Overview
Retailers have many things to consider: assortment, brands and private labels, category performance, promotions, pricing, margins, supply chain, store locations, and omnichannel. Customers are the key priority with the objective to increase customer satisfaction and sales. Getting a good understanding of customer needs and behaviors in an increasingly digital retail environment means that data and analytics are being used throughout retail organizations. Visual, predictive, and streaming analytics, including machine learning, provide opportunities to analyze customer and operational data. And to optimize these processes by acting on the insights gained. Spotfire® can help you build out a variety of retail solutions and in this article, we will provide you with some examples.
This article is relevant for retailers and manufacturers because preferred suppliers or category captains often have an advisory role towards retailers and expert category management insights are expected.
Spotfire® is used in CPG & Retail companies around the world selling products as well as services: Consumer Packaged Goods, Fashion, Beauty products, Electronics, Financial Services, Sports & Entertainment, and Travel to name a few.
Note that CPG or Consumer Packaged Goods is also referred to as FMCG or Fast Moving Consumer Goods
CPG & Retail Use Cases
Many things happen between a product being produced at a manufacturer site and the customer consuming the product. In order for products to be available in the stores physically or online, use cases such as demand forecasting and inventory management play a role. As well as supply chain optimization, with retailer and supplier collaboration being critical, and last-mile fulfillment. In managing and optimizing the sales process and performance of the stores, loss prevention, retail staffing, fraud detection, and customer service are examples of important use cases. Customer data is analyzed to improve the customer journey and provide personalized marketing and next best actions. These use cases and others, when executed well, increase customer satisfaction and ultimately sales.
Category Management
Category Managers, Trade marketers, Buyers, Promotion Planners, Brand Managers, and Sales Managers are all involved in the category management process. This involves understanding the role of the category for a specific retailer and in the market and deciding on strategy and tactics to grow the category. Agreeing on KPIs and targets related to product assortment, promotions, position on the shelf and new products is part of the process. And monitoring category performance through the agreed KPIs as well as price and margins is essential. This is most effective with transparent interactive dashboards with the consistency of data and metrics where appropriate. This is a collaborative process between retailers and manufacturers. In the customer stories section with links provided at the bottom of this article, you can read about some specific examples on how our customers use interactive dashboards to create and share insights on assortment and sales.
Customer Analytics
Customer Analytics covers use-cases, templates, and examples of customer analytics such as customer & product segmentation, affinity and propensity modeling to improve campaigns and to identify cross-sell and up-sell opportunities, A/B testing to optimize marketing campaigns or Net Promotor Score (NPS) analysis which is a measure of your customers' overall loyalty to your company. Customer Analytics is about gaining and retaining customers and about understanding your customers' Life Time Value (LTV) and increasing it where appropriate. Real-life customer stories can be found at the bottom of the article with examples of implementations for retail banking, outdoor retail, and telecommunications.
We have created an example of a product recommendation tool. The use case is customer analytics or personalized marketing. The example is retail, but it applies to any industry dealing with customers and purchases of products and services - such as retail banking, travel, entertainment, and also B2B.
In terms of data science techniques, you will see RFM (Recency, Frequency, Monetary) and Customer Lifetime Value (CLTV) to segment customers, combined with Market Basket Analysis to recommend a product as Next Best Action. With these recommendations, you can increase customer sales and reduce customer churn.
This tool was built using a big data set of customer-level sales data from an online retailer selling a variety of household products. Using Spotfire®, integrated with Spotfire® Data Science - Team Studio. Spotfire® acts as the cockpit and Spotfire® Data Science - Team Studio as the engine, pushing out data science models to Spark and computing in-database without having to move the data.
We have created the following assets for you to use:
- Demo on the Spotfire® Interactive demo gallery
- YouTube video with a walk-through of the demo
- Template on the Spotfire® Community Exchange to use this example with your own data
- Tutorial explaining step by step how this template works
Omni-channel
In this demo of an omnichannel customer journey for a Telco product, you can see how understanding and being able to interact directly with the buying journey allows for the retailer to act pro-actively and with increased flexibility to customer needs whilst taking into consideration relevant stock restrictions, pricing, customer history, etc. Find more details in this article.
