embrace analytics to dramatically improve retail performance
TRANSCRIPT
Welcome!
Todd HarrisDirector of Marketing
@ Celect
Vivek FariasCTO, Co-founder
@ Celect
Paul SchottmillerPartner, Retail and
Consumer Goods @ KSA
© 2016 Celect, Inc. All Rights Reserved.
An Intro to Celect
• Who we are‒ Predictive analytics (SaaS) platform focused
on the retail sector‒ Based in Boston, MA‒ Venture-backed, award winning technology
out of MIT
• Awards & Recognitions‒ MIT Computer Science and Artificial
Intelligence (CSAIL) Top 50 Greatest Innovations
© 2016 Celect, Inc. All Rights Reserved.
Kurt Salmon’s Analytics Services help clients infuse analytics to transform business processes with actionable insights that
solve hard problems and unlock new opportunities across the consumer goods value chain.
Unparalleled insights delivered to retail and consumer companies with a heritage of thought leadership
Expertise across the value chain, from growth strategy to execution
Global consumer and retail industry practice with consultants across three continents
Over 80 years of delivering performance enhancing strategies
Specialized.
Integrated.
Proven.
Global.
An Intro to Kurt Salmon
© 2016 Celect, Inc. All Rights Reserved.
Emerging tech + analytics
• Volume, Velocity, Variety
• Connectivity - Moore + Metcalf + Cloud
• AI
• Machine Learning
The opportunity …
• Precision
• Personalization
• Prediction
• Automation
Challenge is the same
• Right product
• Right place
• Right time
• Right price
A Transformed Competitive Landscape
Gartner predicts that by 2020, more than 75 percent of organizations will deploy advanced analytics as part of a platform or analytics application to improve business
decision-making. Companies are accelerating the shift in focus of their investments from measurement to analysis, forecasting and optimization.
© 2016 Celect, Inc. All Rights Reserved.
Operational and Financial Performance
Forecasting
Consumer Insights
Merchandising, Planning, and Buying
Product Design & Development Sourcing Distribution & Logistics Channel Operations
Marketing/Promotion
Physical Flow
Data Driven Decision Making –5 Key Areas
Create/Buy More WinnersSample Less
Shorten Leadtimes
Sell MoreMarkdown LessIncrease Loyalty
Next Generation Performance
Reduce CostsAutomate Decisions
Increase Operating Margin
Allocation, Replenishment, Flow
Precision, Prediction, Personalization, Automation
© 2016 Celect, Inc. All Rights Reserved.
Tough Problems, New Opportunities
› Store replenishment
› Speed of delivery vs. shipping cost
› Fulfillment leveraging all channels
› Localization
› Winners vs. losers› Optimal store
assortment
Marketing & Consumer Insights
Product Development & Merchandising
Sourcing &Supply Chain
Channels
› Customer’s lifetime value
› Customer’s profitability
› Optimize marketing / media spend
› Potential out of stocks
› Traffic by channel and location
› Personalized interactions
© 2016 Celect, Inc. All Rights Reserved.
Effectiveness
Revenue: 7-12% increaseGross Margin : 6-8% increaseTime to Market: 30-40% decrease
Efficiency
SG&A: 5-15% decrease
How Big is the Opportunity?
Operating Margin: 25-40% increase
Precision, Prediction, Personalization Automation
© 2016 Celect, Inc. All Rights Reserved.
Innovating Requires a Business Value Focus
• Business value driven vs. technology driven• Test and learn approach
‒ Speed wins‒ Failure IS an option‒ Tinkering is good‒ This is not ERP
• Data quality is critical• Cross organizational sponsorship is required
Shiny Objects
© 2016 Celect, Inc. All Rights Reserved.
Predictive AnalyticsUsing Context & Choice to Understand True Demand
© 2016 Celect, Inc. All Rights Reserved.
Context is Everywhere
© 2016 Celect, Inc. All Rights Reserved.
Context highlights answers …
… and context is everywhere in your data.
© 2016 Celect, Inc. All Rights Reserved.
A Choice Model tells you what a customer would prefer to buy when
given the choice.
Today, you only know what a customer bought
Understand True Demand
• We sold out of a particular product in Store 28 à What was the right allocation?
• We have never sold a particular product in Store 58 à How well would it sell there?
• We are looking to add a new brand in to a set of stores à What impact will that have on store sales?
Example: Traditional Store Clustering
© 2016 Celect, Inc. All Rights Reserved.
Cluster 4
Cluster 1 Cluster 2 Cluster 3
Cluster 5
What Is The Operational Value of This?
Clustering and Assortments via Choice Modeling
• Build representative customer choice models for every store• Cluster stores based on choice
‒ Limited number of localized assortments = Easier Ops‒ Easy to interpret from an operational perspective
• Optimize assortments to a cluster
© 2016 Celect, Inc. All Rights Reserved.
Celect gives you insight into true demand.