Business Analytics. David Morton IBM Corporation

Transcription

1 Business Analytics David Morton Business Analytics 2008 IBM Corporation

2 Smart Decisions i are made when Everyone Can Answer How are we doing? Why? What should we be doing? 2

3 How are we doing? How are we doing? Why? How are we doing? Why? What should we be doing? What should we be doing? 3

4 FINANCE MARKETING MERCHANDISING How are we doing? Why? STORES & CHANNELS What should we be doing? SUPPLY CHAIN CUSTOMER MANAGEMENT HR IT 4

5 FINANCE MARKETING MERCHANDISING Measuring & Monitoring Reporting & Analysis STORES & CHANNELS Planning SUPPLY CHAIN CUSTOMER MANAGEMENT HR IT 5

6 Retailer need to offer differentiated merchandise, while being profitable, flexible and efficient in an environment of accelerating market shifts Result in challenges that tactical solutions alone will NOT resolve 6

7 Analytics & Performance Management Solutions Retail Industry Blueprints Assortment Planning Blueprint Top-down / bottom-up pre- and in-season planning Product Profitability Blueprint DPP integrating all direct and indirect costs Visualising profitability by product attributes SCOR (Supply Chain Operations Reference model) Metrics Blueprint Metrics monitoring performance throughout the supply chain Store Development Blueprint Property divestitures, store / comp mgmt, attributes New stores, upgrades, remodels Financial Workbench & Scorecard Blueprint Coordinate planning and measurement across the chain Financial Merchandise Planning Blueprint Revenue, gross margin, stock planning Promotion Planning Blueprint Marketing spend, campaigns, vendor trade fund compliance Store P&L Operations Blueprint Revenue, 7 labour, controllable expenses, initiatives Market Basket Analysis (SPSS) 7

8 Retail Industry Blueprints Store Operations Planning Assortment Planning Market Basket Analysis RETAIL 8

9 Store Operations Planning Connect silos (corporate, operations, merchandising) Model financial impact of business options Simplify planning process by providing standards, profiles and easy to use templates and workflow Manage functional area input and buy-in process Speed consolidation Increase participation, visibility and accountability 9

10 Define Revenue Baseline 10

11 Define Revenue Baseline 11

12 Define Revenue Baseline 12

13 Define Revenue Baseline 13

14 Define Revenue Baseline 14

15 Add Store Inititiaves 15

16 Add Store Inititiaves 16

17 Weekly Revenue 17

18 Retail Store Operations 18

19 Provide Unique Merchandise / Services to Consumers Merchandise Planning Defined: Merchandising objectives: develop a differentiated assortment make smart buys and protect profits The process that defines the understand merchandise performance resources required to meet / trends and respond to changing particular company sales, margin market factors quickly and inventory objectives for a model scenarios and understand specific season or period. financial impact of business decisions manage stock levels 19

20 Flow Chart 20

21 Set Assumptions and Review Corporate Guidelines for Financial Metrics 21

22 Complete Top-down Target Setting 22

23 Develop Item-level Plans by Merchandise Type 23

24 Achieve Consensus: Understand variances and reconcile top-down and bottom-up plans 24

25 Market Basket Analysis The Opportunity for Retailers Retail operations generate huge amounts of transactional information ( Loyalty cards, POS info, online shopping et) Customer buying patterns obscure and impossible to detect by manual inspection Insight into patterns ensure the products promotions match shopper preferences and give maximum return on their marketing spend. 25

26 Business Scenario: Retail Market Basket Analysis Market basket insights If A then B If C then D If E and F then G If H, then H then I Transactions from all customers 26

27 Business Scenario: Retail Market Basket Analysis Promotional Display Buy X get Z for only $1.49! Market basket insights If A then B If C then D If E and F then G If H, then H then I Transactions from all customers 27

28 Business Scenario: Retail Market Basket Analysis Promotional Display Buy X get Z for only $1.49! Special Offer This Week Only 10% off on any of these combinations: A + B G + H. Market basket insights If A then B If C then D If E and F then G If H, then H then I Transactions from all customers 28

29 Business Scenario: Retail Market Basket Analysis Promotional Display Buy X get Z for only $1.49! Special Offer This Week Only 10% off on any of these combinations: A + B G + H. Market basket insights If A then B If C then D If E and F then G If H, then H then I Transactions from all customers 29

30 Business Scenario: Retail Market Basket Analysis Promotional Display Buy X get Z for only $1.49! Special Offer This Week Only 10% off on any of these combinations: A + B G + H. Market basket insights If A then B If C then D If E and F then G If H, then H then I Transactions from all customers Offers Statement insert???? Gillette razors L Oreal shampoo House brand shampoo House brand hair color Colgate toothpaste Nivea skin care Men s fragrance Woman s fragrance House brand sun care Optician Feminine hygiene Online photo service Family yplanning Pampers diapers House brand diapers 30

