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Affinity Insight 2.0 for Retail
SAP Performance and Insight Optimization
February 2012
Customer‘s Voice


                                       “
                                “     Affinity Insight … allowed interrogation of our data
                                      across a number of stores and categories providing
                                      affinity insight, some interesting, some obvious, some
                                      counter intuitive and some potentially highly lucrative
                                      and attractive. Projected savings and benefits showed
                                      relatively short payback in a matter of months rather
                                      than years …

                                      Colin McLean - Chief Operating Officer, Scotmid Group




© 2011 SAP AG. All rights reserved.                                                             Public   2
What if…


                                        …you had full insight to
                                        buying behavior on market
                                        basket level?




             Effective                Rationalized            Optimized store
            promotions                assortment                  layout

         Analyzing customer behavior on market basket level can improve
         business decisions in various areas

© 2011 SAP AG. All rights reserved.                                       Public   3
The Challenge




                How to analyze sales on the level that
                matters most – the customer level?

                Only aggregated data available

                Lack of statistical functionality

                Performance problems due to huge data sets




         Most reporting environments irreversibly destroy valuable information by
         aggregating sales transactions to daily or weekly level

© 2011 SAP AG. All rights reserved.                                           Public   4
Solution Scope


            Affinity Analysis 2.0 is a tool for sales
            analysis on market basket level

            Ad-hoc calculation of many different
            market basket KPIs

            Maximum flexibility for analysis in product
            and store hierarchies

            Intuitive user interface

            High performance computations powered
            by SAP In-memory technology



         Affinity Insight 2.0 allows flexible computations on market basket level

© 2011 SAP AG. All rights reserved.                                                 Public   5
Analysis Example 1

Electronics retailer
Interested in effects of a digital cameras
promotion on sales of other products


                                      Affinity Insight might show:
                                      Every third customer who purchases a digital camera
                                      also buys a spare battery
                                      This was true in the past, independent of whether digital
                                      cameras were on promotion or not

Conclusion
A promotion on digital cameras will also increase battery
sales by an amount that can be well estimated


         Discover the true financial impact of drag-along effects

© 2011 SAP AG. All rights reserved.                                                   Public   6
Analysis Example 2

Drug store chain
Wants to define a new minimum assortment for all their stores
Approach: Mainly driven by lists of “top seller” items

                                      Affinity Insight might show:
                                      Certain premium products don’t have a strong direct
                                      contribution to over-all sales and profit, but they are
                                      often bought together with other high-value items in
                                      very profitable market baskets

Conclusion
Reducing the assortment without taking into account the
market basket view may put business with the most
profitable customers at risk

         Understand better how certain products indirectly contribute to your sales
         across the whole assortment

© 2011 SAP AG. All rights reserved.                                                     Public   7
Analysis Example 3

Do-it-yourself store chain
Considering a major change in store layouts


                                      Affinity Insight might show:
                                      Certain departments are represented together in the
                                      same market baskets more often than others
                                      The products in some departments tend to be
                                      purchased alone or in small baskets

Conclusion
This information may be used to allow customers shorter,
more convenient ways through the store, or guide them on
ways that improve drag-along sales


         Get indications on how shoppers move through your store

© 2011 SAP AG. All rights reserved.                                                 Public   8
Affinity Insight 2.0 – Solution Architecture


                                         SAP Business Objects Dashboards

                                         User-friendly front ends



                                         PIO Statistics Functionality

                                         Java web service and SQL algorithms



                                         SAP HANA
                              SAP HANA
                                         In-memory data base filled with POS data


         SAP HANA brings a new level of speed and detail to your analyses

© 2011 SAP AG. All rights reserved.                                                 Public   9
Advanced Analytics Portfolio


                                       Key Value             Zone                Markdown              Trial
     Affinity Insight
                                        Drivers           Optimization          Optimization        Management

     Assortment
                                          Size                Price              Marketing
      Insight &                                                                                          …
                                      Optimization         Optimization         Optimization
    Rationalization

                                             Performance Forecasting & Monitoring


                                                          Demand Model
                                            (location, seasonality, price, promotions…)


           Transaction Log Data                           Inventory Data                       Master Data




         Affinity Insight 2.0 is part of a broad portfolio of standardized and tailored
         advanced analytics solutions

© 2011 SAP AG. All rights reserved.                                                                          Public   10
Your Benefits


                    Business-relevant information that is not
                    accessible with most reporting tools

                    Computation of various metrics on
                    market basket level

                    Maximum flexibility to drill down in
                    product and store hierarchies

                    Real-time computations on huge data
                    sets with SAP In-memory technology

                    Extension to other analytics services on
                    the same technical platform


         Discover new facts about your customers with Affinity Insight 2.0 !

