Business Intelligence in Retail
By:
Manish Kumar 09IT-012
Imran Siddiqui 09IT-013
Nishant Dubey 09IT-016
Omer Md Saber 09IT-017
Ravish Agarwal 09IT-024
Business Intelligence
Business intelligence (BI) refers to computer based techniques used in
spotting, digging-out, and analyzing business data, such as sales
revenue by products and/or departments, or by associated costs and
incomes.
Business Intelligence (BI) refers to skills, processes, technologies,
applications and practices used to support decision making
BI technologies provide historical, current, and predictive views of
business operations.
Various Functions of BI:
• Reporting • Business performance management
• OLAP • Benchmarking
• Analytics • Text mining
• Data mining • Predictive analytics
BI in Retail
BI in retail refers to the compilation and usage of data in an
organization or retail company in order to increase the knowledge that
companies have about their sales and facilitate their marketing
processes.
BI in retail applications are tools that allow real-time analysis and
interactive manipulation of critical company´s information.
These applications provide users a higher understanding of the current
performance of their Points of Sale (POS) and the purchase behaviour
of their clients to anticipate future events, to improve profitability,
business efficiency and customer service, and offer the possibility to
identify new business opportunities
Reasons to adopt BI
Increased competition
Need to squeeze more profitability out of less space
Prevalent credit card usage
Internet’s role as an alternative sales channel
The popularity of loyalty cards
RFID (radio frequency identification)
BI provides answers
What items should be included in the inventory
What pricing and promotional strategy is the most effective
What the demand will be for a select assortment of
merchandise
What impact an incremental price change will have on demand
Which floor plan will sell more designer apparels
Which customers will respond to a direct mail or exchange offer
Where to place retail outlets
How many of each size or colour of an item to put in each store
When and how much to discount
Retail Technical Priorities
1. Business Intelligence Applications
2. Security Technologies
3. Mobile Workforce Enablement
4. Collaboration Technologies
5. Customer Sales and Service
6. Service Oriented Architectures
7. Workflow Management
8. Networking, Voice and Data Communications
9. Virtualization
10. Legacy Application Modernization
Source: Gartner EXP (2006)
Business Intelligence is Top Technology
Priority
Better information about what is happening at the point of sale is critical.
Category managers can watch the movement of each article category and
make changes in product mix every day if necessary.
Sales management can know what products pull customers into stores
and optimize their promotions accordingly.
Store Managers can understand customer traffic patterns and optimize
staffing levels to better serve the customer and reduce staffing cost at the
same time.
Retail Business Intelligence elevates awareness of how each store,
product, and promotion is performing enabling each member of the
stakeholder team to have the information they need to make better and
quicker decisions to improve turnover and profitability.
Technological Advances and Improved Decision
Making
New interfaces and approaches to BI are New technology advancements such as
empowering decision makers by providing in-memory BI are providing new levels of
relevant data in a user friendly interface performance and helping users gain real-
time insights into their data
Simplicity agility
and relevance
integration
BI needs to be integrated within business processes
and more widely distributed to functional business
units such as merchandising, warehousing and store
operations, so decisions can be made at the point of
impact.
Players in BI(Retail)
IBM Cognos
SAS
Microsoft Dynamics
SAP
SRIC BI
WebFOCUS BI
QLIKVIEW
Various Factors affected by BI in retail
Customers
Competitors
Business partners
Economic environment
Internal operations
Data Elements in retail BI Arena
Master Data
Customer, Product, Merchandising, Vendor, Employee,
Campaigns and promotions
Transaction Data
Sales Baskets, product pricing, discount coupons, returns,
refunds, complaints, fulfilment, and inventory/stock
Derived Data
customer loyalty, customer segmentation
Analysis areas
Segmentation, market basket analysis, returns analysis, failed
deliveries, inventory analysis, fraud analysis, customer service,
delivery options, and basket & spend analysis, marketing,
profitability analysis
Sales Data
. POS
. Turns
.GMROI
Merchandising Market Data
. Market share
data . Competitor pricing
. Competitor product lines
Key data sets BI tools use
Promotional and
Supply chain and marketing data
operations data . Success of past
. Demand promotions / customer
. Identify profitable products feedback
. Keep track of units sold . Total cost of promotion
. ROI on promotion
Customer-centric
data
. Demographics
. Frequency
. Loyalty
Type of BI tools
Spreadsheets
Reporting and querying software: tools that extract, sort,
summarize, and present selected data
OLAP: Online analytical processing
Digital Dashboards
Data mining
Decision engineering
Process mining
Business performance management
Local information systems
BI Tools
Open source free products
Eclipse BIRT
Rapid Miner
Open source commercial products
Palo (OLAP database): OLAP Server, Worksheet Server and ETL Server
Pentaho
Proprietary free products
InetSoft
MicroStrategy: MicroStrategy Reporting Suite
Proprietary products
IBM Cognos
Informatica
Teradata
Specific areas of BI implementation (in
Retail)
Merchandise intelligence
merchandise planning, assortment, size, space, price,
promotion, and markdown optimization
Market intelligence
marketing automation, marketing optimization, and market
basket analysis
Operational intelligence
IT portfolio management, labour optimization, and real estate
site selection
Current trend in BI in Retail
Business Development Area: Campaign management
& Promotions, customer segmentation, market place
etc.