31 Business Scenario: Retail Market Basket Analysis Promotional Display Buy X get Z for only $1.49! Special Offer This Week Only 10% off on any of these combinations: A + B G + H. Market basket insights If A then B If C then D If E and F then G If H, then H then I Transactions from all customers Statement insert???? Offers 1 Gillette razors 2 L Oreal shampoo 3 House brand shampoo 4 House brand hair color 5 Colgate toothpaste 6 Nivea skin care 7 Men s fragrance 8 Woman s fragrance 9 House brand sun care 10 Optician 11 Feminine hygiene 12 Online photo service 13 Family yplanning 14 Pampers diapers 15 House brand diapers Transactions from this customer Cardholder since YYYYMM Average transaction ti value Monthly transaction value Categories purchased Brands purchased Descriptive Age Gender Family situation Zip code Interactions Web registration Web visits Customer service contacts Channel preference Attitudes Satisfaction scores Shopper type Eco score 31

32 Business Scenario: Retail Market Basket Analysis Promotional Display Buy X get Z for only $1.49! Special Offer This Week Only 10% off on any of these combinations: A + B G + H. Market basket insights If A then B If C then D If E and F then G If H, then H then I Transactions from all customers Statement insert???? Offers 1 Gillette razors 2 L Oreal shampoo 3 House brand shampoo 4 House brand hair color 5 Colgate toothpaste 6 Nivea skin care 7 Men s fragrance 8 Woman s fragrance 9 House brand sun care 10 Optician 11 Feminine hygiene 12 Online photo service 13 Family yplanning 14 Pampers diapers 15 House brand diapers Transactions from this customer Cardholder since YYYYMM Average transaction ti value Monthly transaction value Categories purchased Brands purchased Descriptive Age Gender Family situation Zip code Interactions Web registration Web visits Customer service contacts Channel preference Attitudes Satisfaction scores Shopper type Eco score 32

33 Business Scenario: Retail Market Basket Analysis Promotional Display Buy X get Z for only $1.49! Special Offer This Week Only 10% off on any of these combinations: A + B G + H. Market basket insights If A then B If C then D If E and F then G If H, then H then I Transactions from all customers Offers Transactions from this 1 Gillette razors customer Statement Cardholder since YYYYMM insert 2 L Oreal shampoo Average transaction ti value House brand shampoo Monthly transaction value Categories purchased House brand hair color Brands purchased 5 Colgate toothpaste Descriptive 6 Nivea skin care Age Gender 7 Men s fragrance Family situation Zip code 8 Woman s fragrance 9 House brand sun care Interactions Web registration 10 Optician Web visits 11 Feminine hygiene Customer service contacts Channel preference 12 Online photo service Family yplanning Pampers diapers House brand diapers Attitudes Satisfaction scores Shopper type Eco score 33

34 Business Scenario: Retail Market Basket Analysis Promotional Display Buy X get Z for only $1.49! Special Offer This Week Only 10% off on any of these combinations: A + B G + H. Market basket insights If A then B If C then D If E and F then G If H, then H then I Transactions from all customers Offers Transactions from this 1 Gillette razors customer Statement Cardholder since YYYYMM insert 2 L Oreal shampoo Average transaction ti value House brand shampoo Monthly transaction value Categories purchased House brand hair color Brands purchased 5 Colgate toothpaste Descriptive 6 Nivea skin care Age Gender 7 Men s fragrance Family situation Zip code 8 Woman s fragrance 9 House brand sun care Interactions Web registration 10 Optician Web visits 11 Feminine hygiene Customer service contacts Channel preference 12 Online photo service Family yplanning Pampers diapers House brand diapers Attitudes Satisfaction scores Shopper type Eco score 34

35 Business Scenario: Retail Market Basket Analysis Promotional Display Buy X get Z for only $1.49! Special Offer This Week Only 10% off on any of these combinations: A + B G + H. Market basket insights If A then B If C then D If E and F then G If H, then H then I Transactions from all customers Statement insert Statement insert???? Offers 1 Gillette razors 2 L Oreal shampoo 3 House brand shampoo 4 House brand hair color 5 Colgate toothpaste 6 Nivea skin care 7 Men s fragrance 8 Woman s fragrance 9 House brand sun care 10 Optician 11 Feminine hygiene 12 Online photo service 13 Family yplanning 14 Pampers diapers 15 House brand diapers Transactions from this customer Cardholder since YYYYMM Average transaction ti value Monthly transaction value Categories purchased Brands purchased Descriptive Age Gender Family situation Zip code Interactions Web registration Web visits Customer service contacts Channel preference Attitudes Satisfaction scores Shopper type Eco score 35

