analytics in retail for strategic growth - sas · analytics in retail for strategic growth ......
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Analytics in Retail for Strategic GrowthLori Schafer Executive Advisor, SAS Retail
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Copyright SAS Inst itute Inc. A l l r ights reserved.
SAS FORUMRUSSIA 2017
Understanding the New Consumer
Personal consumption is up, but retail sales remain sluggish (lowest since recession of 2008 N. America)
Conspicuous consumption to conscious consumption
Shoppers spending more on experiences and less on products
Consumers, especially Milennials, see experiences as building longer-term memories than products
A major shift is happening in the way people shop
and what they want to buy
PresenterPresentation NotesA major shift is happening in the way people shop and what they want to buy!
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SAS FORUMRUSSIA 2017
Understanding Milennial / Gen-Z Shopping Habits
16 36 years old
Most tech saavygeneration
WantDiscounts
Personalization& In-Store Experience
unimpressedby marketing or
advertising
Gather opinions on social media
before decision
Prefer spending on
experiences over tangible goods
In 2020, will represent 30%
of all sales; $1.4 Trillion in U.S.
Rent vs.OwnIndividualism
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SAS FORUMRUSSIA 2017
Competitive Landscape
Strong Web presence now the price of entry into retail
Omni-Channel capabilities are an expectation
One-stop shops like Amazon, Target and Walmart will continue to dominate
Traditional malls will become a thing of the past
Pop-up shops and showrooms will emerge as an appealing alternative
Fast fashion retailers will continue to build their competitive presence
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SAS FORUMRUSSIA 2017
Priorities of the Retail CEO
We need to be more agile in responding to our customers needs online and in store
David Jaffe, CEO of Ascena Retail Group
We have seen a drastic reduction in the amount of people physically visiting the store. Theres so much competition online, I am constantly thinking of new marketing techniques to get people to shop in my store
CEO, Apparel & Accessories Retailer
We need to enhance our in-store experience and Internet/Home delivery, offering state-of-the -art digital tools
CEO,Top 5 Grocery Retailer
Improving technology to grow the linkage between the Internet & the Store to enhance the customer experience is our top goal
Jerry Storch, CEO, Hudsons Bay
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SAS FORUMRUSSIA 2017
PresenterPresentation NotesIt all start with good dataIn a true Omnichannel experience, we must understand how the customer engagesthrough any and all channelsSAS Omnichannel Analytics brings together all the data for how consumers engage with the retailerData is cleansed and harmonized to provide a single view of the customer journey
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SAS FORUMRUSSIA 2017
Out of the Backroom.into the Boardroom Enabling the CEO Agenda for Change
Its all about shareholder value!
Adding Top Line Growth Through Predictive Analytics
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SAS FORUMRUSSIA 2017
Focus on the right customersWhich customers should you target for the ideal customer lifetime value?
Offer the right assortmentsBased on online and in-store sales, are the right products available to the trade area and are they profitable?
Cover DemandEnough inventory to cover demand?
Efficient StoresIs your Energy usage, Staff and Equipment performing at their best ?Personalize Customer Experience
What is the best tuned path to purchase for each and every visitor ?
Protect your businessWith the vast number of returns, transactions, purchase orders and network connections, how do you determine what is legitimate?
Analyze for opportunitiesHow do we detect, discover and determine the root cause of issues effecting your business?
PresenterPresentation NotesRetail is facing its most revolutionary period. The potential of the Data retailers have and can get is Phenomenal .Analytics is the enabler for Retail to be successful with all of its new technology opportunity as well as the new engagement model that the customers and consumers demand.
SAS has recognised that as Retailers reorganise themselves to stay competitive and profitable - Omnichannel Analytics are required to best serve the Customers with the most relevant and timely message- and equally to enable the commercial decision making across the organisation to ensure Sales and Profits can grow.
As the diagram depicts the Customer moves central to the whole organisation , and what were once channels become Communication routes to the customer.Often one single customer might use 3 or 4 of these communication routes in one shopping mission with the retailer- Challenging for the retailer in terms of Content and efficiency,
How often of you found yourself using a retailers web shop to try to see if the product you want is in a store near you ? A recent Survey told us that only 15% of Retailers In the UK have visibility of the assortment at a store level and not all of these have a read of live stock massive opportunity to satisfy more customers.
