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The retail revolution: How to stay competitive?
We recently received a project brief from a large retail client surrounding food-selling counters. In contrast to the more typical retail work we undertake around shelved food – both packaged and fresh – this one was about counters selling freshly-cooked food to customers, for which daily wastage can be a huge problem. To keep stocks of ingredients to the optimum and keep wastage to a minimum requires advanced analytics, to predict how many dishes on the menu customers would consume every day and how much of each one, and therefore forecast what raw materials (and how much) would be needed on a daily basis.
Retailers having freshly-cooked food counters is not new – I saw these in various big-box retailers when I first lived in Chicago about 10 years ago. We are accustomed to helping retailers understand the impact of a freshly-cooked food counter (say a pizza counter) on overall store sales and customer experience. But this problem of optimising raw material is more typical of the Quick Serve Restaurant sector than retail. It serves as a reminder of how difficult it has become for a retailer to survive in this fiercely competitive industry. Brick and mortar stores have to look at innovative use of data analytics in the face of increasing competition and pressure from online and omni-channel retailers to eke out profitability from every nook and corner.
The Smart Cube recently launched new retail solutions, underpinned by Amplifi, our organisational intelligence platform, to help our clients maximise their profitability, deliver more value to the customer and stay ahead of the ever-increasing competition. Clients will benefit even more from a combination of our proprietary assets, knowledge capital, cutting-edge technology and advanced analytics capabilities, through solutions including Merchandising Analytics and Analytics Centre of Excellence.
Concept Lab was born from our experience of doing a lot of experiment design for businesses in retail. For example, if a business wants to introduce a new product in stores, but wants to first pilot and test whether it will lead to incremental sales or not, our proprietary experiments algorithm allows us to test this initiative out in a statistical and controlled manner.
Concept Lab provides an agile experimentation ecosystem to accelerate innovation in a time- and cost-boxed manner, and is proving to be a great way to build a business case for new ways of doing things; as well as avoiding potentially costly mistakes. A large European retailer has already partnered with us and adopted the ‘Concept Lab’ solution as a replacement of the company’s innovation hub, for example sing video analytics to helping study consumer behaviour, eventually accelerating intelligence and discovery.
A sector-specific solution-focused approach will help us deliver more insights, for problems new and old. Shrinkage, for instance, is an age-old problem faced by retailers; yet they have not been able to do much to curtail it. On average, retailers lose 1-2% of revenue to shrinkage, which may at first look appear like a minuscule number. But if you have operations at a Walmart-scale ($500bn revenue), you are looking at losses in the billions ($5bn loss for a Walmart at this rate). And it goes directly to the company’s bottom-line. We are creating a mechanism for detection of shrinkage before it happens, triggering automated alerts to stores and managers. Reducing even a small amount of that translates into pure margin.
The Smart Cube’s retail team has also grown exponentially (with a growth percentage of 200% in the last 3 years). These talented minds, coupled with our sector solutions and Amplifi, are strengthening our capabilities in this dynamic industry.
Find our more about The Smart Cube’s Retail Solutions, and how analytics can help ease increasing margin pressures.
In his current role, Nitin is a part of our sales team in the US and leads the Retail, CPG & Consumer Markets practice. Prior to moving to the US in 2018, he was leading the data analytics practice, and managed operations across the globe and also drove the practice strategy in terms of new capabilities, solutions, and technologies from India. Nitin studied electrical engineering at PEC, Chandigarh, India, and got his MBA degree from the University of Notre Dame, IN, USA. He is a religious follower of American football at the college level, and loves playing Tennis, Badminton and new games his son keeps on inventing!