular or everyday pricing, an individual shopper’s future behavior and provide more promotion optimization whether in traditional circulars appropriate, personalized offers. With real-time scoring, or new digital promotion vehicles, and optimization of results can be delivered while the shopper is still in the store. markdown of seasonal goods and clearance items. The Previously, the POS data needed to be removed, scored, then SAS High Performance Revenue Optimization Suite allows reinserted — a round-tripping task that took hours instead retailers to optimize prices at a granular level down to the of seconds. store and SKU level while taking cross-effects into account and knowing that price transparency is key. ►► 4
  • 5. Retailers have to differentiate their business using service. - Paula Rosenblum, Retail Systems Research Merchants also are able to perform what-if analyses with ►► The goal of delivering a more personalized 1:1 SAS optimization solutions. For example, they can analyze experience with individual shoppers, and expanding and run multiple pricing scenarios on millions/billions of personalized marketing on a global scale. product/location combinations to support markdowns, Retailers who can deliver the right messages and offers to promotions and regular pricing strategies. the right consumers at the rights times increase revenue, ►► The need to execute optimized assortments at margin and customer loyalty. the store/SKU level so that localized, even personalized “Retailers have to differentiate their business using service,” assortments can be delivered to customers in stores and noted Paula Rosenblum, Analyst with Retail Systems online and via smartphone applications and kiosks. Research. "There is almost always something consumers Only retailers that can rapidly adjust to market changes, value alongside price. The challenge is to find the right thing competition and knowledgeable customers, and deliver — and communicate it to the right consumers effectively.” optimized local assortments will grow and endure. Some key questions that can be addressed with high performance assortment optimization include: How do you tailor assortments to relevant aspects of consumer preferences by season or subgroup or merchandise attribute? How do you map assortments to space constraints? How quickly can your team develop and execute new assortment plans — by stores or clusters of stores or for individuals? ►► 5
  • 6. We believe retailers are eager to implement the next generation of optimization systems given the strong track record of optimization technology on their P&L. - Deborah Weinswig, Citi Investment Research & Analysis This E-book will provide detailed insights and information to help guide retailers down the road of With the introduction of high performance versions of the High Performance Retailing, covered in three sections: optimization solutions, retailers can expect results they never dreamed of before. For example, they will be able I. Addressing Market Opportunities with to limit overstocks and out-of-stocks with better pricing High Performance Retailing and markdown strategies; and they can improve results of II. The Benefits of High Performance Retailing promotional strategies by targeting the right customers with III. Getting Started with High Performance Retailing individualized promotions. Leading Wall Street financial analyst Deborah Weinswig, I. Addressing Market Opportunities Managing Director of the retailing team at Citi Investment with High Performance Retailing Research & Analysis, confirms the potential of high performance optimization. "Retailers maximize returns Each component of High Performance Retailing plays a role with optimization technologies," Weinswig noted in a in the bigger picture of overall growth and success within January 2012 report. "Retailers have been investing in a retail or CPG company. While many companies already optimization systems since the early 2000s and have realized have seen positive results from optimization, planning and significant top-line and margin benefits as a result of these analytics, the high performance features bring the meaning investments. Retailers are now looking at the next generation of success to a new level. of these technologies to build on their existing capabilities, including price, promotion, size and marketing optimization. High Performance Revenue Optimization: Technology providers like SAS are at the forefront of this Price, Promotion and Markdown trend. We believe retailers are eager to implement the next The term “optimization” speaks for itself. It obviously is in generation of optimization systems given the strong track the best interest of businesses to optimize their processes. record of optimization technology on their P&L." She called Most leading retailers have taken advantage of some form of this new trend “optimization on steroids” and ranked it as optimization in the past 10 years, realizing positive results. the number-one trend in 2011. ►► 6