Our Customers find themselves exposed ,in situations such as major Marketing campaigns For example : where that Dress featured on Bus Shelters in every city and on landing pages of the web shop never quite got planned as that kind of featured product by Merchandising - and Supply chain scrabbling to Fulfill orders.
These situations arise because the Data is often in silos , marketing separate from merchandising and supply chain.
Omnichannel Analytics facilitates bringing this data together and even allowing users to model the possible outcomes of situations in order to future proof their decisions- - That Dress thats now in short supply and availability- Should I consolidate stock to limited outlets , online only ? When it comes back to stock where should we put it for maximum Sales and Profitability?
Omnichannel Demand is a key strength of SAS Our ability to Model and Forecast the signals of demand is perfect for the complexity that retailers now face. Where in the past the strongest demand signal was in the store at fillpoint or at the empty fixture or shelf its now shifted to be a complex layering of signals across these communication channels What if you could use Browsing behaviour form your webshop as a signal of demand ?
Lets delve into the Kind of Business challenges that SAS is resolving in each business function:
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SAS FORUMRUSSIA 2017
PresenterPresentation NotesSAS Viya Open Platform supporting the Analytics lifecycle from data discovery to deployment
Cloud Analytics is are Software and Results as a service strategy
We are embedding AI into the entire portfolio to further enhance analytic capabilites.
The wide range of IOT data becoming available is only valuable when retailers can act upon it in the right manner and timely fashion.
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SAS FORUMRUSSIA 2017
Assortment Planning tied to Allocation 17% Inventory Savings (2016 Financials) 24% increase in EBIT Over 1,2M to reinvest in the business
without any additional inventory
Size / Case Pack Optimization 1% reduction in stock outs 30bps (.3pp) increase GM 70bps (10% gain) in pre-tax Profit 10% flow through to pre-tax profit
Price Optimization 310 bps (3.1pp) gain in GM 91% increase in annual pre-tax profit 5.0pp increase in EBIT
Promotion Optimization / Demand Forecasting 10-30% inventory reduction 2-5% revenue increase 5-20% increase in product availability10-50% improvement in forecast accuracy
Case Studies
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SAS FORUMRUSSIA 2017
Assortment Planning, Optimization& Inventory Allocation
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Copyright SAS Inst itute Inc. A l l r ights reserved.
SAS FORUMRUSSIA 2017
Vertically Integrated Retailer; 295B in revenue, 5,000 stores globally
International Specialty Retailer
Increased Revenue and Profitability- Better targeted assortments with clusters
- Higher average sales and profitability
Reduced Inventory Cost- Unique store inventory plans based on actual facings
- Tighter managed product life-cycle (discontinued)
- Eliminated duplicate stock with substitute/replacement
Increased Productivity- Translating Assortment Plans into Vendor Forecasts/Purchase Orders
- Consistent tools and business processes across divisions
- Automation allowing for lower level decisions/execution
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Copyright SAS Inst itute Inc. A l l r ights reserved.
SAS FORUMRUSSIA 2017
Sample Income Statement Using Actual Retailers ResultsRubles (RUB) % of Sales
Net Sales 290,000,000,000Gross Margin 130,500,000,000 45.0%Inventory @ Retail 72,500,000,000 25.0%Inventory @ Cost 36,250,000,000 12.5%Inventory Reduction (17% reduction) 6,162,500,000 2.5%
EBIT 29,000,000,000 10%
Sales Improvement 8,700,000,000 3%GM Resulting from Sales Increase 3,886,000,000 45%GM Improvement 2,900,000,000 1.3%Increase in EBIT 6,960,000,000 24%
Planning / Forecasting / Allocation Value PropositionAssumptions: IMU of 50%, GM of 45%, Average Turnover: 4
Yields 6,162,500M Redeployment of $ Assets to New Store Openings
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SAS FORUMRUSSIA 2017
Demand Forecasting
PresenterPresentation NotesDemand Forecasting
10-30% inventory reduction2-5% revenue increase5-20% increase in product availability 10-50% improvement in forecast accuracy Improved customer satisfactionSignificant time savings.
