Industry News for the week of November 28, 2006

11/28/2006

Neiman Marcus Speeds Access to Data

Neiman Marcus selects the Netezza Performance Server (NPS) data warehouse appliance to provide high-performance business intelligence for customer marketing and merchandise analytics. With NPS, the company is able to perform faster query processing and has increased the number of queries it is able to run each day.
Prior to the installation, Neiman Marcus was experiencing performance issues from its marketing applications, used by the marketing and sales departments to perform analysis on marketing, sales and campaign data.

Neiman Marcus also has migrated its merchandise analytics to Netezza and has reported cost savings by eliminating the need to purchase additional hardware. The Netezza Performance Server system is built specifically to analyze terabytes of detailed data 10 to 100 times faster than existing data warehouse options. The NPS system stores, filters and processes terabytes of records within a single unit, analyzing only the relevant information for each query. Netezza has placed the CPU power next to the data, allowing the NPS system to speed through processes that would occupy most data warehouse systems for hours, or even days, thereby enabling dramatic increases in productivity across the organization.

Other Netezza retail clients include: Ahold, Amazon.com, Cingular Wireless, CNET Networks, Debenhams, Department of Veterans Affairs, Epsilon, Orange UK, Premier, Inc., Ryder System, Inc., Shoppers Drug Mart Corporation, The Carphone Warehouse and The TJX Companies.

Neiman Marcus, Inc. operations include the Specialty Retail Stores segment and the Direct Marketing segment. The Specialty Retail Stores segment consists primarily of Neiman Marcus and Bergdorf Goodman stores. The Direct Marketing segment conducts both print catalog and online operations under the Neiman Marcus, Horchow and Bergdorf Goodman brand names.

TECH TACTICS

Aldo Group Optimizes Inventory Management
Aldo Group selects Oracle Retail Price Optimization to help maintain the freshness of its merchandise and improve profitability through better in-season inventory management. Aldo will deploy Oracle Retail across more than 900 corporate locations in North America and the United Kingdom in 2007. The Oracle Retail Price Optimization initiative is part of Aldo's strategy to grow consumer loyalty, improve profitability and expand offerings to new markets. Aldo also plans to use Oracle Retail Price Optimization to help provide merchants with greater visibility into customer demand, the impact of price points on inventory levels, gross margin performance, and optimal in-season inventory management decisions.

Quixtar Enhances Enterprise Reporting and Analysis
Quixtar chooses MicroStrategy for enhanced enterprise-wide reporting and analysis capabilities. Quixtar, an online health and beauty retailer, developed an easy-to-use business intelligence (BI) application to support growing requests for data from business users across the organization. Quixtar's BI application offers a customizable user experience, enabling managers to view executive summary reports, marketing personnel to analyze sales promotions and customer demographics, and financial analysts to analyze product sales and invoices. The flexible BI application has reduced demand for IT support and increased efficiencies in the company.

Thriftway Supermarket Completes POS Upgrade
Thriftway Supermarket partners with IBM to provide Pay By Touch biometric payment service that lets shoppers pay for purchases with the touch of a finger. The new IBM SurePOS ACE application was implemented in 13 checkout lanes at Thriftway. It enables Thriftway to handle biometric payments faster, enhancing customer service. IBM SurePOS ACE, starting with release 4.0 and higher, will offer Pay By Touch as an option. Thriftway is using IBM e-business Hosting Services. As part of an IBM Software as Services solution, shoppers' Pay By Touch digital wallet information is securely stored off-site at IBM data centers. IBM Software as Services offers clients lower costs that are aligned with usage, minimal upfront expense, and rapid implementation with reduced risk.
NEW TECHNOLOGIES

Gomez Unveils Real-User Web Experience Measurement Service
Gomez Actual Experience XF (Experience First) provides a measure of the online customer experience from a browser-based perspective. The Actual Experience XF enables organizations to measure the performance of critical elements in a Web application that are invisible to traditional behind-the-firewall-based passive monitoring solutions. Actual Experience XF complements Gomez's existing active monitoring solutions, making the company the first to combine both actual-user and active monitoring so that organizations can deliver superior online experiences that satisfy customers, strengthen brands and drive profits.