  • 7. A major U.S. retailer reported a margin basis point improvement of 10 to 40 points with high performance markdown optimization. A number of retail companies already are reporting High Performance Retailing Promotion impressive results with the speed and efficiency at which Optimization Gives Stores the information is made available via high performance that ‘Mom-and-Pop’ Feeling optimization. Business users are now able to implement Today’s retailers yearn for the way that Mom-and-Pop store profitable changes using near-real-time data. They are better owners catered to individual customers. High performance able to take advantage of quickly changing trends. Lacking promotion optimization can bring the retail experience this type of decision-making speed, many merchants will risk full circle, providing the opportunity to give customers lost sales today and in the future. individualized offers and promotions when they enter the Some recent results include: Using customer insights to store. Today’s shoppers can walk into a store, swipe their develop individual offers, one leading retail organization loyalty card at a kiosk and receive coupons targeted to them, improved its offer redemption rate by 6%. A major U.S. based on their past purchase history and likelihood to buy retailer reported a margin basis point improvement of 10 to certain products. 40 points with high performance markdown optimization. Additionally, consumers carrying mobile devices can receive An international department store saw revenue jump 3% to personalized offers through opt-in mobile apps or geo- 10%, and a North American supermarket chain saw increased targeting solutions. Again, knowing shoppers’ past purchase unit sales, a margin increase of 2% to 7%, and revenue histories, aligned with their likelihood to purchase certain increases of 3%. products that day, high performance optimization is Previously merchants had to run markdown optimization a win-win for both retailers and the customers. at the regional level, but now it can be accomplished at the Retailers without high performance optimization may store level. While they can still look at weekly data, now they still be waiting until checkout to provide shoppers with also can use daily data to help with promotion optimization, coupons or offers. While that type of offer may help to bring especially during the holidays. They could even conduct shoppers back tomorrow or next week, it doesn’t provide the hourly analysis when it comes to a day like Black Friday. immediate satisfaction of a real-time relevant offer. ►► 7
  • 8. Merchandise planning seeks to suggest the right item, right price and right location. In the high performance arena, this type of planning can be accomplished more effectively and at warp speed. High performance optimization also provides benefits in him an offer for a higher margin item, such as sippy cups. In the eCommerce arena. “We have solutions that watch what the end the shopper receives a more palatable offer and the you are doing online, monitor your mouse movements, retailer makes more money on the higher margin item. your time in the shopping cart, and your clicks on other High Performance Planning: products,” explained Nauta. The solution is continuously Assortments and Merchandising scoring and rescoring shoppers as they move through the site. If a shopper hesitates at any time during the process, or It is important to speak the language of individual stores. abandons the cart, the solution then rescores that shopper in Merchandise planning seeks to suggest the right item, right real time. Based on the retailer’s specifications, that shopper price, and right location. In the high performance arena, this may receive a live chat request or immediate percent-off type of planning can be accomplished more effectively and coupon in order to incent them to purchase. Literally in at warp speed. seconds the solution can decide if that shopper deserves an incentive or should be left to their own devices. Answering the Margin Call Like the movie Moneyball, High Performance Retailing invites its users to ask new questions, said Anthony Volpe, Retail Analytics Advisor, SAS. For example, at the POS, high performance promotion optimization can determine “who I am and what I have bought in the past, then make me an offer.” Before, cart analysis might have told the retailer that the customer is buying diapers and wipes, so give him an offer for baby food. But now, with high performance analysis of past purchase behavior, the system can decide to give ►► 8
  • 9. By tailoring our offering by market, we are able to increase engage- ment with local customers. The enhancements that SAS is making to its merchandise planning product in 2012 will enable our merchants and planners to develop and execute these customized assortments more easily. - Bernie Powers, Kohl’s Retailers are now realizing the potential of this type of and combinations. They can look at stores by individual power. "Localizing our assortments is a key growth initiative customers. They can create more localized clusters for Kohl's," said Bernie Powers, Kohl's Senior Vice President based on SKU. for Merchandise Information. "By tailoring our offering Similarly, merchants must be able to decide which items by market, we are able to increase engagement with local to keep, which ones to drop and which new items to add. customers. The enhancements that SAS is making to its Traditionally, merchants have made these decision based merchandise planning product in 2012 will enable our on revenue, margin and units. But with high performance merchants and planners to develop and execute these planning, they can incorporate customers’ scores into that customized assortments decision, so even if it is not more easily." a best-selling item, but is One of the most highly important to one of the best sought, yet difficult customers in a store, then the to execute, aspects of retailer might want to keep assortment planning is being that item in that store. able to plan at the store level. With High Performance Retailing, retailers can move to true localization. They can review assortments in a matter of seconds in terms of attributes such as colors ►► 9