© 2011 SAP AG. All rights reserved.                                            Public   11
Thank You!

Contact information:

Dr. Helmut Linde
Head of Science and Technology EMEA
SAP Performance and Insight Optimization

Helmut.Linde@sap.com
+49 160 908 222 41

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Affinity Insight for Retail

  • 1. Affinity Insight 2.0 for Retail SAP Performance and Insight Optimization February 2012
  • 2. Customer‘s Voice “ “ Affinity Insight … allowed interrogation of our data across a number of stores and categories providing affinity insight, some interesting, some obvious, some counter intuitive and some potentially highly lucrative and attractive. Projected savings and benefits showed relatively short payback in a matter of months rather than years … Colin McLean - Chief Operating Officer, Scotmid Group © 2011 SAP AG. All rights reserved. Public 2
  • 3. What if… …you had full insight to buying behavior on market basket level? Effective Rationalized Optimized store promotions assortment layout Analyzing customer behavior on market basket level can improve business decisions in various areas © 2011 SAP AG. All rights reserved. Public 3
  • 4. The Challenge How to analyze sales on the level that matters most – the customer level? Only aggregated data available Lack of statistical functionality Performance problems due to huge data sets Most reporting environments irreversibly destroy valuable information by aggregating sales transactions to daily or weekly level © 2011 SAP AG. All rights reserved. Public 4
  • 5. Solution Scope Affinity Analysis 2.0 is a tool for sales analysis on market basket level Ad-hoc calculation of many different market basket KPIs Maximum flexibility for analysis in product and store hierarchies Intuitive user interface High performance computations powered by SAP In-memory technology Affinity Insight 2.0 allows flexible computations on market basket level © 2011 SAP AG. All rights reserved. Public 5
  • 6. Analysis Example 1 Electronics retailer Interested in effects of a digital cameras promotion on sales of other products Affinity Insight might show: Every third customer who purchases a digital camera also buys a spare battery This was true in the past, independent of whether digital cameras were on promotion or not Conclusion A promotion on digital cameras will also increase battery sales by an amount that can be well estimated Discover the true financial impact of drag-along effects © 2011 SAP AG. All rights reserved. Public 6
  • 7. Analysis Example 2 Drug store chain Wants to define a new minimum assortment for all their stores Approach: Mainly driven by lists of “top seller” items Affinity Insight might show: Certain premium products don’t have a strong direct contribution to over-all sales and profit, but they are often bought together with other high-value items in very profitable market baskets Conclusion Reducing the assortment without taking into account the market basket view may put business with the most profitable customers at risk Understand better how certain products indirectly contribute to your sales across the whole assortment © 2011 SAP AG. All rights reserved. Public 7
  • 8. Analysis Example 3 Do-it-yourself store chain Considering a major change in store layouts Affinity Insight might show: Certain departments are represented together in the same market baskets more often than others The products in some departments tend to be purchased alone or in small baskets Conclusion This information may be used to allow customers shorter, more convenient ways through the store, or guide them on ways that improve drag-along sales Get indications on how shoppers move through your store © 2011 SAP AG. All rights reserved. Public 8
  • 9. Affinity Insight 2.0 – Solution Architecture SAP Business Objects Dashboards User-friendly front ends PIO Statistics Functionality Java web service and SQL algorithms SAP HANA SAP HANA In-memory data base filled with POS data SAP HANA brings a new level of speed and detail to your analyses © 2011 SAP AG. All rights reserved. Public 9
  • 10. Advanced Analytics Portfolio Key Value Zone Markdown Trial Affinity Insight Drivers Optimization Optimization Management Assortment Size Price Marketing Insight & … Optimization Optimization Optimization Rationalization Performance Forecasting & Monitoring Demand Model (location, seasonality, price, promotions…) Transaction Log Data Inventory Data Master Data Affinity Insight 2.0 is part of a broad portfolio of standardized and tailored advanced analytics solutions © 2011 SAP AG. All rights reserved. Public 10
  • 11. Your Benefits Business-relevant information that is not accessible with most reporting tools Computation of various metrics on market basket level Maximum flexibility to drill down in product and store hierarchies Real-time computations on huge data sets with SAP In-memory technology Extension to other analytics services on the same technical platform Discover new facts about your customers with Affinity Insight 2.0 ! © 2011 SAP AG. All rights reserved. Public 11
  • 12. Thank You! Contact information: Dr. Helmut Linde Head of Science and Technology EMEA SAP Performance and Insight Optimization Helmut.Linde@sap.com +49 160 908 222 41