How “Routine” Data Visualization
Can Bring About Unexpected
Opportunities that Drive Retail Sales
The problem? For the majority of retail teams who have to crunch the numbers themselves, it’s a very precarious perch that requires hours and hours of data mining and results in miniscule nuggets of actionable information. In terms of insights, profitability and efficiencies — the results usually aren’t worth the effort.
But there really is gold in them thar’ hills — demand intelligence insights are critical to brand differentiation, minimizing inventory costs, maximizing promotions, building relationships with retailers and — ultimately — growing sales. So just how do you get golden actionable insights?
Certainly not from dated, order-based internal data crunched by a retail team and then shared in spreadsheet and PowerPoint formats with C-level executives and retail Buyers.
Then what is the answer? The timely. The routine. The unexpected. That which can be seen. And that which is shared.
Seeing consumer demand as it happens
If you’re relying solely on internal order-driven data, your hands are tied by internal calendars — frankly, how often do retail teams receive supply, sales or marketing data?
Further, what use is internal data that’s weeks old when you’re trying to manage external out-of-stocks now? Your best bet is to work with weekly POS data and compare it to historical POS trends — giving you the benefit of hindsight and foresight.
Comparing apples to apples — why the
‘routine’ matters
How many times have you sat in an internal meeting and wondered whether everyone is comparing apples to apples, or apples to oranges? If each member of the retail team is individually crunching numbers, how can
you know with any certainty that the data being compared is truly comparable — or even reliable?
The calculations done in Excel, for example, are only as good as the person trying to run those calculations in Excel — and not all users are equally talented. Retail teams need synchronized modes of calculation and communication provided by demand intelligence solutions that import, process and report POS data quickly, consistently and reliably.
Consumer goods retail teams and
C-level executives are perched atop an
ever-growing gold mine of internal and
external demand data.
The calculations done in Excel, for example,
are only as good as the person trying to
run those calculations in Excel — and not
all users are equally talented.
The unexpected — how you benefit from
the visual element of surprise
When retail teams rely on people to crunch the numbers they lose the element of surprise. And when it comes to insights, the “unexpected” is what clearly indicates changes in consumer behavior. How so? When retail teams mine data, then process and format it, they are working from a preconceived notion — building a pie chart with a distinct end-goal in mind based on their own assumptions, not the most recent consumer demand preferences.
“Surprise” moments — when insights and opportunity leap off the page at you — are generated by demand intelligence solutions that process and format demand data, then funnel demand
intelligence into visual dashboards and reports. In this case, the team’s notions aren’t driving the output. The data is. Because the tool presents data in a visual format — bar charts, graphs, pie
charts, etc — the retail team discovers “surprise” insights — insights the retail team hadn’t conceived of. Insights that are driven by consumer purchasing habits. Insights that identify internal challenges and help you determine root causes.
These are the insights that opportunity is made of. Freed of any responsibility for processing and formatting demand data, the retail team members can now spend their precious time on the “why” and “what if” questions. And that equates to actionable opportunity.
Data visualization — the great equalizer
The key, of course, to seeing the “unexpected”s is the ability to see. For that reason, demand intelligence solutions that provide dashboards and diverse graphic representations of POS trends — data visualization — play a critical role in business intelligence today. We’re not talking about simple spreadsheets — because it’s just not that easy to see, or tell, a story in that format. Not everyone can look at columns of numbers and
see a story beyond those numbers. On the other hand, data visualization — comprised of customizable dashboards and various visual representations of data — makes the “unexpected” visible, no matter who is looking at it. And that speeds the process of identifying insights, making decisions, and communicating internally and externally.
With interactive dashboards, users can
see an event from many different data
views all on one screen. This allows users
to examine correlations, view trends over
time and share cross-team data.
Figure 2
Figure 1-c; Item details and history. Figure 1-a; Sales over time.
Figure 1-b; Average retail price against sales volume.
Example: Optimizing Promotions
As an example, here we see a dashboard of demand data (Figure 1) for a promoted item.
