BUSINESS ANALYTICS

A Retailer Learns Data Is Just Data Without Analytics

Judy Hogan | Date: 01-27-12 | Comments

Collecting data is a great thing, but if you can�t parse it for business-strategy needs, it�s a useless effort.

What�s the value in collecting, organizing and sharing data if that�s as far as you can take it? There's very little value, basically.

Collecting, organizing and sharing data are key parts to a data-analysis strategy, but if the analysis aspect is barely touched, then there is no benefit to the upfront effort.

That was the scenario facing a small Australian retailer when it first began selling clothes in the late 1980s. City Beach, based in Brisbane, Queensland, is now a thriving independent operation with 62 stores across Australia and a booming online sales store.

Back then, the retailer had manual, employee-driven processes in place for collecting insight on sales. This data-collection process took up 70 percent of the sales force�s time. Little time was left for actually understanding the data and then potentially using it to drive the business forward by changing processes, sales strategies and marketing efforts.

Given its growth, the store decided to find technology that could not only eliminate the upfront tasks but also provide the analysis piece. It chose to deploy IBM�s Cognos TM1 and 10 solutions with the help of performance-management vendor Bistech. In doing so it eliminated nearly 23 hours of data collation per week for each of the five sales managers and 35 hours required by the national sales manager.

But, just as importantly, the analysis aspect is now letting the retailer quickly respond to sales trends based on real data insight and not just store-management instinct. That�s huge considering City Beach changes its product mix on a daily basis, markets different items in windows every week and updates its retail image every two years.

The retailer is seeing big benefits even though right now it�s using just a fraction of the Cognos features and functionality.

Sales people are now doing what they were hired for�making sales happen on a regional and national level. And decision-making is now based on real knowledge and not anecdotal estimations.

Down the road, the store plans to use the system to measure employee-resource allocation and product sales times. Additionally, the system will be used in stock processing and transfer procedures from a compensation view, so that it can always have the most cost-effective staffing levels in place. That�s key given the diminishing margins and economic pressures in the retail space.

While it hasn�t formally measured the return-on-investment, it�s a no-brainer that having 20-35 hours a week now focused on actual sales efforts is driving the business forward and keeping it on a stronger revenue footing.