IOD 2013 3683 Post_Russell v2 5

Session Number 3683

Paula Post, The Bon-Ton Stores, Inc.

Dan Russell, Armeta Solutions, Inc.

Bon-Ton Department Store Chain

Enables Merchant Organization with

First-Class Analytics

2 By Merchants. For Merchants.

S t r a t e g i c

M e r c h a n t

A n a l y t i c s Table of Contents

Introduction to The Bon-Ton Stores & Armeta Solutions

Assessing the State of Analytics at Bon-Ton

Building a Roadmap to Success – “By Merchants. For Merchants.”

Delivering Analytic Tools to Empower the Entire Org Chart

Q & A


S t r a t e g i c

M e r c h a n t

A n a l y t i c s

The Bon-Ton Stores, Inc.

Department store chain (est. 1898)

Currently 272 stores in 25 states

7 nameplates total

Recent growth via acquisitions

• 2003 Elder-Beerman

• 2006 Carson’s, Bergner’s, Boston Store,

Herberger’s & Younkers

Paula Post – Group VP of Merchandise Optimization

Bon-Ton Locations


S t r a t e g i c

M e r c h a n t

A n a l y t i c s Bon-Ton’s Market Positioning

The hometown store

Fashion-forward brands

Upscale presentation

High level of service


S t r a t e g i c

M e r c h a n t

A n a l y t i c s

Focused Exclusively on Analytics

• “This is what we do.”

• “Hybrid” resource that speaks technology but thinks business

Analytics Specific IP

• White Paper – Democratization of Information

• MILESTONE – Analytics Assessment Engine

• RAS – Retail Analytics Suite

Extensive Retail Experience

Armeta Solutions, Inc. Dan Russell – Director, Client Engagement


S t r a t e g i c

M e r c h a n t

A n a l y t i c s





Q & A

Table of Contents


S t r a t e g i c

M e r c h a n t

A n a l y t i c s The Old General Store

The general store owner knew

everything around him:

He knew his customers

He knew his store

He knew his products

He knew his business

The Ultimate in Customer and Product Intimacy


S t r a t e g i c

M e r c h a n t

A n a l y t i c s The Effects of Mass Production

The Low Cost Provider Model Changed

Everything

Economies of scale became the core

business driver

Standardization was repeatedly stamped

out across every local market

Needs assessment and new product

awareness became the consumer’s

responsibility (rise of “caveat emptor”)

Bon-Ton affected both through growth and

consolidation of buying offices across

nameplates

Local level of customer and product intimacy

largely lost as retail landscape evolved


S t r a t e g i c

M e r c h a n t

A n a l y t i c s

Do more with less by enabling

merchants with proper mix of analytic

tools

Get back to the local level of intimacy

that the general store manager had

in previous generations

Reconnect with customers alienated

by the changes that resulted from

acquisitions and standardization (and

win new ones)

Leverage Technology to Drive Intimacy and Reconnect with Customers

Leveraging Technology to Reconnect


S t r a t e g i c

M e r c h a n t

A n a l y t i c s Assessing the State of Analytics

In early 2013, a team from Armeta Solutions led a 12-week engagement

with the following goals:

Assess Bon-Ton’s analytic culture

Evaluate the technical components currently used to deliver reports

Set a vision for the future of analytics at Bon-Ton

With the assessment complete and the vision in place, the project

culminated with the completion of the following:

Develop a set of tenets to guide decision-making

Create a roadmap to achieve the vision of “Strategic Merchant Analytics”


S t r a t e g i c

M e r c h a n t

A n a l y t i c s Key Finding: Merchants Overloaded with Data

Everyone is very busy compiling reams of reports, slicing the business from every angle,

often every single time

Each buying office talks about how their business is unique

Yet, there is lack of corresponding growth in business

Item

Analysis

Reporting

PO Log

Financial

Reporting

Stock Ledger

Reporting XLS-based

Planning

Tools

Data Dump

Mechanisms

Reporting

Standard-

ization

Other

Power User

Tools

Plus “one-offs”: • Web uniqueness

• Individual sources

• Unique Excel lookups

• etc.