  • 10. With the predictive capabilities we have with SAS tapping into the historical purchasing data of almost every grocery shopper in the U.S., we're able to reach the right people with the right messages with more precision than anyone else in the market. - Eric Williams, Catalina Marketing (retired) High Performance Analytics: company. The speed of data did that. We are literally getting Developing 1:1 Interactions all U.S. sales information in five hours and actively using that information to market to consumers the next day.” Catalina Marketing helps its retail clients reach the right customers with the right messages and offers. With high To stay on the cutting edge, Catalina needs to build accurate performance analytics, Catalina is growing faster than ever. models quickly. "I know from experience and discussions "We've been helping our clients reach the right people with with colleagues in the industry how long it can take to the right messages for 25 years," said Williams. "But with build a predictive model,'' Wachter noted. "They're taking the predictive capabilities we have with SAS tapping into the more than a month to build one model. Using SAS, we've historical purchasing data of almost every grocery shopper in automated the execution of our models and scoring them the U.S., we're able to do it with more precision than anyone against our entire 140 million consumer database for the else in the market." implementation of marketing campaigns literally in days." “SAS solutions have allowed us to actually predict what customers are likely to buy and that has revolutionized our ability to make our clients’ coupons and messages relevant to shoppers,” according to a Catalina executive. Using SAS Scoring Accelerator for Netezza, Catalina has reduced its model-scoring times from 4.5 hours to approximately 60 seconds. The change in Catalina’s approach has been pivotal. “At the start, if you bought X you get a coupon for product Y, but that decision was based only on current purchase information,” Williams explained. Catalina actually worked with SAS to help develop the use of historical purchase data. “That whole concept changed Catalina into an unbelievably profitable ►► 10
  • 11. There is almost always something consumers value along- side price. The challenge is to find the right thing — and communicate it to the right consumers effectively. - Paula Rosenblum, Retail Systems Research "Not only that, but our samples are 10 to 15 times larger than anything anyone else is doing today,'' Williams added. ll. The Benefits of High "Nobody could do what SAS is enabling us to do — the Performance Retailing capabilities just didn't exist beforehand." With High Performance Retailing, merchants now have the horsepower to localize assortments, better allocate High Performance Retailing analytics prevents merchants employees and merchandise, and improve in-store from having to compromise their models. They no longer marketing. need to accept the assumptions; they can be more precise by having better models. Retailers Can Count on Significant Williams used the fast-moving consumer goods industry as Benefits When Implementing an example. “About 20,000 new products hit the door of a High Performance Retailing: retail store on an annual basis,” he explained. “Well over 90% never see the light of day in year two — flavor extensions, 1. Ask and Answer More Innovative Questions and line extensions, packaging changes, for example. With Receive More Precise Answers for Actionable Results high performance analytics, we now have the information 2. Increase Speed of Analysis available to begin to predict what people will want next, 3. IT and Business Can Work More Strategically — rather than just using instinct.” Reducing Tedious, Time-Consuming One-Off Projects A large grocery chain in North America is using SAS 4. Give Real-Time Decision-Making to Retailers grocery analytics to help serve individual customers Across the Supply Chain in individual markets. 5. Start Small and Scale Up With SAS Analytics, the grocer knows key customers and 6. Tame Big Data understands the different types of customer by individual 7. Encourage Better Collaboration Between market. Getting the analytics down to the operations of the Consumer Packaged Goods (CPG) and Retail individual store level is where the real value lies. 8. Avoid Offer Spam ►► 11
  • 12. High Performance Retailing and here. Quote or callout “Quote or callout goes here offers far more dimensions than ever here and here. Quote or callout goes cross-elasticities goes before. Now companies can calculate here and here.” of demand for SAS - Frank Nauta, thousands and thousands of SKUs in the grocery store. 1. Ask and Answer More Innovative Questions 2. Increase Speed of Analysis. and Receive More Precise Answers for Actionable Results. With High Performance Retailing, revenue optimization for a large department store, for example, can be completed in High Performance Retailing is really about the uninhibited less than two hours for the entire organization. Executives use of analytics: being able to answer questions that you can generate a daily forecast and facilitate immediate could never answer before because it took too long, and decisions, which was not feasible earlier. Price optimization using uninhibited creativity to better leverage the data can be calculated for an entire organization, in multiple you have. scenarios, in less than four hours vs. waiting days for results previously. High Performance Retailing offers far more dimensions than ever before. Now companies can calculate cross-elasticities Before High Performance Retailing, merchants were forced of demand for thousands and thousands of SKUs in the to run models overnight, put in a change in multiple demand grocery store. Previously, without a hypothesis of a cross- models for different categories, look at them the next day sell of beer and diapers, they could only use and fine-tune intuition to come up with that combination. them. That process Now the technology can calculate elasticities could take up to a and come up with combinations category and week. Now they brand managers never thought of before. can run multiple The winners will be those with the most models in a matter creative groups that ask better questions. This of minutes within completely changes how companies manage the same day. A and run their businesses. process that used to take seven days can be done in one day today. ►► 12
