oracle rpas planning: how luxottica is tailoring its …...chains in north america. a major retailer...

Boston, March 25th, 2014

Oracle RPAS Planning: How Luxottica is tailoring its offering to customers

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Ø  Luxottica, The Company

Ø  Sunglass Hut, A Tailored Product Offering

Ø  Retail Merchandise Planning, The Background

Ø  Oracle RPAS, The Program Journey

Ø  Sunglass Hut, Main Achievements

Ø  What’s Next

Ø  Q&A

Agenda

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2007 2012

2008

2005

2003 1999 1995

1988

1971

2013

2011

2009 2006

2004

2001

2000

1996

1990

1981

1961

Luxottica, Over 50 years of carefully planned growth

The first Luxottica optical eyewear collection debuts at the MIDO international trade fair in Milan.

Is launched. The foundation provides free vision care and eyewear around the world to those in need.

One of the largest optical retail chains in North America.

A major retailer of premium sunglasses.

Leonardo Del Vecchio founds Luxottica. Enters the group e C.S.A.S., which in 1964 was transformed into a joint-stock company named Luxottica S.p.A.

Luxottica Group is listed on the NYSE. Luxottica Group is listed on

the Milan Stock Exchange

Enters the group Enters the group

Acquisition of the license

Acquisition of the license Enters the group

Enters the group

Among the leading optical retailers in Australia and NewZealand.



A leading retail chain in North America.







Acquisition of Tecnol, Brazil




Enters the group. Includes Oliver Peoples, Paul Smith and a retail network of 160 stores.

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OPTICAL

EUROPE 430+

SUN

SUN

S. AFRICA 120+

SUN OPTICAL

CHINA & HONG KONG 200+

SUN OPTICAL

AUSTRALIA & NZ 800+

SUN OPTICAL

NORTH AMERICA 4,730+

SUN OPTICAL

LATAM 650+

Luxottica Retail, 7,000 Store Network

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Luxottica, A vertical integrated business model

PRODUCT DEVELOPMENT

MANUFACTURING

LOGISTICS

WHOLESALE DISTRIBUTION

RETAIL NETWORK

LENS FINISHING

MANAGED VISION CARE

STARS (VMI)

CUSTOMER

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Ø  What’s Next

Ø  Q&A

Agenda

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Sunglass Hut: Tailoring product offering to customers

Strong Product Portfolio

Powerful Store Segmentation

Fresh Flower Product Model

360 Story Telling

Approach

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ü  The most significant brands ü  The hottest trends

Sunglass Hut: A Strong Product Portfolio

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Build Sunglass Hut Brand Equity Showcase Luxury/Premium Brands

Deliver consistent experience across high store count base to

build Sunglass Hut loyalty

Platinum Gold & Silver

Outlet

Sunglass Hut: A Powerful Store Segmentation Strategy

Department Store

Capture new customer through Host Broader access to Luxury

Brands

Exit strategy with opAmized margin and offering of great brands at a great value

ecommerce

Infinite assortment

sunglasshut.com macys.com amazon.com

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Sunglass Hut: A “Fresh Flowers” Product Model

Product Flow

360 Story Telling

Product Briefing

Product Development

Technical Design

Assortment Planning

Lifecycle Mgmt

Production Planning

Virtuous cycle to efficiently design, manufacture, deliver & communicate more consumer-relevant & engaging products

Exit Strategy

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Sunglass Hut: A 360 Story Telling Approach

Enhanced story-telling enables

ü  More frequent, tailored-made stories

ü  Maximizes story-telling potential of the store

Results

ü  Lift in consumer engagement

ü  Increased frequency of store visits

ü  Increased conversion

Associate

PR

SGH.com

Digital Media

CRM DM & EMAIL Social

Front Door

TSQ Billboard

Macy Books & Window

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Ø  What’s Next

Ø  Q&A

Agenda

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2

3

4

Why A New Planning Program?

ü Manage large store count with tailored assortments

ü Leverage newness for compeAAve edge

ü Modernize our planning process

ü Life-‐cycle management

ü Balance integrated lead Ame planning with short term needs

ü Supply chain integraAon to opAmize inventory and service levels

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Ø  What’s Next

Ø  Q&A

Agenda

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In 2009 Luxottica launched a new Planning Program selecting Oracle RPAS as the application

1.  Leading Planning Application 2.  End to end coverage of Integrated Planning Processes 3.  Optimization engines and mining capabilities available for future enhancements 4.  Minimize Total Cost of Ownership

I.  Configurable application II.  Community of Partners

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LENSES & CONTACTS

ALOE

FRAMES

Luxottica RPAS Global Templates: Frames and Lenses

Frames, Lenses & Contacts Planning Modules

The Global & Local Domain structure enables a roll out of the solution at different extents of complexity

