Style and Statistics

Style & Statistics is a real-world guide to analytics in retail. Written specifically for the non-IT crowd, this book explains analytics in an approachable, understandable way, and provides examples of direct application to retail merchandise management, marketing, and operations. The discussion covers current industry trends and emerging-standard processes, and illustrates how analytics is providing new solutions to perennial retail problems. You'll learn how to leverage the benefits of analytics to boost your personal career, and how to interpret data in a way that's useful to the average end business user or shopper. Key concepts are detailed in easy-to-understand language, and numerous examples highlight the growing importance of understanding analytics in the retail environment.

The power of analytics has become apparent across industries, but it's left an especially indelible mark on retail. It's a complex topic, but you don't need to be a data scientist to take advantage of the opportunities it brings. This book shows you what you need to know, and how to put analytics to work with retail-specific applications.

• Learn how analytics can help you be better at your job
• Dig deeper into the customer's needs, wants, and dreams
• Streamline merchandise management, pricing, marketing, and more
• Find solutions for inefficiencies and inaccuracies

As the retail customer evolves, so must the retail industry. The retail landscape not only includes in-store but also website, mobile site, mobile apps, and social media. With more and more competition emerging on all sides, retailers need to use every tool at their disposal to create value and gain a competitive advantage. Analytics offers a number of ways to make your company stand out, whether it's through improved operations, customer experience, or any of the other myriad factors that build a great place to shop. Style & Statistics provides an analytics primer with a practical bent, specifically for the retail industry.

Acknowledgments ix

About the Author xi

Introduction 1

Chapter 1 The Changing Face of Retail 5

Chapter 2 Merchandise Financial Planning 15

Statistical Forecasting 21

Chapter 3 Assortment Management 29

Understanding Your Customer 31

Understanding Product Choice Counts 35

Understanding Current Product Performance 38

Predicting the Evolution of Trends 43

How Much to Buy? 47

What Sizes Do I Need? 51

Chapter 4 Fulfillment 57

Allocation 58

Order Fulfillment 65

Chapter 5 Pricing 71

Pricing Analytics 77

Regular Price 84

Promotional Pricing 85

Markdown/Clearance Pricing 94

Pricing Maturity and Organizational Structures 97

Chapter 6 Marketing 99

Data 100

Marketing Campaign Lift Analysis 106

Customer Lifetime Value 108

Customer Segmentation 110

The Internet of Things 112

Path to Purchase 114

Chapter 7 In-Store Experience 119

Store Labor Forecasting 120

Assortment Optimization 121

The Internet of Things 124

Chapter 8 Cybersecurity 131

Europay, Mastercard, and Visa/Chip Cards 136

Chargebacks 136

Data Governance 137

Chapter 9 Customer Journey 139

Chapter 10 Millie and Boomer: Generations Unified 147

Chapter 11 How to Gain Personal Value from Analytics 155

Citizen Data Scientist 158

Change Agent 160

Finding the Right Fit 162

The Value of Analytics 164

References and Resources 169

Glossary 171

Retail Math 183

Index 185

BRITTANY BULLARD is a Solutions & Analytical Consultant in the Retail and Consumer Packaged Goods Practice at SAS Institute. At SAS, she assists retailers in driving profitability through the use of powerful analytics. During her nine years of retail industry experience, she implemented, managed, and took part in planning solutions for allocation, replenishment, forecasting, location planning, and assortment.

Independent shop owners have the benefit of knowing each customer by name, understanding their style and dislikes, and reaching new customers by referral and local advertising. That type of personalized service and promotion is simply out of reach for big brands and retailers. Style & Statistics takes the powerful insight of data analytics and puts it in your hands to ensure a personalized, white-glove treatment for every customer, no matter how many there may be.

As comprehensive as it is approachable, this groundbreaking new guide unlocks the digital world of retail for the people who can do the most with the information. While in-house executives and buyers may never meet in-store sales staff, their ability to excel at their jobs is intimately entwined, and this holistic approach illuminates a path to breaking down the silos in a retail organization through shared data and insight. Conversational examinations of each business component highlight the practical functions and obstacles professionals encounter on a daily basis and then demonstrate how data analytics can be applied to improve overall business performance, customer satisfaction, and as a result, profitability. Inspiring examples of a variety of retailers reveal you don't need any experience in mathematics or IT to effectively use analytics to enhance your contributions and value to your company. Keep this practical guide on hand while you:

• Use an analytically optimized process to have the right garment, in the right location, at the right price when the customer wants it
• Engage with your customer to communicate the most relevant merchandise and relevant offers—and through the right means of communication—to drive customer loyalty and a path to purchase
• Proactively apply machine learning, predictive analytics, and other cybersecurity tactics to reduce the costly risk of fraudulent purchases and suspicious activities
• Discuss your new understanding of retail analytics to land a job and further your career

Style & Statistics shows you how to achieve your highest goals by adding scientific control to the art of retail.

Independent shop owners have the benefit of knowing each customer by name, understanding their style and dislikes, and reaching new customers by referral and local advertising. That type of personalized service and promotion is simply out of reach for big brands and retailers. Style & Statistics takes the powerful insight of data analytics and puts it in your hands to ensure a personalized, white-glove treatment for every customer, no matter how many there may be.

As comprehensive as it is approachable, this groundbreaking new guide unlocks the digital world of retail for the people who can do the most with the information. While in-house executives and buyers may never meet in-store sales staff, their ability to excel at their jobs is intimately entwined, and this holistic approach illuminates a path to breaking down the silos in a retail organization through shared data and insight. Conversational examinations of each business component highlight the practical functions and obstacles professionals encounter on a daily basis and then demonstrate how data analytics can be applied to improve overall business performance, customer satisfaction, and as a result, profitability. Inspiring examples of a variety of retailers reveal you don't need any experience in mathematics or IT to effectively use analytics to enhance your contributions and value to your company. Keep this practical guide on hand while you:

• Use an analytically optimized process to have the right garment, in the right location, at the right price when the customer wants it
• Engage with your customer to communicate the most relevant merchandise and relevant offers—and through the right means of communication—to drive customer loyalty and a path to purchase
• Proactively apply machine learning, predictive analytics, and other cybersecurity tactics to reduce the costly risk of fraudulent purchases and suspicious activities
• Discuss your new understanding of retail analytics to land a job and further your career

Style & Statistics shows you how to achieve your highest goals by adding scientific control to the art of retail.