Good news for retail CIOs

Business analytics technologies are more than just a trend

The last few years have been hard for retailers. Sales are down and margins are tight. Consumers are saving, not spending – and their expectations are changing. They're increasingly mobile and increasingly social online, so if you don't have the size, style or level of customer service they expect, their entire social circle may hear about it in writing.

But there is good news for retail CIOs. In an industry where technology has traditionally taken a back seat to fashions and trends, there's a newfound interest in solving retailers' most data-intense problems – including purchasing, merchandising, markdowns and customer relationships – with business analytics technologies. Read on to hear how three CIOs at well-known retail brands are using SAS to solve business problems – and improve automation, collaboration and information visibility.

Accelerate fast fashion with SAS
How can you ensure the right assortment of merchandise – in the ideal mix of sizes – at each store on a consistent basis? Ask The Wet Seal. This fast-fashion retailer of contemporary apparel and accessory items uses SAS Size Profiling to transform historical sales data into accurate projections of future demand by size. Integrated with existing merchandising systems, it applies this intelligence to purchasing and allocation workflows. The result is optimal, store-specific size profiles that match local demand.

According to Jon Kubo, Vice President and CIO at The Wet Seal, the implementation had a tight deadline, but was delivered on time and on budget. SAS' industry-experienced consultants delivered the solution in phases and were able to provide early improvements in size profiling calculations.

Because Wet Seal is a fast-fashion retailer, 85 percent of its products are not replenished. "Size profiling is important to us not only for buying the right size breaks," says Kubo, "but also because we only get to buy a product once, with the objective of selling through it quickly. On the allocation side, we have to know what the correct sizes need to be per store." The Wet Seal is moving toward a localized, customer-centric approach to pricing, assortment and size at the local store level. "Size profiling is our first step in doing that," says Kubo. "In our market, this is where we will create growth and gain an advantage."

According to Kubo, a key insight delivered by the SAS Size Profiling solution is the ability to calculate lost sales at both the chain and store-specific levels. If a store didn't sell a particular product because it wasn't in stock, the SAS solution can efficiently help The Wet Seal look at similar stores in a cluster and imply why the store might have made the same sale.

The implementation had a tight deadline, but was delivered on time and on budget, says Kubo. SAS' industry-experienced consultants delivered the solution in phases and were able to provide early improvements in size profiling calculations.

"Traditional business intelligence in retail has reached a plateau of usefulness," Kubo says. "We look for specialized analytical applications that offer automated analytical capabilities, reducing the need for more human resources. SAS Size Profiling is a good example of this. While most retailers rely on manual processes, we look for technologies that augment our limited resources and help raise intelligence about our operations and make decisions on a more automated, efficient and statistical basis."

Go global with SAS 
Stefano Gaggion is the Senior Vice President and Chief Information Officer at Brooks Brothers, the oldest clothing retailer in the US. Since introducing SAS, the company's inventory is better managed, store managers have more accurate information, and personalized marketing campaigns are executed at a lower cost.

"SAS is a solid and flexible technology that is really a true enabler," says Gaggion. "Our business could double or triple in the next five years, and we will have no technical limitations with SAS.''

In recent years, the company has taken its unmatched reputation for tradition, value and high quality overseas, opening stores in places like Shanghai, Toronto and Hong Kong. The challenge for executives is to replicate the Brooks Brothers reputation for excellent quality while juggling the demands of a global supply chain and retail operations spread over four continents.

The answer is to empower store managers and vendors to better manage the business. Store managers receive key reports, provided through SAS, to help them find opportunities to improve store performance and customer satisfaction. The retailer also collaborates with vendor manufacturing partners to give them an accurate view of sales and demand, benefiting both sides of the supply chain – resulting in having the right merchandise in the right stores at the right time.

The retailer has even used SAS to help its charitable endeavors. Brooks Brothers supports the St. Jude Children's Research Hospital. To encourage sales associates to solicit donations during its annual Thanks and Giving campaign, the company tracked performance daily through SAS. Donations increased by 50 percent and the performance data helped keep sales associates energized.

The company chose SAS because it can grow with Brooks Brothers – in scale, business results and business capabilities. "SAS helps us maintain our level of efficiency, collaboration and information visibility across our global business,'' Gaggion says.

Campaign success with SAS
Retailers have invested heavily in loyalty programs over the past decade, with the hopes of analyzing customer data and segmenting customers to offer just the right discount coupon to one customer, or the catalog with the perfect mix of goods to another.

In reality, few retailers have successfully mastered that level of segmentation. Instead, the customer data is gathered, but unused. Or it's periodically shipped to a vendor who takes weeks to prepare a campaign list. That's the scenario that Chico's FAS Inc. faced. The Fort Myers, FL-based company operates more than 1,000 boutiques throughout the US, US Virgin Islands and Puerto Rico under the Chico's, White House | Black Market and Soma brands. The boutiques feature chic jackets, sophisticated tops, elegant dresses, jewelry and more. The company also markets to consumers through catalog and online channels.

"We couldn't automate processes, there were a lot of operational inefficiencies, it was inflexible and we were using low-level tools. It led us to look at different ways to operate our campaign management," explains Chief Information Officer Gary King. But that all changed with SAS OnDemand: Marketing Automation. Chico's soon saw validation for its SAS decision – ease of use became apparent in speed to results. The company now segments catalog mailings and differentiates promotion efforts for maximum impact. Trendsetting customers receive different catalogs than discount shoppers, and online customers receive e-mails geared to their buying habits.

Other improvements include midpromotion corrections so Chico's can quickly change its promotional strategies if first attempts aren't working. Plus, the retailer is bringing lapsed customers back to Chico's.

"The difference for the campaign team is night and day," says King. "We are able to turn around programs much more quickly. A campaign takes four days to pull together versus 30 days prior to using SAS. This has allowed the team to create more targeted campaigns."

Plus, the impact of the analysis Chico's has derived from SAS has delighted executives. "Our executives are so excited about the insights they are gaining about the customer, where she shops and the department that brought her into the brand. It was an incredible moment to partner with the marketing managers and watch the work come to life," says Charlie White, Vice President of Customer Relationship Marketing.

It's all about the customer
In retail, perhaps more than any other industry, it's all about the customer. The best retail CIOs understand this fact. Whether you're implementing an on-demand solution to reduce inventory or an on-site implementation to improve merchandising, the focus should always be on the customer. Continue to ask, How will reduced inventories and better merchandising help the customer? Keeping your best customers in mind will help to ensure that analytics technologies are more than just a trend at your company too.