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Making sense of big data at redbox


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Making sense of big data at redbox

  1. 1. SXSW 2014 Making Sense of Big Data at North America’s Largest Retail Network Matt James Sr. Director, Strategy & Analytics at Redbox Andrew Thompson Analyst, Strategy & Analytics at Redbox
  2. 2. our company our team our presentation Redbox is a fully automated video rental store contained in 12-square feet of retail space. Renting more than 3 billion discs to date, Redbox is America's destination for movies and video games. There are more than 36,000 Redbox locations nationwide that feature upwards of 200 titles and 630 discs. More than 68% of the U.S. population live within a five-minute drive of a Redbox kiosk. Redbox is where America rents movies and games. The Strategy & Analytics team at Redbox exists to answer the most important strategic questions about our business. Data-driven decision- making is built into Redbox’s DNA. Led by Matt James, the S&A team analyzes all inventory, transaction, location, and operations data for the US and Canada and turns that into meaningful insights. Like any retailer, Redbox is constantly optimizing its physical footprint to ensure placement in the best locations possible, providing the most convenient customer experience. This presentation will explore how internal big data modeling, combined with rich third-party datasets have transformed the way Redbox approaches its location strategy. The presentation will include many examples of how the Strategy & Analytics team at Redbox uses Tableau to reach new insights and empower collaboration and decision-making across a broad audience throughout the company. overview
  3. 3. Introduction Redbox by the Numbers Redbox is a data geek’s dream – we have stats and metrics that quantify every aspect of our operation. The audience may be familiar with their local Redbox kiosk, but understanding just how ubiquitous Redbox has become requires some context-setting. Sure, there are the highlights: 3B+ rentals to date, 20M+ unique credit cards renting at our kiosks per month, but there’s more intriguing stuff than what makes it into quarterly reports. In 2012, the average Redbox kiosk brought in just under $4,000/sq. foot – outranked only by Apple’s retail locations1. That’s pretty amazing considering Redbox rents movies and video games for $1.20- $2.00/night and the Apple store sells iPads, iPhones and Macs for $300- $3,000. agenda pt i Location Story Early Days Most people are shocked to learn Redbox turns 11 years old in 2013. Today, our 43,000+ kiosks are in all 50 states, Puerto Rico, and recently landed in Canada – but the first ¾ of our life as a company was a test- and-learn process, exploring and perfecting our model for the massive growth in locations from 2009 to present. Redbox emerged from McDonald’s Ventures in the early 2000s as a way to drive traffic to McDonald’s restaurants. Outerwall (formerly known as Coinstar Inc.) took an equity stake in Redbox and it became a private company. The relationship with Outerwall enabled Redbox’s expansion outside the QSR channel. 1 Apple 2012 Retail Sales per Sq Ft $6,050 – RetailSails 2012 Chain Store Productivity Guide Redbox 2012 Retail Sales per Sq Ft $3,965 – Outerwall Q4 2012 Segment Supplement.
  4. 4. Location Story Getting to Scale In 2009, Outerwall purchased the remainder of Redbox. The acquisition further accelerated Redbox’s presence in the grocery, drug, convenience, and mass channels. In 2012, the company made its final push to full-scale, acquiring the Blockbuster Express kiosk business operated by NCR and expanding into the dollar channel. Today, consumers know and love the Redbox brand – they also understand that our kiosks can be found at all their favorite retail locations. More than 50% of the discs rented at Redbox are returned to a different location than where they were rented. agenda pt ii Location Story Optimization All retailers are concerned with maximizing the productivity of their physical assets – for Redbox, those are kiosks and discs and their respective productivities are completely interdependent. A kiosk without discs can’t make any rentals and discs can’t magically rent themselves. In 2012, the S&A team undertook a project to finally understand how these two factors related to one another leading to a breakthrough metric for location productivity. The new metric led to a fresh client engagement approach and became a case study for intuitively communicating data across the Redbox organization.
  5. 5. Location Story To Infinity and Beyond… With a firm grasp on how each kiosk performs individually, the S&A team set out to understand how each kiosk related to one another and the extent to which accretion and cannibalization play a role in the productivity of each location. The trade area of each Redbox location has evolved along with an understanding of the business – beginning with as- the-crow-flies distance, moving to drive time trade areas, and finally to mini-networks of related kiosks defined by transactional data. We look to our customers’ behavior to tell us how we can be even more convenient. Being in the right locations should enable Redbox to continue to offer affordable entertainment to millions of more customers for years to come. agenda pt iii Redbox network July 2013, significant kiosk relationships in Austin, TX market