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SAS FORUMRUSSIA 2017
Before Store Forecasting reacts to
events, does not predict them 50% of short life
line/store/day forecasts more than case different from actual
Warehouse forecasts inconsistent with store forecasts
Use increased stock during promotions to overcome uncertainty in demand
Forecast Accuracy too low
Out-of-stocks / over-stocks during promotions and weeks following
Over-spending on promotions / price-cuts
Increased waste on fresh foods
Lost sales and customer dissatisfaction
Lower productivity
PresenterPresentation NotesGrocery Chain (184 stores, $5.8B sales, 25,000 sku/store)Goal: improve performance during promotional periods, especially in prepared foodsBusiness ProblemOut-of-stocks / over-stocks during promotions and weeks followingOver-spending on promotions / price-cutsSignificant loss of MarginTechnical ProblemForecast accuracy needed to improveForecast models need to be created for 4,500,000+ SKU-Stores. Forecasts need to be updated weeklyThere are a number of problems with this set up The forecasting does not spot events and only reacts to them afterwardsThe forecasting is not very accurate (for example in short life goods for store forecasting, half of our forecasts are wrong by more than half a case causing wastage or shrinkage and affecting availabilityThere is no link between the forecasting taking place for our stores and that taking place for our warehousesTo cope with uncertainty around one of our key events we put excess stock through the supply chain to provide a buffer.
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Copyright SAS Inst itute Inc. A l l r ights reserved.
SAS FORUMRUSSIA 2017
After.promotions several sample itemsJohn West Tuna
010
2030
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21/12
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28/12
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25/01
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demand Old System New System
New SAS Forecasting system Predicts the start of the promotion
Lemon Juice
0102030405060708090
12/21
/2005
12/28
/2005
1/4/20
06
1/11/2
006
1/18/2
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1/25/2
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2/1/20
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2/8/20
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2/15/2
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2/22/2
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3/1/20
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3/8/20
06
demand New System Old System
New SAS Forecasting system Predicts the start of the event
Old promotional systemdoes not spot the event
PresenterPresentation Notes we have added a red line to indicate the forecasts for the new system. AS you can see, although the forecasts are not perfect (and never will be) the system does much better at predicting the start of the promotion.
Chart2
62.988387072.6884394403
34.229387083.8215235985
83.89387094.2660659233
23.918387105.8822936245
05.666387110.0701294304
04.567387120.0326259487
52.932387134.53361974
32.988387143.3769114008
44.229387154.3060114347
43.89387164.9560719748
43.918387176.0565522509
05.66610
54.567387193.7490422453
72.932387204.2321381095
92.988387213.1943399493
34.229387224.1483741865
43.89387234.8985778227
53.918387246.1511417192
56.464387254.9975462739
45.639387264.2357476418
33.789387274.7357801765
33.978387283.6614506524
45.468387294.6453224703
84.772387305.2890160968
64.686387316.1851534414
15.614387324.4637917612
14.412387333.8788159689
23.181387344.6273031588
03.721387353.6481424562
24.111387364.3338216158
35.005387374.7154605615
44.439387385.4387778479
63.119387393.9463842486
22.471387403.0882553013
31.74387413.4720311902
11.095387422.5951416435
72.412387433.5245906537