!  Strategic Targets

!  Merchandise Planning

!  Location Planning

!  Assortment & Item Planning

!  Optimization engine (ALOE)

!  DC Planning

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RPAS Global journey started in April 2010

Frames + Lenses: LENSCRAFTERS

Business Blue Print

Frames SUNGLASS HUT: US + UK

Implementa?on Streams

Global template finaliza?on and Project Approach review

Program Management

Apr ‘10 Aug ‘10 Aug ‘12 May ‘13

Global model defini?on considering sun and op?cal divisions:

Jun ‘12 Aug ‘’11

Frames: MEXICO

Aug ‘13

Blue Print Lenses

Change Management

Nov ‘13

Frames IBERIA

May ‘14

Frames: STARS

Feb ‘14

Frames SOUTH AFRICA

Frames + Lenses PEARLE, SEARS, TARGET

Frames + Lenses AUSTRALIA & NZ

Frames ITALY, GERMANY

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Sales org already live Next streams

Brazil, Chile & Latin America

Turkey Spain

Luxottica RPAS: Current and future footprint

SEA

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Luxottica RPAS: Support Team and Change Control Board

RPAS Support Team Change Control Board For all global RPAS issues, Luxottica developed a support team to support the business.

As a result of a global template approach for the RPAS roll-out, a Change Control Board (CCB) has been identified to govern and check all the Change Requests (CRs) and their consistency with the global strategy. The CCB is representative of the different businesses and geographies.

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Ø  What’s Next

Ø  Q&A

Agenda

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2009-2013 Sunglass Hut Global Growth

•  ~2,000 stores

•  4 Countries

•  €665 Million Sales

•  YOY Comp: ~ -7%

•  ~3,000 stores •  9 Countries •  €1.1 Billion Sales

•  YOY Comp: +11.5% ü  Mature Markets growing at 7% ü  Emerging Markets doubling at 105% growth

+42%

+65%

2009 2013

SGH Ambition for the next 3-5 years: ~4000 stores and 2B€!

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Sunglass Hut NA: RPAS Drives Results

SALES

ü  POLARIZED

SERVICE

ü  IN STOCK

INVENTORY

ü  UNIT TURN

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Sunglass Hut NA: Attribute Strategy Drives Sales

38% 40% 42% 44% 46% 48% 50%

2010 2011 2012 2013

SUN UNIT POLAR PENETRATION

POLAR

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

2010 2011 2012 2013

SALES GROWTH

POLAR TTL SUN

ü  Strategic polar attribute planning provided clear roadmap to 48% polar penetration and four years of 15% to 25% polar sales growth per year

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Sunglass Hut NA: Increase In Inventory Productivity

90.0% 92.0% 94.0% 96.0% 98.0% 100.0%

10 Q2

10 Q3

10 Q4

11 Q1

11 Q2

11 Q3

11 Q4

12 Q1

12 Q2

12 Q3

12 Q4

13 Q1

13 Q2

13 Q3

13 Q4

KEY ITEM IN STOCK (GOAL >97%)

QTR

2.5 2.6 2.7 2.8 2.9 3.0

10 Q4

11 Q1

11 Q2

11 Q3

11 Q4

12 Q1

12 Q2

12 Q3

12 Q4

13 Q1

13 Q2

13 Q3

13 Q4

P12M UNIT TURN

QTR

ü  Strategic RPAS parameter planning drove 17% unit turn increase, while maintaining in >97% in-stock service level on key items

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New Storytelling •  ~120MM visits with ~7% conversion •  ~40 Front Door campaigns, an average of 2 per segment per month

New Product Flow balanced with Key Items •  ~1,000 new skus represent 65% of product offering •  Still, 60 UPC’s, 7% of store display, generate 25% of sales, with service level >97%

Sunglass Hut NA: Fresh Flowers from Idea to Reality

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Ø  What’s Next

Ø  Q&A

Agenda

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Luxottica is fully focused on global consistency

Frames + Lenses:•LC

Business Blue Print

FramesSGH: US + UK

Implementation Streams

Global template finalization and Project Approach review

Program Management

Apr ‘10 Aug ‘10 Jun ‘11 Mar ‘11

Frames + Lenses• LLB

Aug ‘12 Jan ‘13 May ‘12

Global model definition considering sun and optical divisions:

Jun ‘12Aug ‘’11

Frames •RSA

Frames:•MEX

Frames + Lenses• LLB

Aug ‘12

Frames•DC UK

Blue Print Lenses

Change Management

Complete the Retail roll out

Launch STARS, wholesale model

Fully leverage Customer Data within Store Clustering

Bolt on Optimization Engines

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Q&A

oracle rpas planning: how luxottica is tailoring its …...chains in north america. a major retailer...

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