Stores Magazine - November 2007 - (Page 110) CONSIDER THIS/ POINT OF VIEW Merrier Retailing through Technology BY JEFF LEVITAN The holidays are a critical time for retailers, who traditionally make 40 to 60 percent of their annual profits during the season. Given this pressure to perform flawlessly, it’s little wonder retailers are turning to retail technology, specifically in the area of advanced analytics, to bolster their innate merchant savvy and give them an edge. The holidays offer unique challenges in scale, volume and assortments. Retailers find themselves working with unfamiliar products during the holidays; food retailers may carry more general merchandise and soft lines, and department stores include more food items. Creating holiday collections across products and categories and optimizing allocations and pricing are just three examples of areas where advanced analytics can drive sustainable improvements. community with guidance that their use of advanced analytics will provide as much as 40 basis points of gross margin improvement to the corporation,” says Lori J. Schafer, executive advisor to the SAS Global Retail Practice. New faces in the executive suite Advanced technology brings a broader group of retail executives into the decision-making process. The CEO, the executive vice president of merchandising and others in the execuJeff Levitan is general tive suite have made important decisions for Spotlight on retail technology manager of SAS Global years, but the importance of advanced analytThe brand, the experience and the merchan- Customer Intelligence and ics brings in other retail executives to share the dise still are the key variables that help new re- Retail Solutions. spotlight. tailers emerge, existing retailers thrive and sucAt leading global retailers, we’ve seen the cessful retailers take their successes to new heights. CFO or finance director taking center stage in demanding Consider Kohl’s. To describe Kohl’s as a growing familyinvestments in technologies such as revenue optimization. oriented discount department store chain captures none of We also have observed this trend among private investors the excitement of the company and its stores. Kohl’s recent and private equity firms, many of which immediately invest launch of exclusive brands such as Simply Vera by Vera in advanced analytics to increase a company’s valuation. Wang and apt 9, is the talk of Wall Street. Also contributing to the collective decision-making Kohl’s also is receiving attention from the financial comprocess is the chief marketing officer, often an executive munity for more than its merchandise mix: the Wisconsinwho holds the key to a retailer’s “soul” in the minds of conbased company is now known for its visionary leadership sumers. As customers become more sophisticated and rein leveraging advanced analytics to get the right products tail outlets grow and merge, valuable, actionable data asto the right stores at the right price. sumes staggering importance. The CMO’s team provides One of the best ways to understand how Wall Street focustomer insights that, when married to merchandise intelcuses on advanced analytics is to look at reports from filigence technology, have the potential to make the differnancial analysis firms such as Citigroup and A.G. Edwards. ence between a profitable year and a disappointing year. These analysts discuss the importance of key technologies The needed edge like markdown optimization, assortment planning, allocaWe salute those executives who are bold enough to take tion and size optimization. Both firms zeroed in on what a chance on advanced analytics — those leaders who may Kohl’s is doing with this technology, and they issued rebecome retailing legends. ports that were optimistic about the impact the right techVisionaries like these refuse to stay in a safe businessnology was making on the retailer’s financial performance. as-usual world when technology can help them realize a In January, A.G. Edwards upgraded its ranking of Kohl’s retailing wonderland waiting to delight customers, improve based on the retailer’s processes and improvements, writing margins and propel profits to new heights. If you find that “Current key initiatives in the overall area of inventory manyour company’s 2007 holiday season wasn’t as “merry” as agement include implementation of a SAS-provided markyou were hoping, now is the time to begin putting the tools down optimization package providing real-time recommendain place that will make 2008 your most profitable holiday tions as to the timing and depth of clearance markdowns.” season ever. At SAS, “We’ve seen retailers provide the investment 110 STORES / NOVEMBER 2007 WWW.STORES.ORG http://WWW.STORES.ORG
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