  • 13. Today’s retail and CPG partners are realizing the value of using high performance resources to collaborate rather than compete. The end goal is selling more of the products customers want. 3. IT and Business Can Work More 5. Start Small and Scale Up. Strategically — Reducing Tedious, Time- Consuming One-Off Projects. By working with a partner that can provide each different component of the business suite, merchants can choose to Business users don’t want to be forced to have to take every start with one component, such as markdown optimization, need to the IT. Retail IT organizations are spread thin and then add promotion optimization later, or they can ramp up face an exploding amount of new needs and technologies. with the full suite of optimization solutions from the start. High Performance Retailing can help both. IT can build a strategic retail analytics foundation. Business users can explore, visualize, hypothesize and test hypotheses and 6. Tame Big Data. put innovative ideas into action — using science to help High Performance Retailing tames big data by getting directly merchants know and engage customers. Merchants can to the nuts and bolts of the problem. “It can boil all the augment the art of retail. questions down to a "yes" or "no" answer, or a score of 1 or zero,” explained Nauta. This becomes particularly significant when examining social media communication. “High 4. Give Real-Time Decision-Making to Performance Retailing digs through all the sentimental noise Retailers Across the Supply Chain. and get likes vs. dislikes, detecting market trends — then you From inventory and assortment decisions to real-time know how to market.” High Performance Retailing allows merchants to dissect social communications in real time — in offers — retailers need rapid, fact-based ways to make the seconds vs. days for real-time insights, or months for figuring best and quickest decisions. Merchants are now competing out a trend. “Now we can detect change in demand based across segments and channels — drug stores and big-box on what people are writing on Facebook,” he explained. “It’s merchants are selling groceries, and shoppers can buy their amazing how much information is generated by the ‘like’ favorite apparel or hard-to-find foods on Amazon. Therefore, button. With that information we can track what they are store managers and associates must be empowered to going to do, their followers, what’s written on their wall.” provide the best service when customers walk into the store. High Performance Retailing enables game-changing decisions and actions. ►► 13
  • 14. Data is going to change your company, but it must be tied to the merchandising and marketing teams directly. - Eric Williams, Catalina Marketing (retired) has a memory of previous offers and shoppers’ responses to 7. Encourage Better Collaboration Between those offers, merchants can now send out the right messages Consumer Packaged Goods (CPG) and Retail. at the right time — reinforcing brand loyalty and preventing Today’s retail and CPG partners are realizing the value of customers from jumping to another brand. using high performance resources to collaborate rather than compete. The end goal is selling more of the products III. Getting Started with customers want. By sharing real-time data, retailers and CPG High Performance Retailing companies can stock the right product assortment and make better use of trade promotion dollars. High performance Once a company understands the value High Performance computing can provide more accurate forecasts faster. Retailing will bring to the business, the next step is deciding Globally, many of today’s CPG companies and retailers how to get started. That decision may depend upon the are sharing data and working together to better analyze level of innovation built into the culture of the company. shopping behavior. Many companies don’t have the culture of looking for new insights in place, so they may just ask for faster markdown 8. Avoid Offer Spam. optimization, for example — a cost reduction strategy or process improvement. That kind of company should get High performance computing can help companies avoid started with High Performance Retailing in a concentrated sending target shoppers too many messages, and too many way, focusing on one area like markdown, while thinking of the wrong messages. “The last thing you want to do is about how they might use an environment that gives them inundate your consumer base with multiple communications more power to gain better insights. so that they think they are receiving spam,” noted Eric Williams, Executive Vice President and Chief Information On the other hand, for an innovative company like Target, Officer (recently retired), Catalina Marketing. “You must or a large, innovative CPG company, their teams will want to have a memory of what offer you spit out to me last week have multiple high performance platforms available so they that I said ‘No’ to,” added Nauta. By using a solution that can be creative across the board from day one. ►► 14
