This document summarizes a presentation about using predictive analytics to improve retail performance. It introduces Celect as a predictive analytics platform focused on retail. It also introduces Kurt Salmon as a consulting firm providing analytics services. The presentation discusses how emerging technologies and analytics can transform retail operations through precision, personalization, prediction and automation. It provides examples of how predictive analytics using customer context and choice modeling can help with assortment planning, inventory allocation and understanding true customer demand.

1. Embrace Analytics
DramaticallyImprove Retail Performance
with special guest:

2. Welcome!
Todd Harris
Director of Marketing
@ Celect
Vivek Farias
CTO, Co-founder
@ Celect
Paul Schottmiller
Partner, Retail and
Consumer Goods @ KSA
© 2016 Celect, Inc. All Rights Reserved.

3. An Intro to Celect
• Who we are
‒ Predictive analytics (SaaS) platform focused
on the retail sector
‒ Based in Boston, MA
‒ Venture-backed, award winningtechnology
out of MIT
• Awards & Recognitions
‒ MIT Computer Science and Artificial
Intelligence (CSAIL) Top 50 Greatest
Innovations
© 2016 Celect, Inc. All Rights Reserved.

4. Kurt Salmon’s Analytics Services
help clients infuse analytics to
transform business processes
with actionable insights that
solve hard problems and unlock
new opportunities across the
consumer goods value chain.
Unparalleled insights delivered to
retail and consumer companies with
a heritage of thought leadership
Expertise across the value chain,
from growth strategy to execution
Global consumer and retail industry
practice with consultants across
three continents
Over 80 years of delivering
performance enhancing strategies
Specialized.
Integrated.
Proven.
Global.
An Intro to Kurt Salmon
© 2016 Celect, Inc. All Rights Reserved.

5. Emerging tech +
analytics
• Volume, Velocity,
Variety
• Connectivity - Moore
+ Metcalf + Cloud
• AI
• Machine Learning
The opportunity …
• Precision
• Personalization
• Prediction
• Automation
Challenge is the same
• Right product
• Right place
• Right time
• Right price
A Transformed Competitive Landscape
Gartner predicts that by 2020, more than 75 percent of organizations will deploy
advanced analytics as part of a platform or analytics application to improve business
decision-making. Companies are accelerating the shift in focus of their investments from
measurement to analysis, forecasting and optimization.
© 2016 Celect, Inc. All Rights Reserved.

6. Operational and Financial Performance
Forecasting
Consumer Insights
Merchandising,
Planning, and Buying
Product Design &
Development
Sourcing Distribution & Logistics Channel Operations
Marketing/Promotion
Physical Flow
Data Driven
Decision Making –
5 Key Areas
Create/Buy More Winners
Sample Less
Shorten Leadtimes
Sell More
Markdown Less
Increase Loyalty
Next Generation
Performance
Reduce Costs
Automate Decisions
Increase Operating Margin
Allocation, Replenishment, Flow
Precision, Prediction, Personalization, Automation
© 2016 Celect, Inc. All Rights Reserved.

7. Tough Problems, New Opportunities
› Store replenishment
› Speed of delivery vs.
shipping cost
› Fulfillment
leveraging all
channels
› Localization
› Winners vs. losers
› Optimal store
assortment
Marketing & Consumer
Insights
Product Development
& Merchandising
Sourcing &
Supply Chain
Channels
› Customer’s lifetime
value
› Customer’s
profitability
› Optimize marketing
/ media spend
› Potential out of
stocks
› Traffic by channel
and location
› Personalized
interactions
© 2016 Celect, Inc. All Rights Reserved.

8. Effectiveness
Revenue: 7-12% increase
Gross Margin : 6-8%
increase
Time to Market: 30-40%
decrease
Efficiency
SG&A: 5-15% decrease
How Big is the Opportunity?
Operating Margin: 25-40% increase
Precision, Prediction,
Personalization Automation
© 2016 Celect, Inc. All Rights Reserved.

9. Innovating Requires a Business Value Focus
• Business value driven vs. technology driven
• Test and learn approach
‒ Speed wins
‒ Failure IS an option
‒ Tinkering is good
‒ This is not ERP
• Data quality is critical
• Cross organizational sponsorship is required
Shiny Objects
© 2016 Celect, Inc. All Rights Reserved.

10. Predictive Analytics
Using Context & Choice to
Understand True Demand
© 2016 Celect, Inc. All Rights Reserved.

11. The Power of Context …
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12. Reveals Answers
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13. Context is Everywhere
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Context highlights answers …
… and context is everywhere in your data.

14. © 2016 Celect, Inc. All Rights Reserved.
A Choice Model tells you what a
customer would prefer to buy when
given the choice.
Today, you only know what a
customer bought
Understand True Demand
• We sold out of a particular product
in Store 28 à What was the right
allocation?
• We have never sold a particular
product in Store 58 à How well
would it sell there?
• We are lookingto add a new brand
in to a set of stores à What impact
will that have on store sales?

15. What to place in Store 113 vs Store 127?
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16. Example: Traditional Store Clustering
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Cluster 4
Cluster 1
Cluster 2
Cluster 3
Cluster 5
What Is The Operational Value of This?

17. Clustering and Assortments via Choice Modeling
• Build representative customer choice models for every store
• Cluster stores based on choice
‒ Limited number of localized assortments = Easier Ops
‒ Easy to interpret from an operational perspective
• Optimize assortments to a cluster
© 2016 Celect, Inc. All Rights Reserved.
Celect gives you insight into true demand.

18. Assortment Recommendations
© 2016 Celect, Inc. All Rights Reserved.

19. Celect Optimization Platform
© 2016 Celect, Inc. All Rights Reserved.

20. Thank you!
Visit www.celect.com for more!
Subscribe to our blog
blog.celect.com
Twitter:
@celect
@KSRetail
© 2016 Celect, Inc. All Rights Reserved.