A frequently used technique to visualize an omnichannel customer journey in Spotfire® is the Sankey diagram.
Manufacturing
The Manufacturing Solutions Hub covers relevant use cases such as Product Quality, Predictive Maintenance, and Process Control
Supply Chain Optimization
The overall objective in supply chain is to get the right product to the right customer at the right time with minimal costs. Costs examples are waiting time, impact on the environment, product waste, and fuel usage. Analytics can improve supply-chain by creating a complete overview of the products, routes, warehouses, and related relevant data points. Using historic data and learning the key drivers for demand and factors influencing the efficiency of the warehouse or shipping routes, a demand forecast can be made, inventory and warehouses can be optimized, routes can be optimized and supplier performance can be monitored. Root causes for issues can be identified and addressed.
Click on this link for a complete demo of a supply chain analysis using Spotfire® - including promotional analysis, pricing, demand forecasting and route optimization.
Trade Area Analysis
Trade area analysis uses Spotfire® geo analytic capabilities to identify sales potential for specific products or a category by looking at demographic data, sales data, store locations, and associated travel routes. How to run such an analysis is explained in this Tips & Tricks article. Including video and links to download as an example. This analysis can even be done at a granular level such as walking distance to stores.
Retail Location Management
The geo analytic or mapping capabilities are a great way to visualize schematics of physical locations such as shopping malls and stores. Store performance can be monitored and analyzed - depending on the availability of - beacon data or other footfall information and the location of shoppers. This is being used in airports for example where knowledge of busy areas helps airport facility managers to direct passengers to shops and restaurant areas where there is still space.
Data products
Companies who have been wise to invest in the collection and storage of data will be able to reap the benefits of sharing their data not only internally but with their external business ecosystem. For the retail industry, examples include suppliers sharing supply chain and performance data with retailers. Business value is significant as it can either be positioned as a data monetization opportunity creating a new revenue stream, or it can be positioned as a retailer-supplier collaboration tool that will help increase market share and profitability, resulting from a joint understanding of the market and the consumer and making room for win-win decisions on promotion, assortment, and distribution. The competitive advantage is for those who understand the value of this type of data democracy and have found flexible, intuitive, and secure tools for sharing their data and insights.
Here are some examples of successful external data- and analytics-sharing projects from various industries. Note that these are just shared as examples, you will need to be a customer with login details to see the data and analysis on the portal. Spotfire® has strong capabilities in the area of security and scalability to accommodate these types of deployments.
- Service Management Group and their SMG BrandGeek SurveyMini Analytics (scroll down a bit once on the page to see 2 videos with examples of BrandGeek, SurveyMini)
- BNP Paribas Security Services - DNA Data Navigation Analysis
Data Sources
Some key external, Syndicated data providers in the CPG & Retail Industry are companies such as IRI, Nielsen, Kantar, GfK, Experian and others. They provide Point of Sale (POS) and media data such as price, promotion levels sales volumes, and sales velocity. And customer panel data such as trial and repeat, penetration and buying frequency or demographic data such as age, gender, and income. This data can help understand the full customer and market context and is a valuable addition to internal data sources. Other data sources include market research data from surveys from providers such as IPSOS or vendors focused on data sharing between retailers and CPG such as Dunnhumby.
The right combination of internal and external data on customers, production, supply chain, and financials and the right analytic application allows for optimization in all of the below areas of the retail journey from supplier to customer as shown in a high-level overview of a CPG & Retail Processes. It is a continuous process impacting product and consumer life cycle.
Customer Stories
This is where you can find all customer stories. And here are a few highlights of how CPG&Retail customers create value using Spotfire®:
- Nature's Pride - This large food distributor and retailer, uses Spotfire® to predict demand for a variety of products to ensure availability when customers need it most. - See details in this case study (a video with a demonstration of the solution)
- Riteway and BeaconUnited - use Point of Sale data and Spotfire® to bring manufacturers and retailers together to realize business growth and optimal distribution of their products. You can read the details in this customer story
Learn More
Industry Resources
- National Retail Federation (US)
- IGD (UK, Global)
- Consumer Brands Association Smartbrief
- Statista FMCG Data and Infographic
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