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SAP to the Rescue of Retailers Drowning in Big Data

By: Sam Sliman, President, Optimal Solutions Integration

Data-driven decisions are nothing new to retail, but today’s big-data deluge – structured, unstructured, multi-source data nearing or surpassing the petabyte level – poses unprecedented challenges. And the stakes for retailers have never been higher. Today’s tech-savvy consumers tap an array of cross-channel sources — Web, kiosks, stores, call centers, mobile, social, etc., — before making a purchase. Transparency rules the day. Inconsistency turns customers away. Retailer missteps can be glaring and costly.

Retailers are expected to realize modest year-over-year gains in 2012. According to IDC Retail Insights: Predictions for 2012 for the Retail Industry, spending growth for the global retail industry will range from a low of 3.9% for home furnishings to a high of 5.6% for drug stores. IDC predicts spending will grow the fastest in the software segment, at 5.8% year to year, while services growth will be lowest at 3.5%. Asia Pacific is poised to grow the fastest at 4.8% while Western Europe will only grow at 3.6%, IDC reports. According to the National Retail Federation, the nation’s largest retail trade group, U.S. retailers will notch a 3.4% increase in sales this year, below last year’s 4.7%, with sales reaching $2.53 trillion in 2012 — up from $2.45 trillion in 2011.

While trending in the right direction – if one starts with the economic meltdown of 2008 – persistent high unemployment, rising oil prices, volatile global markets, and skittish consumer confidence pose a formidable challenge to sustained revenue growth for retailers. Competition is fierce. Consumers are frugal. Only retailers capable of making the fastest, smartest decisions that immediately and positively impact all facets of their business can hope to boost sales, win and keep customers, improve margins, and grow market share.

Drowning in big data

Consumers freely turn over volumes of personal data. The return implied is an expectation for a consistent, accurate, high-quality interaction across all touch points, and retailers who fail to effectively leverage big data to provide a personalized experience that presents the right product at the right price through the right channel at the right time are not long for this world.

To accomplish this, retailers must troll oceans of data to make spot-on, real-time decisions. Myriad challenges of dealing with today’s unprecedented data volume include capturing, storing, cleansing, searching, sharing, analyzing, and visualizing.

No easy task. Understandably, retailers are, for the most part, drowning in big-data:

  • 62% of retailers surveyed claim a lack of consumer analyses and transactional insight negatively impacts every aspect of retail planning and execution (Aberdeen)
  • 48% of retailers surveyed are searching for more ideas and solutions to improve speed of access to relevant business data (Aberdeen)
  • 57% of retailers surveyed want to present a more individual and personalized shopping experience, understanding that this is vital for customer profitability (Aberdeen)
  • Companies effectively utilize less than 5% of available data (Forrester)
  • Just under half of retailers surveyed admit to finding it difficult to turn customer data into insight (SAP)
  • Two-thirds of retailers surveyed are under pressure to provide IT innovation that will improve customer retention and loyalty (SAP)
  • Retailers will struggle to meet the challenge of B2B and C2B omnichannel transparency (IDC)
  • Through 2015, 80% of multichannel implementations will fail due to gaping silos and channel-centric strategies (Gartner)
  • More than 85% of Fortune 500 organizations will be unable to effectively exploit big data by 2015 (Gartner)

SAP to the rescue

Powered by the SAP HANA platform, the SAP BusinessObjects Sales Analysis for Retail analytic application not only helps retailers stay afloat but also empowers them to sail full steam through big-data waters – charted and uncharted.

A selection of SAP BOBJ Sales Analysis for Retail benefits includes:

  • Unified POS data for real-time information, insight and analysis
  • Improved sales and store operations for effective, accurate alignment of customer demand, product assortment, inventory levels, and promotions
  • Improved visibility into demand via real-time POS data analysis and reporting
  • Real-time insight into promotional effectiveness with what-if analysis of tactics to increase promotional lift and margins
  • Improved stock availability by leveraging real-time insights into inventory risks and opportunities
  • Increased consumer satisfaction by helping buyers find what they want when they want it amd through their channel of preference

Speed is of the essence for retailers in today’s fast-paced, big-data world. Leveraging HANA, the SAP BusinessObjects Sales Analysis for Retail analytic application enables retailers to significantly speed up analysis of terabytes of data (>20x faster than traditional databases), reduce shelf turnaround, eliminate out of stock scenarios during promotions, and instantly identify and correct cross-channel discrepancies – among many additional, meaningful and measurable business benefits.

SAP BOBJ Sales Analysis for Retail features prebuilt data models, key performance indicators (KPIs), role-specific dashboards and customized reports to provide retailers with a deeper, more immediate understanding of what’s working with consumers, what’s not, and what will strengthen loyalty, unify channels, drive sales and improve margins in the seconds, minutes, hours, days, weeks, months and years ahead.

Let’s face it, with today’s plodding economy, ever-increasing competition, increasingly demanding consumers, rising operating costs and unrelenting pricing pressure, every data point factors in, every second counts, every customer touch has an impact, and the speed and smarts of every decision a retailer makes can mean the difference between sinking, floundering or pulling ahead.

To learn more about how the SAP BusinessObjects Sales Analysis analytic application for Retail, don’t miss the SAP Helps Retailers Cash in On Big Data webinar.

For more on SAP analytics & BI read SAP Analytics & BI 2012: Opportunities Abound, BI Spending to Soar in 2012, and download The Optimal SAP Advisor Report: Why SAP Analytics & BI Now.

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