43.929387444.0133428777
64.273387454.8980929565
33.74387463.2269325152
32.388387473.0508303465
12.988387483.5294736981
11.38387492.8336387652
14.664387503.5375770113
44.788387514.1485877413
65.395387524.808688874
54.203387533.1782816552
182.1683875425.568203969
241.763875529.229634412
240.923875625.099754005
153.0883875731.614476936
475.5793875833.89502673
4811.3063875932.304800142
2410.8923876028.626640123
3015.663876122.952836878
1514.0113876228.952902378
139.7873876323.632733018
2215.4933876428.581702598
1520.4223876532.825710663
4328.8033876636.600028035
2820.5393876724.608261125
1426.3933876821.764107848
2020.7473876921.867792945
1313.4883877017.664588496
2019.9763877124.317798245
1823.1523877229.038408295
3431.8163877337.963588576
2023.0173877431.214230938
2423.3723877529.261589527
2121.1253877634.43028481
2215.33877715.97073637
1418.53877818.3652076
2718.73877920.79336814
3433.73878023.20271278
19233878118.67043431
221.4387821.882157562
020.5387832.4153835
215.3387842.106368299
22.7387852.833227761
33.8387863.4141539
demand
Old System
Offsale Ind
New System
John West Tuna
213 20587
branchnumlinenumLONGNAMECASE_SIZECASE_SIZE_UOMdatedemandNew SystemOld SystemOffsale Ind
21320587John West tuna chunks in brine 4x185g12U12/21/0562.68843944032.988
21320587John West tuna chunks in brine 4x185g12U12/22/0533.82152359854.229
21320587John West tuna chunks in brine 4x185g12U12/23/0584.26606592333.89
21320587John West tuna chunks in brine 4x185g12U12/24/0525.88229362453.918
21320587John West tuna chunks in brine 4x185g12U12/25/0500.07012943045.666
21320587John West tuna chunks in brine 4x185g12U12/26/0500.03262594874.567
21320587John West tuna chunks in brine 4x185g12U12/27/0554.533619742.932
21320587John West tuna chunks in brine 4x185g12U12/28/0533.37691140082.988
21320587John West tuna chunks in brine 4x185g12U12/29/0544.30601143474.229
21320587John West tuna chunks in brine 4x185g12U12/30/0544.95607197483.89
21320587John West tuna chunks in brine 4x185g12U12/31/0546.05655225093.918
21320587John West tuna chunks in brine 4x185g12U1/1/06005.6661
21320587John West tuna chunks in brine 4x185g12U1/2/0653.74904224534.567
21320587John West tuna chunks in brine 4x185g12U1/3/0674.23213810952.932
21320587John West tuna chunks in brine 4x185g12U1/4/0693.19433994932.988
21320587John West tuna chunks in brine 4x185g12U1/5/0634.14837418654.229
21320587John West tuna chunks in brine 4x185g12U1/6/0644.89857782273.89
21320587John West tuna chunks in brine 4x185g12U1/7/0656.15114171923.918
21320587John West tuna chunks in brine 4x185g12U1/8/0654.99754627396.464
21320587John West tuna chunks in brine 4x185g12U1/9/0644.23574764185.639
21320587John West tuna chunks in brine 4x185g12U1/10/0634.73578017653.789
21320587John West tuna chunks in brine 4x185g12U1/11/0633.66145065243.978
21320587John West tuna chunks in brine 4x185g12U1/12/0644.64532247035.468
21320587John West tuna chunks in brine 4x185g12U1/13/0685.28901609684.772
21320587John West tuna chunks in brine 4x185g12U1/14/0666.18515344144.686
21320587John West tuna chunks in brine 4x185g12U1/15/0614.46379176125.614
21320587John West tuna chunks in brine 4x185g12U1/16/0613.87881596894.412
21320587John West tuna chunks in brine 4x185g12U1/17/0624.62730315883.181
21320587John West tuna chunks in brine 4x185g12U1/18/0603.64814245623.721
21320587John West tuna chunks in brine 4x185g12U1/19/0624.33382161584.111
21320587John West tuna chunks in brine 4x185g12U1/20/0634.71546056155.005
21320587John West tuna chunks in brine 4x185g12U1/21/0645.43877784794.439
21320587John West tuna chunks in brine 4x185g12U1/22/0663.94638424863.119
21320587John West tuna chunks in brine 4x185g12U1/23/0623.08825530132.471
21320587John West tuna chunks in brine 4x185g12U1/24/0633.47203119021.74
21320587John West tuna chunks in brine 4x185g12U1/25/0612.59514164351.095
