Forward-looking Retailers are putting data to work to increase sales and better serve customers

Rick Whiting, Contributor

March 5, 2003

3 Min Read

Save Mart provides store managers with printed reports from its Essbase system. But plans call for giving store managers direct access to the application within a year, either with a Web interface or the same Excel front-end application now used by execs.

Mark's Work Wearhouse Ltd., a men's work-and casual-apparel store chain, is rolling out to its 310 stores a Web-based reporting system developed using Crystal Decisions Inc.'s Crystal Enterprise software. It gives store managers and employees about 20 reports with metrics such as sales per employee, sales by product category, and cash-versus-credit sales--both within a store and summary reports of all stores. The reports use data from the retailer's Retek Inc. point-of-sale system and IBM DB2 database. The company chose Crystal Enterprise mainly because it's easy to use, both for developers and store employees, CIO Robin Lynas says.

Ace Hardware Corp. is undertaking several initiatives to give its 5,000 stores business-intelligence capabilities--not surprising, perhaps, given that Ace is a cooperative owned by its store operators. The company's Teradata data warehouse, which contains sales data collected from 1,800 Ace stores, can be accessed by store owners and managers as well as company executives using applications built on the MicroStrategy business-intelligence platform. Owners of the 1,800 stores can view detailed data about their own operations, while all 5,000 stores have access to aggregated data on such topics as product-category management and promotion effectiveness.

One particularly effective analytical application helps store owners set the right price for products, says Brian Smetana, senior business analyst. While Ace recommends prices, store owners are free to set their own. Owners and managers have access to a retail price-variance application that calculates how much profit they're losing if they charge less than Ace's recommended price and how much sales volume they're losing if they charge more. "That has paid for the data warehouse many times over," Smetana says.

Retailers are generally relying on data warehouses of accumulated information for analysis--spotting trends requires historical data. Few are analyzing data in real time. But Ace is developing a business-intelligence system called Eagle Vision, using Micro-

Strategy7i and a DB2 database, that will draw operational data from a new centralized point-of-sale system that's being installed throughout Ace stores during the next several years. That will let store operators see the price and inventory status of any product in their store in real time.

One area in which retailers lag is tying their business-intelligence systems to customer-relationship management applications and conducting analysis at the customer level. Retailers often don't know who their customers are, especially the cash-paying ones (see story, p. 58). Hudson's Bay is an exception: Thanks to its own credit cards and rewards program, the company can trace 65% of all transactions to specific customers. The company plans to look at how that information can be used in conjunction with a CRM or marketing-campaign management system.

"We're continually looking for new competitive advantages and better ways to eke out profits from each sale," Davenport says. Hudson's Bay and other forward-looking retailers are sold on using business-intelligence IT to do that.

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