FKI Logistex Launches Case Palletizers
FKI Logistex announces the launch of the new GS100 family of low-price, entry-level case palletizers. The GS100 series provides a cost-effective, fully automated palletizer for those organizations looking to convert from manual palletizing, as well as larger, multi-line operations where high-speed palletizing is not cost-justified. Capable of speeds up to 30 cases per minute, the GS100 series is ideal for a wide array of applications, including food, beverage, consumer goods and general manufacturing. It offers the same heavy-duty construction, flexibility and reliability that are the trademarks of FKI Logistex's mid- and high-speed palletizers. The GS100 series includes three models -- the GS120 (manual pallet handling), GS130 (semi-automated pallet handling), and the GS140 (fully automated pallet handling). All three models feature all-metric designs, pattern utility and layer-editing functions, and premium drive components for reduced maintenance requirements.
SUPPLIER SCENE

Stride Rite Standardizes Operations and Drive Business Growth
Footwear manufacturer Stride Rite signs on to implement the TradeCard Platform and SourceView visibility suite to streamline global trade and reduce costs caused by stock outs, excess inventory, late shipments, missed deliveries and retailer chargebacks. TradeCard will eliminate manual processes and extend control of Stride Rite's physical and financial supply chains to enhance visibility, improve margin and cash flow, and drive business growth.

Sling Media Upgrades Supply Chain Communication
Sling Media, a digital lifestyle products company, selects Inovis Managed Services and the Inovisworks value-added network (VAN) to manage its supply and fulfillment chains with trading and retail partners in the U.S. and Canada. To expand distribution beyond these markets, Sling Media is moving its entire fulfillment process in-house, migrating from accounting software to an Oracle ERP system and outsourcing all of its EDI processing and management. The implementation is expected to decrease the average multi-channel order-to-shipment window from between 24 and 36 hours to approximately two hours, and to enable point-of-sale (POS) data updates approximately 48 hours earlier than before.
ALLIANCES

Sterling Commerce to Acquire Comergent Technologies
Sterling Commerce announces an agreement to acquire Comergent Technologies, a developer of eBusiness software, for approximately $155 million in cash. Sterling Commerce plans to incorporate Comergent products to provide customers with a unified end-to-end order fulfillment solution across the extended supply chain. This unified solution will enable customers to increase revenue, shorten sales and order fulfillment cycle times, and reduce overall supply chain costs.

Kronos Expands Direct Sales Network with Acquisition of Time Controls
Kronos acquires Time Controls, the Tennessee-based authorized dealer, in a cash purchase transaction. Time Controls was a Kronos dealer in the greater Appalachian region of the U.S., including portions of Kentucky, North Carolina, South Carolina, Tennessee and Virginia. By acquiring Time Controls, Kronos now sells its solutions through its own direct sales network into the territories formerly managed by the dealer. Kronos will retain key Time Controls employees who will continue to provide service to existing customers.
MONEY MATTERS

Amazon.com Posts Third Quarter Increase in Jewelry Sales
Amazon reports a more than 100 percent year-over-year increase in its third-quarter sales of jewelry and watches. Sales of engagement rings and gemstones reach a 108 percent increase. Watch sales rise 122 percent year-over-year in the third quarter, a period when Amazon added 2,400 new watch styles, bringing the company's total offerings of jewelry and watches to 200 brands and 6,000 styles.