On this screen the user can view sales over time, average retail price against the sales volume, and specific item details for the item’s entire history. With promotional performance highlighted, the user can easily compare the promotional effects, assess how an item has performed in the past and determine whether it is effective to give up margin to get the incremental lift for a deeper price point — intelligence crucial to determining an optimal promotional price point.
To determine an event lift, the user can compare base metrics for each item — average unit sales, average dollar sales and average regular price point prior to the event. The dashboard allows the user to compare the unit volume sold during the event, to unit volume sales trends coming into the promotion (Figure 2).
Figure 1 View Sales Over Time View Avg. Retail Price Against Sales Volume View Specific Item Details and the Entire
Further, the user can see how each item performed in this promotion — and then start asking questions based on performance.
Just as importantly, dashboards can help teams understand how specific promoted items performed and — to get a sense of true incrementality — to understand how non-promoted items performed. In this example, shown in Figure 3, the promoted items each experienced a lift, but the three items that were not promoted had a negative lift, indicating consumers favored the promoted over the non-promoted items within this brand. The dashboard also illustrates the effect the same promotion had on a different, competing brand — clearly demonstrating that the majority of the competitor’s items experienced a negative impact. Based on this data, the team can consider promoting when the competitor does in order to remain competitive at the shelf. If, in contrast, your non-promoted brand experienced a lift during another brand’s promotion, then the team should consider when, or if, to promote — why give up price with a sales promotion when the team can benefit from another brand’s promotion?
Dashboards can even help users visualize category performance during a promotional event. In this example, shown in Figure 4, the non-promoted, less than 100-count item actually experienced a 14% lift from the promotion because of the attention brought to the category. Overall, the category had a 19% increase in dollar sales, and 31% increase in unit sales. The promotion therefore was incremental to the entire category and helped the other segments.
All told, data visualization helps the user forecast a future promotion — to determine what the expected promotional retail will be and the projected lift. By sharing this demand intelligence with internal production and the retailer, the user can adjust supply chain management as needed and avoid out-of-stocks or excess inventory costs.
Was the item with a 5.6 lift featured in a circular that went out?
Is the 2.4 lift item normally located in a different part of the store, and thus underperformed because of a change in location?
Figure 3
Example: Out-of-stocks
In this example, shown in Figure 5, the dashboard helps the user see and investigate current inventory problems
— identifying the worst out-of-stock issues during the current week. The dashboard lists the worst in-stocks for the week, ranked by the current week and stock percent. On the same screen, the user can see and compare five weeks of in-stock trends in order to further assess whether the current week’s in-in-stock challenges are in the process of improving or declining.
The dashboard also allows the user to determine how important the out-of-stock items are to the assortment — detailing the number of stores that carry the item, the on-hand quantity across the chain, the number of weeks of supply the retailer currently has on hand, and the number of units
the retailer sold last week.
Another dashboard (Figure 6) can help the user determine root causes of out-of-stocks with demand intelligence concerning sales and inventory history. In this manner, the team can determine how long the item has been out of stock and whether the out-of-stock problem is a reoccurring one, or whether the out-of-stock occurs at specific time frames within a year.
Figure 5
In the dashboard featured in Figure 7, this item has been below the in-stock threshold for several months, and over the past three weeks has become significantly worse. By examining metrics such as store quantity, increment and unit lift, the user can see that out-of-stocks occurred during promotions — indicating the need for better promotional forecasting and communication with production and the supply chain to ensure the promoted item is where it needs to be, when it needs to be there.
An example of the “unexpected” is discovering that while the overall instock threshold percentage is acceptable, all is not well. Upon closer look at regional or demographic data — instock challenges (and lost sales) may become apparent.
A dashboard that lists in-stock exception items and details specific to that item can hold many surprises. Here, an item has an acceptable 95% instock level, but regional data indicates that three distribution centers on the east coast have significant problems.