21320587John West tuna chunks in brine 4x185g12U1/26/0673.52459065372.412
21320587John West tuna chunks in brine 4x185g12U1/27/0644.01334287773.929
21320587John West tuna chunks in brine 4x185g12U1/28/0664.89809295654.273
21320587John West tuna chunks in brine 4x185g12U1/29/0633.22693251523.74
21320587John West tuna chunks in brine 4x185g12U1/30/0633.05083034652.388
21320587John West tuna chunks in brine 4x185g12U1/31/0613.52947369812.988
21320587John West tuna chunks in brine 4x185g12U2/1/0612.83363876521.38
21320587John West tuna chunks in brine 4x185g12U2/2/0613.53757701134.664
21320587John West tuna chunks in brine 4x185g12U2/3/0644.14858774134.788
21320587John West tuna chunks in brine 4x185g12U2/4/0664.8086888745.395
21320587John West tuna chunks in brine 4x185g12U2/5/0653.17828165524.203
21320587John West tuna chunks in brine 4x185g12U2/6/061825.5682039692.168
21320587John West tuna chunks in brine 4x185g12U2/7/062429.2296344121.76
21320587John West tuna chunks in brine 4x185g12U2/8/062425.0997540050.92
21320587John West tuna chunks in brine 4x185g12U2/9/061531.6144769363.088
21320587John West tuna chunks in brine 4x185g12U2/10/064733.895026735.579
21320587John West tuna chunks in brine 4x185g12U2/11/064832.30480014211.306
21320587John West tuna chunks in brine 4x185g12U2/12/062428.62664012310.892
21320587John West tuna chunks in brine 4x185g12U2/13/063022.95283687815.66
21320587John West tuna chunks in brine 4x185g12U2/14/061528.95290237814.011
21320587John West tuna chunks in brine 4x185g12U2/15/061323.6327330189.787
21320587John West tuna chunks in brine 4x185g12U2/16/062228.58170259815.493
21320587John West tuna chunks in brine 4x185g12U2/17/061532.82571066320.422
21320587John West tuna chunks in brine 4x185g12U2/18/064336.60002803528.803
21320587John West tuna chunks in brine 4x185g12U2/19/062824.60826112520.539
21320587John West tuna chunks in brine 4x185g12U2/20/061421.76410784826.393
21320587John West tuna chunks in brine 4x185g12U2/21/062021.86779294520.747
21320587John West tuna chunks in brine 4x185g12U2/22/061317.66458849613.488
21320587John West tuna chunks in brine 4x185g12U2/23/062024.31779824519.976
21320587John West tuna chunks in brine 4x185g12U2/24/061829.03840829523.152
21320587John West tuna chunks in brine 4x185g12U2/25/063437.96358857631.816
21320587John West tuna chunks in brine 4x185g12U2/26/062031.21423093823.017
21320587John West tuna chunks in brine 4x185g12U2/27/062429.26158952723.372
21320587John West tuna chunks in brine 4x185g12U2/28/062134.4302848121.125
21320587John West tuna chunks in brine 4x185g12U3/1/062215.9707363715.3
21320587John West tuna chunks in brine 4x185g12U3/2/061418.365207618.5
21320587John West tuna chunks in brine 4x185g12U3/3/062720.7933681418.7
21320587John West tuna chunks in brine 4x185g12U3/4/063423.2027127833.7
21320587John West tuna chunks in brine 4x185g12U3/5/061918.6704343123
21320587John West tuna chunks in brine 4x185g12U3/6/0621.88215756221.4
21320587John West tuna chunks in brine 4x185g12U3/7/0602.415383520.5
21320587John West tuna chunks in brine 4x185g12U3/8/0622.10636829915.3
21320587John West tuna chunks in brine 4x185g12U3/9/0622.8332277612.7
21320587John West tuna chunks in brine 4x185g12U3/10/0633.41415393.8
213 20587
demand
New System
Old System
Offsale Ind
Off Sale Ind
John West Tuna
Chart1
35.01173385133.168
36.55014798481.86
49.11900497731.438
58.89302157212.804
001.424
00.02891044381.569
04.2863198742.267
24.06470753743.168
26.22999432731.86
47.64381412851.438
45.67106905852.804
001.424
11.64552198291.569
10.78427982582.267
21.29850585153.168
33.21597077881.86
43.1075302411.438
33.03493143462.804
01.3900990171.346
41.92666730591.501
32.0998066622.474
41.85999355273.747
51.68744479872.141
33.72675424191.787
64.59702479523.557
12.59290588261.605
43.37024499722.886
62.79188420183.331
23.00337107864.679
23.05230887294.045
104.79665391933.177