  • 15. High Performance Retailing gives individuals the opportunity to become superstars in the organization. The learning curve for High Performance Retailing should Williams shared some insights on misconceptions he believes be quick and easy. It is an exciting time for the members are rampant in the industry. “There is a belief you have of business teams. It is not the type of change that puts to go hire statisticians for this type of analysis,” he noted. people’s jobs at risk. It gives individuals the opportunity to “That’s false.” Secondly, he noted, organizations must become superstars in the organization. If they find the right eliminate the idea that the analytics team should report to insights — such as realizing a customer is highly sensitive IT or Operations. “I have cautioned everyone — don’t do to the front page of the weekly either. Data is going to change circular, and there are 1,300 other your company but it must be customers just like them — that tied to the merchandising and insight would be a big win. marketing teams directly.” Because High Performance Retailing For example, when kicking analysis can be completed so off a loyalty program, the quickly, ideas can be tested easily marketing team should work and often without the risk of with the finance team to analyze damaging the business or bringing customer credit card data. IT to its knees. For example, High Typically credit card operations Performance Retailing analysis can are completely separate from uncover cross-sell items that are marketing. “It is a great way to not necessarily intuitive. This opens understand your customer base up a whole new set of ideas and before launching a major loyalty potential for creating new ideas — it program,” said Williams. is a different way of talking about high performance. ►► 15
  • 16. If business units continue to operate independently, merchants will never truly understand the consumer in the marketplace. Eliminating Data Silos across merchandising, supply chain and store operations, for example. This leading grocer is empowered to make Most importantly, companies need to eliminate the better decisions at store level. They engage their customers, silos where they store some data for sales, other for and grow and retain customers over the long haul. Science merchandising, and more for promotions/planning. If these powers their company goal of delighting customers. business units continue to operate independently, merchants By keeping customers at the center, at their focus, this will never truly understand the consumer in the marketplace. organization continues to succeed. A major grocery chain in North America has embraced this concept throughout the chain, which serves customers with a wide range of regional differences and brand strategies. This organization makes sure their pricing and promotion optimization engines are linked with their shopper insight foundation. Rather than looking at the science of price optimization in isolation, this leading retailer can make strategic, holistic and more informed pricing decisions for their valued customers in a wide range of markets. Additionally, this retailer uses SAS as a strategic provider for integrated retail analytics. Their customer and other data is all collected and analyzed in one location and this company has a holistic view throughout the operation — ►► 16
  • 17. The bottom line is that High Performance Retailing puts better and faster analytics in the hands of merchants, for better insights and speed to market. Conclusion In today’s fast-changing retail environment, retail and The combination of SAS domain expertise, high performance CPG companies must react just as quickly in order to stay computing capabilities and analytics’ experience creates competitive. While optimization, planning and analytics have the new realm of High Performance Retailing. With High been important components of the retail equation, they Performance Retailing, merchants can collect, analyze become significantly more powerful when fueled by high and make decisions in warp speed, in the “retail moment performance computing. of truth” — as consumers are standing in the aisle, are at their online shopping carts checking out, or are conducting product research online. The highly advanced High Performance Retailing solutions recommend new cross- sell and upsell combinations that intuition alone could not match. And, by effectively analyzing all offers across all channels, High Performance Retailing can help companies avoid shopper offer fatigue — saving current and future sales. The bottom line is that High Performance Retailing puts better and faster analytics in the hands of merchants, for better insights and speed to market. Without it, retail companies will pay the cost of not reacting fast enough in today’s environment. ►► 17
  • 18. About SAS SAS helps retailers and grocers spend less time crunching numbers and more time growing revenue with key technologies customized for today’s multichannel World Headquarters merchants. Built around a powerful core of market-leading business analytics, our SAS Institute Inc. comprehensive suite of retail solutions tackles the industry’s greatest challenges, 100 SAS Campus Drive Cary, NC 27513-2414, USA including customer insight (customer intelligence and social media analytics); price P: 919.677.8000 optimization (regular, promotion and markdown); size optimization (size profiling and F: 919.677.4444 pack optimization); assortment planning; integrated merchandise planning (allocation, space management and optimization); forecasting (across the enterprise and across market segments); and loss prevention. With more than 35 years of experience working with leading grocers and retailers, SAS helps retailers make better decisions faster. Learn more at www.sas.com/retail. About Retail TouchPoints 411 State Route 17 South Suite 410 Retail TouchPoints is an online publishing network for retail executives, with content Hasbrouck Heights, NJ 07604 focused on optimizing the customer experience across all channels. Tapping into the P: 201.257.8528 power of the Web 2.0 environment, the Retail TouchPoints network is made up of F: 201.426.0181 a weekly e-newsletter, category-specific blogs, twice monthly Special Reports, web seminars, benchmark research, virtual events, and a content-rich web site at www.retailtouchpoints.com. ►► 18