For retailers and consumer brands, big data analytics can be an amazing opportunity—or an amazing waste of time.
Big data and the Internet of Things (IoT) are ushering in a new generation of quantitative analysis, leaving historical business intelligence approaches and solutions far behind. Many companies are already actively pursuing new quantitative approaches in consumer insights, product development, marketing and promotion, forecasting, merchandising and planning, sourcing, buying, replenishment, and inventory flow. Quite simply, they’re using new data and new math to generate insights that increase precision, predict more accurately and enable greater personalization.
As this new frontier has gained traction, companies are finding that the easier part is navigating the explosion of data and creating the insights, while the harder part is focusing on the right insights and applying them to unlock their full potential value—dramatically improving operational efficiency, effectiveness and competitiveness.
GETTING TO VALUE
Kurt Salmon applies our deep industry expertise from product design through customer experience—and everything in between—to help our clients rapidly select, pilot and scale advanced analytics solutions and achieve the maximum ROI.
This involves not only capturing the right data and turning it into meaningful insights, but also following through so that those insights create tangible changes to improve your performance—quantifiable benefits for your business— and ensure that they take hold and thrive. (See Exhibit 1.)
Kurt Salmon understands how to build modern, flexible analytics platforms that allow retailers and consumer brands to remain flexible and continuously capitalize on the latest and most promising analytics-based innovations. In today’s world of cloud-based architectures, creating flexible platforms is critical for achieving overall success at a level that redefines performance and disrupts the competitive landscape.
CASE STUDIES: APPLIED ANALYTICS IN ACTION
Merchandising Effectiveness: Developed new analytics and a new process for buying, sizing and allocating at a leading department store. This resulted in an 8.5% comparative sales increase, while competing retailers experienced declines of 2.5% to 6.5% for the same categories and time period.
In-Season Responsiveness: Developed new forecasting analytics and process to help a large global brand more quickly react to trends in-season. This increased full-price sell-through and reduced markdowns, yielding a 4% margin improvement.
Supply Chain Efficiency: Modeled and then implemented new inventory flow analytics and process to support omnichannel capabilities for a leading retailer. This simultaneously reduced transit costs by 15% and transit times by 10%. Additionally, $200 million of previously planned capital spend was deferred.
Operating Model Transformation: Designed and implemented a future-state data-driven merchandising organization for a major global luxury brand. This resulted in cost savings of 13% and an EBITDA increase of 3.4 points.
Assortment Optimization: Developed and implemented an assortment optimization tool for buyers and planners at a multichannel retailer. This reduced style-colors by 20% while maintaining overall sales.
SIDEBAR: KURT SALMON BENEFITS
Kurt Salmon combines our deep omnichannel and change management expertise with our broad knowledge of every facet of a modern retail or brand organization to help retailers mitigate the risks that large transformations inevitably present. With nearly a century of retail and consumer experience, we have worked with 30 of the world’s top 50 retailers and scores of global and specialty brands to design and align how they operate in order to shape and satisfy their customers’ desires—now and in the future.