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Revolutionising Retail with Business Analytics

Arun Gupta, Customer Care Associate and Group Chief Technology Officer, Shoppers Stop presented at the Premier Business Leadership Series 2010,

With many retailers worldwide struggling to maintain revenues, how do you grow in such a tough competitive landscape? As a leading Indian retailer and pioneer in using technology, especially business analytics, Shoppers Stop is not only thriving but has helped revolutionise the retail sector. Gupta will share insights on using analytics to drive business value, reduce operational costs and provide better products and customer experience.

Revolutionising Retail with Business Analytics

  1. 1. Business Analytics Insights Session Revolutionising Retail with Business Analytics Arun O Gupta Customer Care Associate and Group Chief Technology Officer Shoppers Stop
  2. 2. Arun O Gupta Customer Care Associate & Group Chief Technology Officer
  3. 3. K Raheja Corp and Shoppers Stop • A large and well established real estate developer, with several decades of experience in India • Expertise across different major real estate formats. Pioneering role in India in development of concepts such as self contained townships and modern business parks self-contained • Ranked as “Best Developer” in India in 2007 and 2nd in 2008 & 2009 by Euromoney (Real Estate Awards) • Also ranked 7th amongst real estate developers globally by Euromoney (Real Estate Awards – 2009) Commercial Malls Residential Hospitality Retail IT Office SEZ IT-Office-SEZ Renaissance(1) Mumbai Hotel & Convention Centre JW Marriott Hotel(1) (2) Mumbai Marriott (1) Executive Apts (4) Lakeside Chalet, Mumbai ( ) (1) (1) Run under management agreements by third parties Vashi, Navi Mumbai (2) K. Raheja Corp is one of the shareholders (3) Licensing arrangement Real estate businesses (4) Franchise arrangement with Servcorp Non-real estate business
  4. 4. Retail presence Presence in 18 Cities Over 2 million square feet of retail space O f f – Shoppers’ Stop 32 Amritsar – Home Stop 4 Delhi(3) Gurgaon g Noida – Mother Care 24 * Ghaziabad – MAC (13) + Jaipur (2) Lucknow Clinique (3) 19 Estee Lauder (3) – Crossword 61 ** Bhopal – Time Zone 6 Kolkata(3) – Airport [Nuance] 2 – HyperCity 7 Mumbai (8) Pune ( ) (2) Hyderabad (3) * Including 13 Shop in Shops ** Includes 24 Franchisee Stores Bangalore (4) Chennai As of August 2010 1.7 million First Citizen Members
  5. 5. Retail in India Consumption to exceed $ 1.5 trillion by 2025 Organized retail is estimated 6% of total in 2010
  6. 6. To B or not to B, it’s scary Source: Gartner report 2009 Because of lack of information, processes, processes and tools through tools, 2012, >35 % of the top 5,000 global companies will regularly l b l i ill l l fail to make insightful decisions about significant changes in their business and markets markets. That’s 8 million results !
  7. 7. A Consultant’s view
  8. 8. Something called Best Practice
  9. 9. And a Road Map Source: Gartner Research
  10. 10. Current reality helps assess way forward Are reports ineffective now ? Do you spend a lot of time with spreadsheets ? Unable to correlate different dimensions ? Need to integrate external data ? N dt i t t t ld t Response time a challenge ? Question is “Is Analytics the answer ?” Is ?
  11. 11. Euphoric expectations from monolithic projects Enterprise Datawarehouse is complex Multiple sources lead to conflicts Most data warehouses are Orphans Starting point is always reports Tool adequacy remains a challenge q y g Analytics to insights can take eons
  12. 12. Our tryst with analytics Began in 2004 to analyze First Citizen behavior Low budget exercise, limited impact felt by 2005 Retail boom started in 2006; pressure on growth Netezza appliance based EDW in 2007 Investments in SAS tools in 2008 2009, explored alternative engagement models 2010, 2010 we are here !
  13. 13. Data, data everywhere, where to begin ? • Transactional systems Data • Financial transactions sources • Customer loyalty • Market Basket Analysis Dimensions • Customer segmentation • Inventory optimization Even when everything works, data quality issues exist
  14. 14. Customer Segmentation, a journey • R li i Religious F ti l Festivals Indian shopping revolves around • Birthdays, Weddings and Anniversaries Multitude of f • S ll community i th east Small it in the t communities create • Traders linked to market pp opportunities movements • U t k higher with extended Uptake hi h ith t d d Customers like deals, timelines but … • Sometimes you also fall flat
  15. 15. Operational efficiency takes time (intuitive analytics) Intuitively there is a lot that can be done Customers do not buy based on our intuition Segment slow movers; focus on Out Of Stock Category analysis improves fill rates Availability drives sales y Beyond what, knowing why is important
  16. 16. Sample analysis of First Citizens Older customers buy more !
  17. 17. A Paradigm Shift Is your Analytics Team willing to take on revenue target ? Are you ready to accept the challenge ? y y p g
  18. 18. One view of the customer ? All of us are multi-faceted Privacy concerns pose challenges Pi h ll Demographic data gaps Business model defines correlations After you have the 1-view, what changes ? For you and the customer !
  19. 19. How have we benefited Consistent quality of data Information time to market improvements Statistical trend analysis Higher realization from First Citizens Segment-wise targeted marketing g g g Influence in store merchandise
  20. 20. Way forward Leverage • Operational efficiency insights to • Exclusive Merchandise sell through • Customer Service improve • Net Margins Financial Fi i l • Average Ticket Value and Net Weeks Cover metrics et cs • R Revenue growth th Revolution ? Evolution has higher possibility of success
  21. 21. Lessons learnt Find at least one business ally Vendors have SMEs too, get them All solutions work look at scalability work, Invest a lot in usability Be prepared for data quality surprises p p q y p Spreadsheets are here to stay
  22. 22. Questions ? Q ti Oh I See: htt // i i S t d bl t g p @ pp p Thank you