S t r a t e g i c

M e r c h a n t

A n a l y t i c s Key Finding: Data Dumps, Not Analytics

Existing reports were difficult to execute and returned huge data sets that were normally dumped into spreadsheets for further processing

Examples


S t r a t e g i c

M e r c h a n t

A n a l y t i c s The Bon-Ton’s Analytics Maturity

Apathetic

TODAY

Report on Everything – Analyze Little

FUTURE Information as a weapon

Laggard

Reluctant

Middle of the Pack

Fast Follower

Reaching for the Top

Visionary

Tip-Toe In Pragmatist

Up and Coming

Analytics Maturity Model



S t r a t e g i c

M e r c h a n t

A n a l y t i c s Technical Assessment

Major components to facilitate building of first class analytics were already in place

• Properly sized data warehouse appliance (IBM PureData N1001-10)

• Enterprise business intelligence software

• Plus, implementation of IBM Sterling Order Management system was already in-process to

ultimately enable better management, visibility and reporting on orders

However, performance issues with existing reports were substantial

• Up to 10% of report requests were “timing-out” on a typical Monday morning

• Poor performance was exacerbated by concentrated concurrent use at peak times

Performance concerns needed to be alleviated immediately in order to allow

for the addition of new, interactive capabilities


S t r a t e g i c

M e r c h a n t

A n a l y t i c s Technical Assessment

Analysis uncovered opportunities for improvement on the configuration and tuning

of the PureData system and reporting software

• Data model with inconsistent design had been recently ported over as-is from HP Neoview

hardware

• While the data model worked on the PureData platform, it had not been tuned to take

advantage of the new architecture

• Even so, performance gains at initial migration to PureData were substantial enough such

that no further investigation was done at the time to optimize and prevent further “design

rot”

• SQL generated by the reporting tool was often not accessing data in alignment with the way

it was distributed across nodes and organized within

With alterations to report configuration as well as the re-organization of data on

the PureData system, performance was quickly brought to acceptable levels

• All “time-outs” were eliminated and overall performance increased by 5 to 10X

No major obstacles were determined to stand in the way of delivering new

capabilities on existing platform


S t r a t e g i c

M e r c h a n t

A n a l y t i c s What Was Missing?

All of the right components appeared to be in place…

• PureData data warehouse appliance on new MPP technology

• Advanced reporting/BI software

…Yet merchant reporting was completely ineffective

Merchants were forced to make decisions without:

• Actionable insights

• Interactive “speed of thought” analysis

• Information at their fingertips (immediate and easy)

Stores were being merchandised the same despite obvious variances in

customer preferences across regions, nameplates and other distinctive factors

• Consolidation of buying offices across nameplates had led to homogenization

• The ability to intelligently cater to different store groups was very limited

Merchants were not enabled with the proper mix of analytic tools


S t r a t e g i c

M e r c h a n t

A n a l y t i c s Lessons Learned from the Web Revolution

Well-designed analytic tools should be just like any great website

• Asking merchants to access sales data is comparable to asking an

untrained customer to access your product inventory via a web browser

• There will be no adoption without a well-designed, user-engaging and

interactive experience

Great web design requires a savvy resource that speaks technology but thinks

business

Similarly, analytics requires that “hybrid” resource to set vision, design

interfaces, consider process integration and put the rubber to the road

Building a Website Building Analytics

Key Components: Web Server & Browser Data Warehouse &

Reporting Tool

Engaging Factor: Intelligent web design < missing >

End Product: Engaging, interactive website Strategic Analytics

Building great analytic tools should parallel the process of building a great website


S t r a t e g i c

M e r c h a n t

A n a l y t i c s Enabling Merchants with Proper Tool Mix

The Core User * • Common business analysis • As easy to use as the internet

The Power User • “One-off” analyses • Excel jockeys & query tools

The Scientist • Science projects • SQL and SAS tools

Lack of appropriate analytic tools was forcing core users to instead

attempt to utilize tools suited for power users – a need was identified

to deliver new capabilities to enable the core 80% of merchant users

*


S t r a t e g i c

M e r c h a n t

A n a l y t i c s





Q & A

Table of Contents


S t r a t e g i c

M e r c h a n t

A n a l y t i c s “By Merchants. For Merchants.”

