HED 460 Data Management What are all the different types of data companies might wish to collect? Which company divisions would use which parts of the data?

HED 460 Data Warehouse – Key Data Sales Inventories Customers Market baskets Margins Markdowns Promotions Stores Competition Weather

HED 460 Data Management Raw Data Data Warehouse Data Mart

HED 460 Data Warehouse A database that collects business information from many sources in the enterprise. Covers all aspects of the company’s processes, products and customers. Multi-dimensional view

HED 460 Data Warehouse Data must be “scalable” Increase in data volume, number of users, and complexities of queries does not require new systems

HED 460 Data Warehouse Data must be “relational” Data is stored one time only Data stored in different tables are “linked” One-to-one relationships One-to-many relationships

HED 460 State of Data Warehousing 80% retailers have implemented 70% suppliers have implemented Walmart has biggest data warehouse in the world More than ½ retailers/suppliers will expand use of data warehouse Lack of analysis is big problem

HED 460 State of Data Warehousing Top 3 uses – Retailers Replenishment Managing inventory assortment Loyalty programs

HED 460 State of Data Warehousing Top 3 uses – Suppliers On-time shipment tracking Planning and forecasting Systems and process performance tracking

HED 460 Customer Loyalty Types of customers New – most expensive Reactivation - expensive Repeat/loyal – least expensive 80% of the business is supplied by 20% customers

HED 460 Loyal customers - case DecileVisits/wk% sales% cum % %64% %77% 7.649%86%

HED 460 Customer Loyalty Tailor loyalty building strategy to customer type Identify most profitable customers, products and markets Monitor customers’ reaction to direct communication and adjust strategy.

HED 460 Customer Loyalty Target purchases of complementary or higher margin items to items already bought Relate purchases to demographic and lifestyle profiles

HED 460 Lees Supermarkets Top 40% of card holder purchases = 79% of all gross profits Stopped all conventional ads Reset and remerchandised store based on items, brands, categories preferred group wanted/liked

HED 460 Lees Supermarkets Decreased inventory by 25% Increased sales to best customers by better presentation Newsletters (pet club/wine) to most profitable customers Checkout lanes to suit best customers

HED 460 Lees Supermarkets - Results Transaction count is down 5% Average transaction up 10% Overall business up 10-12% Out of stocks reduced 5% to 3%

HED 460 Buying and Merchandising Merchandise/assortment plans Category management Promotion planning/execution Markdown management Sales and stock management Forecasting/replenishment

HED 460 Merchandise/Assortment plans Effects of widening and narrowing assortment Calculate best size ratios by product Color analysis Adjust sales from prior year based on unusual features Establish demand and relate to sales

HED 460 Sales and stock management Assess markdown success Sell through curves by store and SKU Vary inventory density in stores to determine proper stock levels Identify under performing stores by sales per square foot Gross margin management

HED 460 Markdown Management %Plan Time Plan A B C A=no MD B=20% MD C=move goods to store A Sell through