Shared visualization
The beauty of data visualization isn’t simply the dashboards and the ah-ha moments they provide the retail teams. Let’s not forget the other half of data visualization: demand intelligence reports. Reports are critical to team leads who have precious little time to tell their story to C-level executives and retail buyers — they need to communicate their strategies, and the data behind those strategies, in a very concise, crystal-clear fashion. If they fail, the retail team insights are worthless — relegated to the shelves of ‘what could have been.’
If you’re asking a C-level executive or retail buyer to act on that which they can’t see, you’re asking them to act on that which they might not understand. The key to increasing the chances your actionable insights are acted upon is, again, data visualization.
Shared visualization, Continued
In this example shown in Figure 8, a single screen provides a complete picture of dollar share segment growth, and what segments are driving that growth for a pre-defined thirteen-week period, as well as the historical year-long trends related to that growth. According to this report, total business has increased 35.6 percent over last year during the last 13 weeks. Further, it is clear that growth is driven almost entirely by the plates segment – representing 72 percent of total business during those 13 weeks.
A 35.6 percent increase in total business over last year. 72.7 percent of total business over the last 13 weeks.
This second screen shown in Figure 9, provides a C-level CPG user with a comprehensive picture of yearto-date business across 12 retailers. This report indicates an overall 7.6 percent increase in volume, and is color-coded to make it easy to identify those retailers driving the growth – BJ’s Wholesale, Kroger and Walmart – as well as those retailers facing significant decreases in sales – Target and CVS.
Reports such as this allow C-level executives and retailers to immediately identify current challenges, compare performance across retailers and examine the historical trends behind increases in volume that can help them identify what works and tweak what doesn’t.
Figure 8
Category Management
“With SOLYS, a primary win has been team efficiencies,” according to Melissa Loar, Category Management for Kellogg’s Target Team. “One of our historical challenges has been the extremely labor intensive process of extracting data, manually manipulating it and then creating user-friendly graphs or spreadsheets.” Continues Loar, “We manage five categories for Target and hold captaincies and advisorships within those categories — it’s our responsibility to be analytical and strategic, not tactical. Before SOLYS, we felt we weren’t delivering on the strategic end because pulling data from InfoRetriever is tactical and was so time-consuming. Each member of my team would spend four to five hours just pulling reports on Monday. If there were too many users on InfoRetriever, it could add another two hours of work. Our Buyers’ expect insights early on Monday and there’s great pressure on us to provide that.”
“SOLYS eliminated the tactical challenges for us. We easily save two to five hours per week, per team member because SOLYS imports and processes the data.” Continues Loar, “We save
even more time because SOLYS allows us to create Custom Item Groups that align with our internal item and category attributes. That flexibility of data aggregation also provides greater depth in our analysis. Prior to SOLYS, my team member would have to pull four or five different reports from InfoRetriever and
then recode brands. SOLYS does all of that for her. Now she spends about five minutes pulling reports and the rest of her time bulleting insights that she can present to the Buyer.”
Loar’s team has also found SOLYS reports to be a critical asset in communicating insights to Target Buyers. “Using SOLYS customizable reports, our Lunchbox Captain can provide a complete snapshot of weekly performance to the Buyer — a series of charts and graphs that, in one page, illustrate Target year-to-date performance for all key vendors.”
“Ultimately, it’s my team’s job to drive growth in these categories for Target — and to do so by providing the Buyers with an accurate, timely picture of the category as a whole. With SOLYS, we can show Buyers what is happening in the category — both the good and the bad — so they can go back to brand retail teams with strategies that grow volume.” Loar continues, “For example, while economic data tends to show a lesser recessionary trend, we’ve been able to demonstrate that consumers are still acting — and shopping — like there is a recession. Promotions and private label goods remain key drivers.”
Using the SOLYS Brand Breakout report, Loar’s team can “share a one-page report with Buyers that compares year-to-date data with last week’s performance in total sales dollars, regular sales dollars and promotional dollars; dollar share by brand; and growth drivers by brand. By combining this report with our team’s knowledge of the industry and our understanding of what Target is currently investing dollars in, we can clearly demonstrate what is driving growth. Right now —that’s private label. And we can demonstrate that internal retailer strategies are
working — health and wellness products are also driving volume, in complete alignment with Target’s push to expand and promote these offerings.”