Consistent merchant involvement key to driving adoption and successful

change management

Not just involvement, but ownership – all key design decisions made by

representative group of merchants

All levels of the org chart involved to ensure consistent buy-in and

support

Group Meeting Purpose Frequency

Merchant Design Team Requirements, design and testing Weekly

Key User Reps Design tweaks and validation Monthly

Steering Committee Executive strategy and prioritization Bi-monthly

Entire Merchant Org

Overviews, release previews and new

tool introductions

Quarterly


S t r a t e g i c

M e r c h a n t

A n a l y t i c s Educating Merchants on Analytics

The right

Product

…at the right

Price

…at the right

Place

…with the right

Promotion

The 4 P’s of

Merchandising

The right

Information

…at the right

Frequency

…to the right

Person

…with the right

Presentation

The 4 Goals of

Analytics Example:

All products 50% below plan

… at the beginning of each day

… to the Merchant

… in a PDF on the iPad/ laptop


S t r a t e g i c

M e r c h a n t

A n a l y t i c s

Using analytics to answer everyday questions:

Where did the Packers go wrong in 2012?

Goals:

1. Demonstrate the difference between

“data” and “information”

2. Illustrate the meaning of “easy to use”

and establish a litmus test for what a

“proper tool” should look and feel like

Establishing a Vision for the Merchants


S t r a t e g i c

M e r c h a n t

A n a l y t i c s

Tons of Data

(every NFL play from 2012)

…but it also takes a ton of

effort to find the usable

information buried within

Using a Spreadsheet Full of Data


S t r a t e g i c

M e r c h a n t

A n a l y t i c s

Ranking Builds context,

relevance

Visualization At a glance,

the message is obvious

Top/Bottom Performers Impact players always top of mind

Easy-to-use website full of information

Analyzing your own business should

be as easy as checking up on your

favorite football team


S t r a t e g i c

M e r c h a n t

A n a l y t i c s

Performance Trend

Monday Morning – Pulse Check

Performance by Store Profile

+5.7%

Sales v LY

24.4%

RP Sell Thru

15.9%

GM

8.1%

eComm %

Top Sellers 1.

2. Pant Separate (Vendor A)

3. Billowy Blouse (Vendor B)

4. Bling-Back Jeans (Vendor C)

5. Pocket TShirt (Vendor D)

Three Quarter

Sleeve Cardigan

(Vendor A)

$120.00 / $59.99

Sls WTD: $ 3,226

Sls STD: $17,482

RP Sell Thru: 56%

Low Stock Warning 1.

2. Sun Dress (Vendor A)

3. Billowy Blouse (Vendor B)

4. Bling-Back Jeans (Vendor C)

5. Pant Separate (Vendor A)

Classy Pencil

Skirt

(Vendor E)

$170.00 / $68.00

Sls WTD: $ 2,136

Sls STD: $ 4,482

RP Sell Thru: 62%

Sales Analysis Inventory Management Vendor Spotlight

0

100

200

300

400

500

600

Large Stores Medium Stores Small Stores

This Year

Last Year

(Net Sales Dollars in thousands)

0

500

1000

1500

2000

5/27 - 6/2 6/3 - 6/9 6/10 - 6/16 6/17 - 6/23

Actual

Plan

LY

(Net Sales Dollars in thousands)

Hierarchy Level: DMM2 Timeframe: STD

Profile Type: Store Size

Name Plate

Competition

Imagine Bon-Ton analytic tools

“as easy to use as the internet”


S t r a t e g i c

M e r c h a n t

A n a l y t i c s Statement of Vision

“Improve business performance by creating a highly adopted, merchant-designed reporting system that reveals insights and enables actionable data-driven decision-making via world class analytics”

– created by the merchant team


S t r a t e g i c

M e r c h a n t

A n a l y t i c s Tenets to Guide Progress

Easy to Use New capabilities should be as easy to use as the internet – this simple litmus test will be used to assess usability and ultimately drive high adoption rates

Designed by Merchants Consistent involvement from merchant representatives is required to ensure success – an informed proxy must be sent when an absence is unavoidable

Built for Viewing, Not Printing Focus of new development will be to create analytic tools that are visual and interactive – legacy systems may continue to be used to satisfy print requirements

Visual in Nature Relevant information should jump out at the user – there should be no requirement to dig through countless rows and columns to answer simple business questions

