STORES Magazine - October/November 2017 - 45
is enriching customer insight
and helping you understand
what's driving sales," he
says. "That's especially
true in electronics, since
consumers often put a lot of
thought into those buying
focuses on customer
analytics, figuring out what
kind of product mix or
offers work for a market
segment. It's a critical
function for a business trying to integrate
various retail acquisitions. Morris used
econometric models to simulate how
particular items would do in a location,
trying to see if a particular trial offer was
effective for certain consumers.
The difficulty in getting accurate
analytical data in retail is that there
are so many variables. A product test
at a handful of stores may be affected
by rain at one and road construction at
another. One store may be more crowded
than another because of an unrelated
promotion, which skews the sales figures.
For data professionals like Morris,
the secret to successfully determine if
a marketing promotion is working is
weeding out the "noise" of unrelated
variables to figure out the impact of
Using his own algorithms and inputs
on transaction data to calculate expected
sales, the results Morris received were
accurate; however, "they were longwinded and took time to develop," he
says. "We saw we needed something
faster that could be acted upon very
The company had done some work
with Applied Predictive Technologies
in the past and contacted APT to help
streamline its analytics operation. "We
were measuring lots of different product
trials, and the challenge was how to get
a clear response to whether a particular
trial was working and why," Morris says.
Using APT's software, the company
could remove unrelated factors affecting
a trial the way one peels away an onion.
make these kinds of decisions
is a good way to reduce your
"We could input the data and quickly see
what aspects of a trial were working and
which were not," he says.
A UNIFIED SYSTEM
A challenge for many businesses is that
different departments will often have
their own analytical experts calculating
the same data. "It's not uncommon to
have executive teams working on similar
issues and getting different answers
based on their analysis," says Rupert
Naylor, senior vice president of European
operations for APT.
"This can lead to confusion in the
company as to what to do. It's much
easier if there's a unified, reliable system
you can depend on."
It can also be affected by departments
or executives that find it hard to trust
an analytical view of a possible trial,
preferring to base decisions on a "gut"
"You can't put a value on experience,
and many professionals will have a good
sense of how a promotion will go,"
Naylor says. "On the other hand, it would
be better to wed that experience with
hard data to show there's a likelihood of
success or failure."
Naylor surveys retailers to ask how
many of the marketing trials they've
tested over the past year broke even. "I'm
not asking if they didn't meet ROI targets,
I'm asking how many at least maintained
corporate value," he says.
"Among retailers, we find that about 44
percent of tested trials don't break even,
which means that going by your 'gut' to
For Dixons, one of the big
first tests of the APT system
was to see how it would
work with proposed product
delivery times. Fast delivery
is critical to any retailer, and
free or extremely low-cost
delivery is often expected
by consumers. Information
about delivery rates, types
and slots was fed into the
software, along with data about customer
"What it did was show us how to
prioritize capacity at busy times," Morris
says, "and ensure that the greatest
number of customers were getting the
best value they could receive at the lowest
delivery cost for us."
With the integration of Carphone
Warehouse and Currys stores into the
Dixons operation, the company had
to deal with combining various types
of store footprints as well as employee
training and business goals. "We could
see information about what types of
stores did best in certain areas and look
at the impact of employee training to see
how best to create a uniform, Dixons
experience," Morris says.
As use of APT began to become more
widespread in company's headquarters,
Morris saw colleagues in other
departments becoming increasingly
interested in analytics. "In meetings people
began using the term, 'Let's APT that
information,' using it as a verb," he says.
"Then I knew we were on the right track."
Looking ahead, Dixons is checking
into how to use the tool for different
segments of customers and finding ways
to differentiate its consumer base even
more. "The more we can know about our
customers and what motivates them, the
better we can serve them and affect our
business," Morris says.
John Morell is a Los Angeles-based writer who
has covered retail and business topics for a
number of publications around the world.
STORES October/November 2017 45