Wincor Nixdorf Announces Operating Profit Increase
Wincor Nixdorf, supplier of IT solutions for the banking and retail industries, closes out its 2005-2006 fiscal year with a significant increase in operating profit (EBITA) of 18 percent and a 12 percent improvement in net sales. These results surpass the company's own growth forecasts, which had been upgraded during the year to at least 15 percent for EBITA and at least 10 percent for net sales. Details will be published and discussed at the company's annual results conference, December 13, 2006, in Dusseldorf.
EXECUTIVE INTELLIGENCE

Analytics: A Retail Value Chain Perspective
by Venkata K Velugubanti and Ashish Jain

Retail as an industry; known for fledgling customer loyalty, low differentiation, wafer thin margins and high investment in supply chain, technology and real estate; is sitting on massive wealth that is underutilized. This article aims to help a retailer identify and uncover this wealth.
Most of the retailers have failed to realize that they are closest to the customer and are sitting on huge pile of data which could turn into a huge wealth -- wealth of information and insights which could help them differentiate from other retailers and increase their top line and bottom line. Analytics can help a retailer uncover this wealth. Business analytics involves use of sophisticated forms of data analysis for solving business problems.

It is not that most of the retailers have remained oblivious of the wealth that analytics can unlock. Even when a retailer has been able to identify the potential opportunities that analytics can provide, implementation becomes a bottleneck. The first question 'where do I start from?' becomes a difficult hurdle to cross and the effort gets abandoned at this stage.

This article aims to provide a retailer with basic guidelines which would help a retailer answer the questions

  • Where do I start and how do I go about analytics?
  • What are the key processes within a retail value chain where analytics could reap rich dividends?

     

    Where to start and How to go about analytics
    There are six key steps which could serve as a guideline to any retailer on where to start and how to go about analytics. These are:
    1. Identify Business Problems/ Opportunities
    2. Convert the opportunities/ problems to an Analytical problem
    3. Convert analytical outputs to business insights
    4. Devise an action plan
    5. Implement the plan
    6. Measure Plan effectiveness

    The key to success would be to look at the whole exercise as a structured process of going about analytics. The whole process would require considerable involvement of people who have understanding of both business domain as well as analytics. Having such people managing the whole process is quintessential for success of any analytics implementation.

    Key processes within a retail value chain where analytics could reap rich dividends
    All the functional areas with in a retail value chain will not be equally amenable to apply analytics. There are influencing factors that affect the applicability of analytics to specific areas in retail functional landscape. These factors revolve around data and process. These are:
    1) Data driven factors
    2) Process driven factors
    Based on the above factors functional areas and processes of retail value chain can be classified in to the following two segments.
    1. Areas where applicability of Analytics is high:

  • Store Location Planning
  • Merchandise Mix Planning
  • Store Specific Assortment Planning
  • Macro & Micro Space Planning
  • Pricing, Price Optimization & Revenue Management
  • Promo Pricing and Optimization
  • Forecasting, Replenishment & Allocation
  • Labor Scheduling
  • Customer Specific Marketing Programs
  • Customer Acquisition Programs
  • Customer Loyalty Programs
    2. Areas where applicability of Analytics is Moderate:
  • Promo Calendar
  • Deal Management
  • Ad Space Management
  • Order Management
  • Inventory Management
  • Store Ordering
  • In-store production planning
  • Loss Prevention

     

    The above list shows sample functional areas where analytics could produce the desired impact. These may vary depending upon the specific situation that an individual retailer faces, but the key tenets and approach to arrive at these areas would still remain the same.

    Conclusion
    Retailers who are able to realize and unlock the wealth of insights and information that they are sitting on would rule the next generation marketplace. This wealth once unlocked would provide a retailer with critical insights into issues such as: Who are my loyal/profitable customers?; Do I know them well enough?; Can I customize my offerings for them with respect to product, price, promotion?; How can I maintain loyalty of my existing customers?; How can I harvest more value from the same customer visiting my store?; How can I win new customers from competing stores and where do I locate my stores to reap maximum benefit. This could turn out to be the next mantra of growth for retail industry as a whole and specifically for retailers who embark on this path and are willing to take that leap of faith.

    Venkata K Velugubanti is a Senior Consultant in the Retail & CPG Practice in Infosys Technologies. He can be reached at [email protected]. Ashish Jain is a Consultant in the Retail & CPG Practice in Infosys Technologies. He can be reached at [email protected].

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