New Merchant Reporting Capabilities Will Be …


S t r a t e g i c

M e r c h a n t

A n a l y t i c s Tenets to Guide Progress (continued)

Focused on Insights Insights and exceptions will be valued over comprehensive detail – legacy systems may continue to be used until new capabilities ultimately satisfy all requirements

Merchant Focused The needs of the merchant organization will be the top priority – consideration will be given to the needs of other groups but should not impede rapid deployment

Delivered with Speed New analytic capabilities accurate enough to support directional decision making will be deployed – perfection will not be required to proceed

Released Iteratively It is better to deliver analytic insights quickly rather than pursuing an all-encompassing release – utilize time-fenced approach over traditional methods

New Merchant Reporting Capabilities Will Be …


S t r a t e g i c

M e r c h a n t

A n a l y t i c s Inputs to the Strategic Roadmap

Interviews

Workshops

Strategic Roadmap

Stakeholder

Input

Technical

Assessment

Prioritization

Exercises

Cross-Industry

Best Practices

Strategic

Framework

Armeta’s

Experience


S t r a t e g i c

M e r c h a n t

A n a l y t i c s

Sales Performance

Store Insight

Revamp Attributes

Pricing / Markdown

Sales II

Strategic

Roadmap

The Strategic Roadmap

Revamp Hierarchy

Inventory II

Store II

Inventory

Vendor

Q1 Q2 Q4 Q2 Q3 Q4 Q1 Q1

2013

Q2

2014

Q3

2015


S t r a t e g i c

M e r c h a n t

A n a l y t i c s

Sales Performance

Store Insight

Revamp Attributes

Pricing / Markdown

Sales II

Strategic

Roadmap

Revamp Hierarchy

Inventory II

Store II

Inventory

Vendor

Q1 Q2 Q4 Q2 Q3 Q4 Q1 Q1

2013

Q2

2014

Q3

2015

Progress Along Roadmap

Ove

rall

Usa

ge o

f A

nal

ytic

s

New Releases 1 2 3 4 5 6 7

Merchant Analytics Usage Over Time

= Existing Reports

= New Analytic Capabilities


S t r a t e g i c

M e r c h a n t

A n a l y t i c s





Q & A

Table of Contents


S t r a t e g i c

M e r c h a n t

A n a l y t i c s Mapping Tools to Key Business Questions

“How are we performing?”

Pulse Check Visual dashboards that answers high-level business questions at a glance

“What is driving business up/down?”

Business Drivers Ranked exception reports that let you know which factors are driving your business

“What actions can I take to affect change?”

Spotlight Focused dashboard that provides detail you need about a specific thing in order to take action

Key Business Question SMA Tool Type


S t r a t e g i c

M e r c h a n t

A n a l y t i c s “Pulse Check” Dashboards


S t r a t e g i c

M e r c h a n t

A n a l y t i c s “Business Driver” Reports


S t r a t e g i c

M e r c h a n t

A n a l y t i c s “Spotlight” Focus Dashboards


S t r a t e g i c

M e r c h a n t

A n a l y t i c s Continuing Down the Roadmap

The initial SMA release enabled all merchants with a new way to easily

analyze the performance of their business

With the new framework now in place, subsequent releases will be

focused to deliver additional insights aligned with key corporate initiatives

The current release will uncover opportunities that exist to treat store

groupings differently in order to better connect with customers and drive

profit

Future releases will soon be executed to manage inventory more tightly,

build stronger relationships with vendors and optimize pricing and

markdown strategy

Less than a year into the new strategic roadmap, technology has already

been successfully leveraged to provide merchants with easy-to-use,

insightful analytic tools that are helping them to connect with customers,

drive sales and boost profit


S t r a t e g i c

M e r c h a n t

A n a l y t i c s





Q & A

Table of Contents


S t r a t e g i c

M e r c h a n t

A n a l y t i c s Contact Information

Paula Post

• Group VP of Merchandise Optimization

• The Bon-Ton Stores, Inc.

• [email protected]

Dan Russell

• Director, Client Engagement

• Armeta Solutions, Inc.

• [email protected]

mailto:[email protected]

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IOD 2013 3683 Post_Russell v2 5

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Transcript of IOD 2013 3683 Post_Russell v2 5