Affinity Insight 2.0 for Retail

SAP Performance and Insight Optimization

February 2012

© 2011 SAP AG. All rights reserved. 2 Public

Customer‘s Voice

Affinity Insight … allowed interrogation of our data

across a number of stores and categories providing

affinity insight, some interesting, some obvious, some

counter intuitive and some potentially highly lucrative

and attractive. Projected savings and benefits showed

relatively short payback in a matter of months rather

than years …

Colin McLean - Chief Operating Officer, Scotmid Group

“

“

© 2011 SAP AG. All rights reserved. 3 Public

What if…

Analyzing customer behavior on market basket level can improve

business decisions in various areas

Effective

promotions

…you had full insight to

buying behavior on market

basket level?

Rationalized

assortment

Optimized store

layout

© 2011 SAP AG. All rights reserved. 4 Public

The Challenge

How to analyze sales on the level that

matters most – the customer level?

Only aggregated data available

Lack of statistical functionality

Performance problems due to huge data sets

Most reporting environments irreversibly destroy valuable information by

aggregating sales transactions to daily or weekly level

© 2011 SAP AG. All rights reserved. 5 Public

Solution Scope

Affinity Analysis 2.0 is a tool for sales

analysis on market basket level

Ad-hoc calculation of many different

market basket KPIs

Maximum flexibility for analysis in product

and store hierarchies

Intuitive user interface

High performance computations powered

by SAP In-memory technology

Affinity Insight 2.0 allows flexible computations on market basket level

© 2011 SAP AG. All rights reserved. 6 Public

Analysis Example 1

Electronics retailer

Interested in effects of a digital cameras

promotion on sales of other products

Discover the true financial impact of drag-along effects

Affinity Insight might show:

Every third customer who purchases a digital camera

also buys a spare battery

This was true in the past, independent of whether digital

cameras were on promotion or not

Conclusion

A promotion on digital cameras will also increase battery

sales by an amount that can be well estimated

© 2011 SAP AG. All rights reserved. 7 Public

Analysis Example 2

Drug store chain

Wants to define a new minimum assortment for all their stores

Approach: Mainly driven by lists of “top seller” items

Understand better how certain products indirectly contribute to your sales

across the whole assortment

Affinity Insight might show:

Certain premium products don’t have a strong direct

contribution to over-all sales and profit, but they are

often bought together with other high-value items in

very profitable market baskets

Conclusion

Reducing the assortment without taking into account the

market basket view may put business with the most

profitable customers at risk

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Analysis Example 3

Do-it-yourself store chain

Considering a major change in store layouts

Get indications on how shoppers move through your store

Affinity Insight might show:

Certain departments are represented together in the

same market baskets more often than others

The products in some departments tend to be

purchased alone or in small baskets

Conclusion

This information may be used to allow customers shorter,

more convenient ways through the store, or guide them on

ways that improve drag-along sales

© 2011 SAP AG. All rights reserved. 9 Public

Affinity Insight 2.0 – Solution Architecture

SAP Business Objects Dashboards

User-friendly front ends

PIO Statistics Functionality

Java web service and SQL algorithms

SAP HANA

In-memory data base filled with POS data

SAP HANA brings a new level of speed and detail to your analyses

SAP HANA

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Advanced Analytics Portfolio

Affinity Insight 2.0 is part of a broad portfolio of standardized and tailored

advanced analytics solutions

Demand Model

(location, seasonality, price, promotions…)

Transaction Log Data Master Data Inventory Data

Affinity Insight

Performance Forecasting & Monitoring

Assortment

Insight &

Rationalization

Size

Optimization

Zone

Optimization

Key Value

Drivers

Markdown

Optimization

Price

Optimization

Marketing

Optimization

Trial

Management

…

© 2011 SAP AG. All rights reserved. 11 Public

Your Benefits

Discover new facts about your customers with Affinity Insight 2.0 !

Business-relevant information that is not

accessible with most reporting tools

Computation of various metrics on

market basket level

Maximum flexibility to drill down in

product and store hierarchies

Real-time computations on huge data

sets with SAP In-memory technology

Extension to other analytics services on

the same technical platform

Thank You!

Contact information:

Dr. Helmut Linde Head of Science and Technology EMEA

SAP Performance and Insight Optimization

Helmut.Linde@sap.com

+49 160 908 222 41