47.02565417585.414
22.81469168331.393
22.67975070683.625
24.02638701794.906
33.4338586724.156
33.78766277123.953
34.32020752575.561
34.44870565434.616
12.15492548721.431
32.575300623.088
22.30569282533.09
42.0432066462.477
22.25838287662.319
43.8946818423.914
44.23021944273.179
32.05958337361.215
42.08960188982.44
52.09570555732.401
4.192.92626232273.259
53.76963980472.725
55.12143264474.408
34.64791836414.341
32.32453514022.039
43.73431975824.014
73.68423042523.819
63.73430757085.435
54.56755598373.972
75.76690851986.651
47.09306312726.13
13.7470985982.832
14.56187844985.162
34.49532940594.633
24.50174747965.939
124.2921993933.969
249.63924951235.714
1715.9057693244.759
1213.9192895361.981
2240.135566823.254
7282.0720827912.785
144.75198260238777
85.229039946338778
75.872197532838779
86.58898802838780
34.90108973138781
387825.372355737238782
387835.102077183738783
387843.07406957638784
387853.5733611538785
387864.127173189638786
demand
New System
Old System
Lemon Juice
233 6116
branchnumlinenumLONGNAMECASE_SIZECASE_SIZE_UOMdatedemandNew SystemOld SystemOffsale Ind
2336116Jif juice lemon 250ml12U12/21/0535.01173385133.168
2336116Jif juice lemon 250ml12U12/22/0536.55014798481.86
2336116Jif juice lemon 250ml12U12/23/0549.11900497731.438
2336116Jif juice lemon 250ml12U12/24/0558.89302157212.804
2336116Jif juice lemon 250ml12U12/25/05001.424
2336116Jif juice lemon 250ml12U12/26/0500.02891044381.569
2336116Jif juice lemon 250ml12U12/27/0504.2863198742.267
2336116Jif juice lemon 250ml12U12/28/0524.06470753743.168
2336116Jif juice lemon 250ml12U12/29/0526.22999432731.861
2336116Jif juice lemon 250ml12U12/30/0547.64381412851.438
2336116Jif juice lemon 250ml12U12/31/0545.67106905852.804
2336116Jif juice lemon 250ml12U1/1/06001.424
2336116Jif juice lemon 250ml12U1/2/0611.64552198291.569
2336116Jif juice lemon 250ml12U1/3/0610.78427982582.267
2336116Jif juice lemon 250ml12U1/4/0621.29850585153.168
2336116Jif juice lemon 250ml12U1/5/0633.21597077881.86
2336116Jif juice lemon 250ml12U1/6/0643.1075302411.438
2336116Jif juice lemon 250ml12U1/7/0633.03493143462.804
2336116Jif juice lemon 250ml12U1/8/0601.3900990171.346
2336116Jif juice lemon 250ml12U1/9/0641.92666730591.501
2336116Jif juice lemon 250ml12U1/10/0632.0998066622.474
2336116Jif juice lemon 250ml12U1/11/0641.85999355273.747
2336116Jif juice lemon 250ml12U1/12/0651.68744479872.141
2336116Jif juice lemon 250ml12U1/13/0633.72675424191.787
2336116Jif juice lemon 250ml12U1/14/0664.59702479523.557
2336116Jif juice lemon 250ml12U1/15/0612.59290588261.605
2336116Jif juice lemon 250ml12U1/16/0643.37024499722.886
2336116Jif juice lemon 250ml12U1/17/0662.79188420183.331
2336116Jif juice lemon 250ml12U1/18/0623.00337107864.679
2336116Jif juice lemon 250ml12U1/19/0623.05230887294.045
2336116Jif juice lemon 250ml12U1/20/06104.79665391933.177
2336116Jif juice lemon 250ml12U1/21/0647.02565417585.414
2336116Jif juice lemon 250ml12U1/22/0622.81469168331.393
2336116Jif juice lemon 250ml12U1/23/0622.67975070683.625
2336116Jif juice lemon 250ml12U1/24/0624.02638701794.906
2336116Jif juice lemon 250ml12U1/25/0633.4338586724.156
2336116Jif juice lemon 250ml12U1/26/0633.78766277123.953
2336116Jif juice lemon 250ml12U1/27/0634.32020752575.561
2336116Jif juice lemon 250ml12U1/28/0634.44870565434.616
2336116Jif juice lemon 250ml12U1/29/0612.15492548721.431
2336116Jif juice lemon 250ml12U1/30/0632.575300623.088
2336116Jif juice lemon 250ml12U1/31/0622.30569282533.09
2336116Jif juice lemon 250ml12U2/1/0642.0432066462.477
2336116Jif juice lemon 250ml12U2/2/0622.25838287662.319
2336116Jif juice lemon 250ml12U2/3/0643.8946818423.914
2336116Jif juice lemon 250ml12U2/4/0644.23021944273.179
2336116Jif juice lemon 250ml12U2/5/0632.05958337361.215
2336116Jif juice lemon 250ml12U2/6/0642.08960188982.44
2336116Jif juice lemon 250ml12U2/7/0652.09570555732.401
2336116Jif juice lemon 250ml12U2/8/064.192.92626232273.2591