Customer Engagement Area: Complaints, returns,
refunds etc.
Business Reporting: Budgeting, actual analysis,
transaction & operations monitoring etc.
Procedure to generate reports
Simple but powerful solutions
Helps in understanding retail business intelligence
and retail selling environments
Simple architecture allows everyone to take active role
in its implementation
Microsoft Office PerformancePoint Server 2007
PerformancePoint addresses four main areas for working
with information.
Planning, Budgeting & Forecasting : enables business
users to design business models that mirror the way they
think about their business
Monitoring – Dashboard and Scorecards : to monitor and
track performance against goals and to take action when
appropriate
Analytics : drill down into the data to better understand
the business, see trends, spot highlights, perform root-
cause analysis, and build new key performance indicators
Reporting & Consolidation : operational and financial data
into reports that can be shared
Business Intelligence Advantages in Retail
Industry
Predict customer likelihood to purchase a new product offering
Identify highly profitable customers by:
Total value of sales, number of sales, estimated lifetime value
Identify ‘lost’ customers
Identify troublesome customers (return policies, etc)
Identify customers responsive to promotional offerings
Determine which customers will be more responsive to specific types of
marketing
Contd…
Recognize which customers will remain loyal to your product despite
changes to certain product variables (price, availability, etc)
Increase profits
Develop or purchase new product lines with confidence
Develop highly targeted and successful promotional campaigns based
on data collected from past campaigns and customer feedback
Achieve accurate allocation (type and quantity) of stock across
channels and stores leading to improved efficiency at the supply chain
level as well as increased sales and profitability
Breakout Case Study:
Reliance Retail
Newly formed subsidiary of Reliance group of
industries
Aggressively working on introducing a pan India
network of retail outlets in multiple formats
In India today retail is still largely a “mom and pop”
sector with only 4% of all retail happening through
professionally managed, company owned entities.
Reliance has built a world-class IT infrastructure from
scratch with the goal of optimizing value to customers
by providing the right assortment at the right price.
Reliance has to date opened roughly 300 stores with a goal
of reaching 5,000 within the next three years
For business intelligence, Reliance Retail chose SAP
NetWeaver
Already 2,500 users using their BI system productively
after only 9 months
Reliance has chosen an iterative process to deploy BI,
beginning with a push strategy of delivering reports to
users on a regular basis
SPAR Austria
SPAR is a unique voluntary chain in which wholesalers
and retailers work together in over 34 countries under
one name.
15,160 stores under the SPAR brand are serving 8
million customers a day worldwide.
Winning concept is strengthened by the knowledge
sharing between the SPAR countries, coordinated by
International SPAR.
SPAR Austria has implemented SAP NetWeaver and
their in-memory enhancement called BI Accelerator
(BIA) to support roughly 600 users
Subsequent to deploying the BI Accelerator the
response time to analyse 900 million data records
dropped from several minutes to 9 seconds
Changed the analysis work from something that they
had to do as part of the job to something that was “just
fun.”
Predictions by Gartner about the Market
By 2010, around 19% of the firms will obtain sector centric investigative application
transported via software as a standard element of their business intelligence range.
By 2013, the commercial divisions will administer at least 40% of the entire
financial plan for business intelligence.
By 2012, more than 34% of the leading 5,000 international firms will fail to make
astute choices about considerable alterations in their operations and markets, due
to inadequate data, equipments and techniques.
By 2012, half of the systematic functions related to business operations will be
supplied via coarse-grained appliance.
By 2010, a mutual decision making will surface as an innovative goods type that
joins communal software with business intelligence proposal competences.
References
http://www.mindtree.com/downloads/Retail_BI_Flye.pdf
http://204.154.71.138/pdf/ECON/WP_BI_for_Retail.pdf
http://www.prlog.org/10123229-the-competitive-game-is-changing-for-retail-
business-intelligence-for-retail-industry.html
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http://business.mapsofindia.com/business-intelligence/for-retail-industry.html
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Thank You
