Businesses are inundated with options of vendors who provide analytical products. We're told in no uncertain terms that without real-time analytical capabilities we are being out- strategized, out-advertised and out-personalized with every passing second. "Real-time real talk" is a critical survey of real-time systems and their application in the areas of retail and marketing. We'll cut through the hype and get to the heart of what it means to be real-time, and explore some of the real-time systems being built today in the Nordstrom Data Lab.

1. Erin Shellman, PhD
@erinshellman
!
Marketing Analytics
March 18, 2014
real talk.
real-time

2. Hello.

5. real talk.
real-time
1. real-time - what?
2. real talk - look, baby.
3. Nordstrom - real good.

6. Big data was last year,
now we want fast data.

8. “…Real-Time Analytics is
enabling retailers and
brands to analyze the
right data in real-time to
generate solutions that
can be implemented
across an organization1.”

9. What is a real-time
system?
A real-time system is one that must
satisfy bounded response-time
constraints or risk severe
consequences, including failure2.

11. What is real-time
analytics?

12. In general, real-time analytics can
be defined as the use of, or the
capacity to use, available
enterprise data and resources
when needed3.

13. “It’s about moving with greater
speed toward previously unknown
questions, defining new insights,
and reducing the time between
when an event happens
somewhere in the world and
someone responds or reacts to
that event4.”
— Justin Erickson, Cloudera

14. “Typically when we’re talking about
real-time or near real-time
systems, what we mean is
architectures that allow you to
respond to data as you receive it
without necessarily persisting it to
a database first.”
— John Akred, Accenture

15. Real-time analytics
in the wild.

16. Williams Sonoma
integrates its customer
databases with external
demographics to
created targeted
emails.
e.g.

17. e.g.
Macy’s personalizes
their catalogs to the
point where they could
deliver 500,000
unique versions of a
single direct mail
catalog.

18. e.g.
Koupon Media built a
real-time dashboard
enabling them to
identify key attributes
of users who
participated in their
marketing campaigns.

19. Are any of these use-cases
meaningfully real-time?

20. Nope!

21. Nope!

22. Nope!
Real Talk!

23. 1. If you can’t act on it in real-time,
it’s not really real-time.

24. 1. If you can’t act on it in real-time,
it’s not really real-time.

25. 1. If you can’t act on it in real-time,
it’s not really real-time.
Real Talk.

27. “If you have people in the
loop, it’s not real-time.”
— Joe Hellerstein, UC Berkeley

28. 2. Real-time is not the
same as all-in-one-place.

29. 2. Real-time is not the
same as all-in-one-place.

30. 2. Real-time is not the
same as all-in-one-place.
Real Talk.

31. 3. Real-time systems fail
when messages are late.

32. 3. Real-time systems fail
when messages are late.

33. 3. Real-time systems fail
when messages are late.
Real Talk.

34. IBM helped German retailer
METRO boost customer
satisfaction by 18% with
intelligent dressing rooms
that detect the shopper's
current apparel selection and
make appropriate
recommendations for
accessories. e.g.

35. E-mail offers from Microsoft
to engage with Bing are
customized at the time of
opening. In 200 milliseconds,
an offer is assembled based
on the most recent customer
responses and the available
real-time information about
the current customer –
leading to up to a 70%
e.g. increase in conversion rates.

36. What’s the difference?
• Real-time systems are largely automated, end-to-end.
• Building real-time systems requires deep insight, and
not so much the other way around.
• Real-time analytics is not the push-button solution it’s
pitched as.

37. Recommendo 1.0

39. Recommendo 2.0
personalized recommendations in real-time!

40. Batch Real-time
Purchase history
Demographics
Category affinity
Brand affinity
Collaborative
Filtering
Items
Users 4 …
… 0
Clicks
Logistic
Regression
Recs Probability
Item 1 0.15
Item 2 0.01

41. Target
Product
Product-to-product Personalized Batch Session-driven
Reorder Reorder
Best sellers Prefers blazers Clicks red & orange
3 recs per page
1
2
3
4

42. What’s an enterprise to do?
• Be disciplined.
• Insight before automation.
• Fully invest in data technology!

43. Being data-driven is a hot phrase: but what
does it mean in practice? It’s not about
finding analytical fairy dust that you can
sprinkle to make everything better, but a
deep-rooted approach to operations,
innovation and competition. Creating an
organization designed for data-informed
decision—the experimental enterprise—is
the key to competing in a world that’s
being rapidly digitized.
— Edd Dumbill, Forbes

45. Thanks pals!
!
Sara Hogenson - Designer, Nordstrom Innovation Lab
Scott Jones, Prashanth Nair, Abid Saifee
The Advanced Analytics, Personalization, and Mobile Teams
Michael Draugelis - Lockheed
R. Kelly - Real talk

46. Learn more
1. PSFK Future of Retail trend report.
2. Laplante, Phillip A. “Real-time systems design and analysis.”
3. SAP: http://blogs.sap.com/innovation/analytics/real-time-data-analytics-09636
4. Barlow, Mike. “Real-time big data analytics: emerging architecture.”
5. Infochimps: http://www.infochimps.com/resources/koupon-media-case-study/
6. “Real-Time Retail: Rapid Response to Consumer Demand” from the International Institute for
Analytics’ Retail Analytics Research Council.
7. Dumbill, Edd. Forbes. http://www.forbes.com/sites/edddumbill/2014/02/05/the-experimental-enterprise/?
imm_mid=0b76e4&cmp=em-strata-na-na-newsltr_20140212_direct
8. Real talk: http://grantland.com/hollywood-prospectus/rethinking-r-kelly-a-fans-second-thoughts/

47. http://erinshellman.github.io/
real_time_real_talk/