2336116Jif juice lemon 250ml12U2/9/0653.76963980472.725
2336116Jif juice lemon 250ml12U2/10/0655.12143264474.408
2336116Jif juice lemon 250ml12U2/11/0634.64791836414.341
2336116Jif juice lemon 250ml12U2/12/0632.32453514022.039
2336116Jif juice lemon 250ml12U2/13/0643.73431975824.014
2336116Jif juice lemon 250ml12U2/14/0673.68423042523.819
2336116Jif juice lemon 250ml12U2/15/0663.73430757085.435
2336116Jif juice lemon 250ml12U2/16/0654.56755598373.972
2336116Jif juice lemon 250ml12U2/17/0675.76690851986.651
2336116Jif juice lemon 250ml12U2/18/0647.09306312726.13
2336116Jif juice lemon 250ml12U2/19/0613.7470985982.832
2336116Jif juice lemon 250ml12U2/20/0614.56187844985.162
2336116Jif juice lemon 250ml12U2/21/0634.49532940594.633
2336116Jif juice lemon 250ml12U2/22/0624.50174747965.939
2336116Jif juice lemon 250ml12U2/23/06124.2921993933.969
2336116Jif juice lemon 250ml12U2/24/06249.63924951235.714
2336116Jif juice lemon 250ml12U2/25/061715.9057693244.759
2336116Jif juice lemon 250ml12U2/26/061213.9192895361.981
2336116Jif juice lemon 250ml12U2/27/062240.135566823.254
2336116Jif juice lemon 250ml12U2/28/067282.0720827912.785
2336116Jif juice lemon 250ml12U3/1/06144.751982602
2336116Jif juice lemon 250ml12U3/2/0685.2290399463
2336116Jif juice lemon 250ml12U3/3/0675.8721975328
2336116Jif juice lemon 250ml12U3/4/0686.588988028
2336116Jif juice lemon 250ml12U3/5/0634.901089731
2336116Jif juice lemon 250ml12U3/6/065.3723557372
2336116Jif juice lemon 250ml12U3/7/065.1020771837
2336116Jif juice lemon 250ml12U3/8/063.074069576
2336116Jif juice lemon 250ml12U3/9/063.57336115
2336116Jif juice lemon 250ml12U3/10/064.1271731896
233 6116
demand
New System
Old System
Offsale Ind
Off Sale Ind
Jif Lemons
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Copyright SAS Inst itute Inc. A l l r ights reserved.
SAS FORUMRUSSIA 2017
Reduced $ inventory by 41% and increased revenue by $2,378 Billion
Forecast Error:Safety Stock:Lost Sales due to OOS: Revenue:
25% 1,160M5% 78,880B
15% 684,4M2% 81,200B
Before After
Results Prepared Food
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Copyright SAS Inst itute Inc. A l l r ights reserved.
SAS FORUMRUSSIA 2017
Revenue Optimization
PresenterPresentation NotesDemand Forecasting
10-30% inventory reduction2-5% revenue increase5-20% increase in product availability 10-50% improvement in forecast accuracy Improved customer satisfactionSignificant time savings.
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SAS FORUMRUSSIA 2017
Identifies SKU/store price points that maximize profits
Before After
Revenue Optimization
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Copyright SAS Inst itute Inc. A l l r ights reserved.
SAS FORUMRUSSIA 2017
Price is one of the most important retail profit levers.
A 10% change in . . . . . . Leads to a change in profit of
50%
30%
20%
Note: Illustrative estimates based on a 50% gross margin and non-product variable costs at 20% of sales
Price 100MM 110MM 10MM 20MM
Unit Cost 50 45 10MM 15MM
Sales Revenue 100MM 110MM 10MM 13MM
Fixed Expenses 20MM 18MM 10MM 12MM
Profit Lever Original
After 10%
ChangeOriginal Profit
New Profit
100%
Revenue Optimization
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SAS FORUMRUSSIA 2017
Sample Income Statement Actual Retailers ResultsRubles (RUB) % of Sales
Net Sales 116,000,000,000Initial Markup 63,800,000,000 55.0%Cost of Goods 52,200,000,000 45.0%Promotional Markdowns 23,200,000,000 20.0%Permanent Markdowns 34,800,000,000 30.0%Total Markdowns (Sell) 58,000,000,000 50.0%Total Markdowns (Cost) 26,100,000,000 22.5%
Gross Margin 37,700,000,000 32.5%
The difference betweenIMU and Gross MarginIs 22.5 Percentage Points
Better managing markdowns directly improves margin which directly flows through to pre-tax profitability
Markdowns are a fashion retailers single largest expense.
