Retail Solutions

Customer Profitability

Merchants can no longer base critical merchandising decisions on intuition or historical reports and expect the desired results. Instead, retailers need a way to maximize the profitability of the merchandising process while exceeding customer expectations ― a system that provides more valuable information about demand, customer behavior, category performance and more. Most of all, this information needs to be available from one source, so it can be accessed and used quickly to make more profitable merchandising decisions.

But because the retail business is also so dynamic ― sales for one weekend could make or break an entire month ― analysis systems must provide the ability for every level of a retail organization to sense and respond quickly to any challenges that arise, to instantly assess victory or defeat and then adapt for future benefit.

Traditionally, ideas about merchandizing and customer behavior have been forged using simplistic query and reporting tools coupled with instinct and intuition. Optimized answers to these questions have been all but impossible. In fact, too many retailers still rely on simple operational and transaction data to determine future outcomes on the hope that hindsight can generate useful insight and foresight. But knowing how many transactions took place is not the same thing as understanding why they took place, which factors influenced the outcome, and how to optimize the result in the future. Spreadsheets provide a rudimentary understanding of the business, but they can’t provide the kinds of answers needed to elevate the retail organization into proactive, differentiated, sustainable success.

Solution Description

Powerful business intelligence (BI) solutions like Panorama NovaView 5.0 are enabling retailers to analyze transaction patterns based on past purchases and interactions, and then use that information to influence future purchases. The results drive new levels of value by generating product purchase correlations that enable retailers to anticipate the customer’s needs even before they are expressed. This capability maximizes cross-selling and up-selling opportunities, and it can enable smarter store layouts that position key products based on the intentions of customers at different times of the day and different days of the week.

Panorama NovaView 5.0 can power sophisticated market basket analysis, helping retailers understand what items are likely to be purchased together (or not), primarily with the aim of identifying cross-selling opportunities. The point-of-sale scanner produces transaction data, which can be loaded into a data-warehousing environment to determine merchandising, product placement and shelving decisions. Using BI tools, users can drill down the product dimension to automatically retrieve the associated market basket summary associated with that product from the underlying relational data store.

Amusingly, the most commonly cited example of market basket analysis is the finding that young fathers buy diapers and six packs of beer Thursday nights, which may sound trivial, but in fact enables appropriate placement of products for cross-selling and up-selling.