Promotional reporting has led to improved category sales as well. “Again, because SOLYS handles the tactical end of things, we can quickly pull together reports that demonstrate promotional effectiveness. This allows Buyer’s to assess promotions from all angles — how the event affected the category, promoted brands and non-promoted brands; and whether inventory levels were adequate to the promotion. With these SOLYS reports in hand, Target has the diagnostic tool they need to determine whether to repeat a promotion, tweak it, or replicate it in other categories.”
“The benefits of these efficiencies cannot be
underestimated. SOLYS has reduced data
extraction time by 50 percent. Now my team
spends the majority of their time fleshing out
insights and developing strategies that help
Target grow category volume.”
Concludes Loar, “Our Buyer repeatedly comments on how easy the reports are to understand. He’s appreciative that our ability to provide brand detail has given him an in-depth perspective on category drivers. Target is no longer looking for 90-page reports. They’ve simplified — they want one concise page of critical insights and an appendix to back them up. And we have the ability to provide precisely that.”
Sales
Ryan Truesdale, Target Sales member for Kellogg, notes, “SOLYS has absolutely saved us time and because of that I’ve had a lot of ah-ha moments with SOLYS. It has accelerated our understanding and made it simpler to identify insights. We’re a small team, but this tool has made us realize the potential we have to grow sales.”
Truesdale frequently uses the Lost Sales Report. “I share these with our Buyer to illustrate where we’re falling short and then we proactively work together on improving upcoming promotions. Working from the dashboard, I can customize my metrics and compare items across any time frame I select so I can effectively demonstrate lost sales caused by under-forecasting.” Continues Truesdale, “For example, at times we’ve run a hot price point in a front cover ad, but the Lost Sales report has indicated high out-of-stocks. Once I share the report with the Buyer, I have little problem getting him to take another look at the forecasts. And internally we’ve improved the accuracy of demand projections, product orders and in-stock levels.”
The SOLYS Item Synopsis report has provided perspective. “Using the dashboard I can customize time frames, items, even regions. Because of this, I’ve been able to look at things differently — by region and demographic. I’ve found instances where certain products don’t perform as well in a region and we can adjust our promotional strategy — tailoring it to the region — in order to remedy that.”
SOLYS has helped improve internal communication as well. “With SOLYS I can provide visibility for weekly sales at the executive level — something I couldn’t do before. The Executive Overview gathers data critical to the C-level on a weekly basis and has made it easier to communicate what the key business drivers are.”
Even the Buyer has noted the benefits of easy-to-visualize SOLYS reports. “We’ve had a lot of positive feedback. The Buyer is now very comfortable with his ability to understand key business drivers, appreciates the succinct and effective communication of sales results, and has noted how easy it is to identify — and then address — opportunities.”
Concludes Truesdale, “Ulimately, SOLYS allows
me to take the time, sit back and really analyze
what I see before me. It’s encouraged me to
analyze the data and then give a full analysis
that I can confidently present to the executive
level and my Buyer.”
About LumiData
LumiData is a demand intelligence specialist providing retail demand
information that assists Fortune 1000 consumer goods companies to evolve their business strategies. LumiData’s combination of software dashboard applications and client services creates easy-to-visualize demand planning solutions utilized to drive sales and marketing strategies that increase revenue, improve margins, enhance retailer partnerships and strengthen market positions.
About THE AUTHOR
Ransom Stafford, MBA
Ransom Stafford has served as the president and CEO of LumiData for five years. He has more than 25 years of corporate experience in information technology, business consulting and infrastructure change management, and has held a variety of managerial positions with IBM, Control Data and The St. Paul Companies. He is an expert at business architecture re-engineering — aligning strategic intent, technology, business processes and people to achieve maximum organizational productivity. During his career, he has been instrumental in helping organizations optimize their success by providing employees with the right resources they need to maximize their contribution.
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