Revenue - Markdown Optimization
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SAS FORUMRUSSIA 2017
Before Optimization (RUB)
% of Sales
After Optimization
% of Sales
Net Sales 116,000,000,000 123,888,000,000Initial Markup 63,800,000,000 55.0% 68,134,400,000 55.0%Promotional Markdowns 23,200,000,000 20.0% 24,777,600,000 20.0%Permanent Markdowns 34,800,000,000 30.0% 28,742,016,000 23.2%Total Markdowns (Sell) 58,000,000,000 50.0% 53,519,616,000 43.2%Total Markdowns (Cost) 26,100,000,000 22.5% 24,083,827,200 19.4%
Gross Margin 37,700,000,000 32.5% 44,054,572,800 35.6%
PRETAX -Operating Earnings (EBITDA)
6,960,000,000 6.0% 12,760,000,000 11.0%
Percentage Point Gain 3.1
Net Result: 91% increase in Earnings
Revenue - Markdown Optimization
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Copyright SAS Inst itute Inc. A l l r ights reserved.
SAS FORUMRUSSIA 2017
Size & PackOptimization
Get the right size to the right store at the right time.
Recognize customer differences by store location, by department and by category.
Improve in stocks by size for basic, seasonal basic and fashion merchandise.
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SAS FORUMRUSSIA 2017
Current Size Distribution Actual Demand Size Profiles Womens Department
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SAS FORUMRUSSIA 2017
2016 Stock-out Rates For All Stores By Sizes
Stockouts are very high
For those styles with 4 sizes, at least 1 size is stocked out by store/style/week over 55% of the time
Number Sizes Stocked Out Frequency Percent
Cumulative Frequency
Cumulative Percent
0 5,081 44.53 5,081 44.531 2,738 24.00 7,819 68.532 1,702 14.92 9,521 83.443 1,228 10.76 10,749 94.214 661 5.79 11,410 100.00
Number of Sizes Store/Weeks Are Stocked Out
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SAS FORUMRUSSIA 2017
Cluster-based Size Allocations
versus
Average Extra Small Medium Med/Large Large
One scheme fits all
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SAS FORUMRUSSIA 2017
Sample Income Statement Using Actual Retailers ResultsRubles (RUB) % of Sales
Net Sales 58,000,000,000Gross Margin 23,200,000,000 40.0%Pre-Tax Income 4,060,000,000 7.0%
Net Sales Improvement 580,000,000 1.0%Gross Margin Improvement 232,000,000 0.4%Pre-Tax Income Improvement 232,000,000 0.4%Revised Pre-Tax Income 4,292,000,000 7.4%
Margin Improvement 174,000,000 0.3%Revised Pre-Tax Income 4,466,000,000 7.7%
10% flow through to pre-tax income
Size Optimization Value Proposition
Results: a 1%Reduction in Stock outs and 30bpsImprovement in Gross Margin
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SAS in RetailRecognized as Industry Leader by Forrester and Gartner
Industry Thought-Leaders
Global Presence
Analytic Expertise
Open Analytics Platform
Analytics in Retail for Strategic GrowthUnderstanding the New ConsumerUnderstanding Milennial / Gen-Z Shopping HabitsCompetitive LandscapePriorities of the Retail CEOSlide Number 6Out of the Backroom.into the Boardroom Enabling the CEO Agenda for ChangeSlide Number 8Slide Number 9Case StudiesSlide Number 11International Specialty RetailerSample Income Statement Using Actual Retailers Results Slide Number 14Before After.promotions several sample itemsSlide Number 17Slide Number 18Identifies SKU/store price points that maximize profitsPrice is one of the most important retail profit levers.Sample Income Statement Actual Retailers ResultsSlide Number 22Slide Number 23Slide Number 242016 Stock-out Rates For All Stores By SizesCluster-based Size Allocations Sample Income Statement Using Actual Retailers Results SAS in Retail