36 Business Scenario: Retail Market Basket Analysis Promotional Display Buy X get Z for only $1.49! Special Offer This Week Only 10% off on any of these combinations: A + B G + H. Market basket insights If A then B If C then D If E and F then G If H, then H then I Transactions from all customers Statement insert Statement insert 12? 15? 11?? 3 Offers 1 Gillette razors 2 L Oreal shampoo 3 House brand shampoo 4 House brand hair color 5 Colgate toothpaste 6 Nivea skin care 7 Men s fragrance 8 Woman s fragrance 9 House brand sun care 10 Optician 11 Feminine hygiene 12 Online photo service 13 Family yplanning 14 Pampers diapers 15 House brand diapers Transactions from this customer Cardholder since YYYYMM Average transaction ti value Monthly transaction value Categories purchased Brands purchased Descriptive Age Gender Family situation Zip code Interactions Web registration Web visits Customer service contacts Channel preference Attitudes Satisfaction scores Shopper type Eco score 36

37 Business Scenario: Retail Market Basket Analysis Promotional Display Buy X get Z for only $1.49! Special Offer This Week Only 10% off on any of these combinations: A + B G + H. Market basket insights If A then B If C then D If E and F then G If H, then H then I Transactions from all Statement insert Statement insert 12? 15? 11?? 3 Offers 1 Gillette razors 2 L Oreal shampoo 3 House brand shampoo 4 House brand hair color 5 Colgate toothpaste 6 Nivea skin care 7 Men s fragrance 8 Woman s fragrance 9 House brand sun care 10 Optician 11 Feminine hygiene 12 Online photo service 13 Family yplanning 14 Pampers diapers 15 House brand diapers Transactions from this customer Cardholder since YYYYMM Average transaction ti value Monthly transaction value Categories purchased Brands purchased Descriptive Age Gender Family situation Zip code Interactions Web registration Web visits Customer service contacts Channel preference Attitudes Satisfaction scores Shopper type Eco score 37

38 Retail Industry Blueprints Assortment Planning Store Operations Planning Market Basket Analysis RETAIL 38

39 Analytics & Performance Management Solutions Retail Industry Blueprints Assortment Planning Blueprint Top-down / bottom-up pre- and in-season planning Product Profitability Blueprint DPP integrating all direct and indirect costs Visualising profitability by product attributes SCOR (Supply Chain Operations Reference model) Metrics Blueprint Metrics monitoring performance throughout the supply chain Store Development Blueprint Property divestitures, store / comp mgmt, attributes New stores, upgrades, remodels Financial Workbench & Scorecard Blueprint Coordinate planning and measurement across the chain Financial Merchandise Planning Blueprint Revenue, gross margin, stock planning Promotion Planning Blueprint Marketing spend, campaigns, vendor trade fund compliance Store P&L Operations Blueprint Revenue, 39 labour, controllable expenses, initiatives Market Basket Analysis (SPSS) 39

40 Deliver a smarter operations Quiznos needed a solution o that would help the company standardize, integrate, consolidate and simplofy the financial reporting and planning processes across all of it s business around the world. Reduced monthly closing cycle by two days and annual planning process by 5 weeks. 40

41 Deliver a smarter merchandising and supply chain Global high fashion brand needed to gain greater visibility into customer buying habits, merchandising, and supply chain to make better use of information and become more responsive to customer needs. Boosted sales by more than 10 percent, while cutting operating costs. Elie Tahari have save several millions of dollars annually and has paid for itself many times over. 41

42 Useful contact Information IBM Cognos Web site IBM Cognos Innovation Center David Morton 42

43 Copyright IBM Corporation 2008 All rights reserved. The information contained in these materials is provided for informational purposes only, and is provided AS IS without warranty of any kind, express or implied. IBM shall not be responsible for any damages arising out of the use of, or otherwise related to, these materials. Nothing contained in these materials is intended to, nor shall have the effect of, creating any warranties or representations from IBM or its suppliers or licensors, or altering the terms and conditions of the applicable license agreement governing the use of IBM software. References in these materials to IBM products, programs, or services do not imply that they will be available in all countries in which IBM operates. Product release dates and/or capabilities referenced in these materials may change at any time at IBM s sole discretion based on market opportunities or other factors, and are not intended to be a commitment to future product or feature availability in any way. IBM, the IBM logo, Cognos, the Cognos logo, and other IBM products and services are trademarks of the International Business Machines Corporation, in the United States, other countries or both. Other company, product, or service names may be trademarks or service marks of others. 43