capgemini ruurd dam

The Art & Science of becoming an Insights Driven BusinessRuurd Dam, September 2016

2Copyright © Capgemini 2016. All Rights Reserved

The journey to an insight-driven business in consumer goods and retail | September 2016

Hello, Ruurd Dam is my name

Ruurd DamSVP, Global Practice Leader Customer Value Analytics Capgemini Digital |Insights & Data



Our view: actionable insights are the engine of Digital Transformation ..

Digital Transformation…

Digital CustomerExperience Digital OperationsDigital Organization

& People

Digital Business Model

… driven by Insights

Real-time intelligence Cognitive & AI Actionable InsightsAgile ReportingAdvanced Analytics

Enterprise Data External Data IoTWeb & MobileSocial

Enabled by new data landscape

Enterprise-scale governed & secured

Embedded in Digital experience

Fueled by Data Science culture & capabilities

Fostering applied innovation



And this is how we scope and define Insights & Data

Customer Value Analytics is the interplay of data, technology, statistics and business processes to make a decisive impact on the customer journey



Marketing nowadays is about combining Art & Science

“Creativity of the marketer is complemented by transaction or behaviour insights, derived from a variety of data sources, and produced to guide or strengthen business decision making”



Case: market pressures have forced client to improve sales and margin growth

Illustrative

Vendors

RETAILER

http://www.nestleusa.com/

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Client leveraged our catalog of practice-proven analytics & insights to kick start the project

Business domain Key use cases in our catalog

Brand Switching Community and Influencer Analysis & Targeting Customer Churn Customer Group Analysis Customer Lifetime Value Customer Support Analytics Household Exclusivity & Loyalty

Household Segmentation Launch & Campaign Analytics Live Content & Media targeting Loyalty Analytics Shopper Insights Top Shopper Identification Trip Mission/Market Basket

Cross Sell/Up Sell Digital Analytics Effective Pricing Innovation & Product Lifecycle Management Neural Net Demand Forecasting New Product Introduction/Adoption Plan-o-gram optimization,

Development & Space Management

Product Affinities Promo Optimization Sales force Management Sales Optimization Store Layout Optimization Store Segmentation Trade spend targeting Vendor Performance

Assortment Optimization Customer & Supplier/ Supply Chain collaboration Demand & Supply Planning Inventory Visibility & Optimization Order orchestration Out-of-Shelf Analytics Predictive Asset Maintenance

Stock allocation management Supply Chain Network Optimization



We typically start with engaging both Business and IT stakeholders and prioritize opportunities using our strategic Value Analytics matrix

BU

SIN

ESS

VALU

E

Phase 1Phase 2

Phase 3

High

LowDifficult EasyEASE OF IMPLEMENTATION

5

23

2

11

1

9

4

8

7

6

12

3

19

18

15

1413

20

16

10

43

38 29

28

27

26

25

24

222117

39

37

36

35

31

3042

4140

3234

Business Value Levers: Increase Sales, Reduce Cost, Improve Working CapitalEase of Implementation Levers: Data / Tool readiness, dependency on 3 rd party, organizational readiness & alignment etc

# Insights & Data Capability # Insights & Data Capability

1 Standardized Reporting 23 Program ROI2 Ad-hoc Analytics 24 Shopper Targeting

3 Household Segmentation (Protect, Recover, Develop Strategies) 25 Sweepstakes

4 Store Segmentation 26 Net Value Cost Analysis

5 Trip Mission / Market Basket 27 Exclusivity & Loyalty6 Shopper Insights 28 Effective Pricing7 Test & Control (A/B) Identification 29 Promo Decomposition8 Retail Labs (R&D) 30 Household Segmentation

9 Assortment Optimization 31 Category / HH Targeting

10 Brand & Pkg Switching 32 Marketing Mix Optimization

11 Out-of-Shelf Analytics 33 Product Lifecycle Management

12 Plan-o-gram optimization, Development & Space Management 34 Loyalty Analytics

13 New Product Introduction / Adoption 35 Customer Group Analysis14 Replenishment Planning 36 Neural Net Demand Forecasting 15 Top Shopper Identification 37 SC Network Optimization16 Product Affinities 38 Promotion Decomposition with ROI17 Household Exclusivity & Loyalty 39 Vendor Performance

18 Digital Analytics (e-com, social media etc). 40 Working Capital Analytics

19 Campaign Analytics 41 Store Layout Optimization20 Customer Lifetime Value 42 Predictive Asset Maintenance21 Customer Churn 43 Recruitment Effectiveness 22 Cross Sell / Up Sell

EXAMPLE



Scope & Approach: two continents and multiple business domains

‒ Market: Canada (+200 stores), Netherlands (+250 stores)

‒ 25 Convenience Retail Categories, with value added insights services for top categories including

Tobacco, Beverages, Snacks (Salty Snacks, Chocolate, Gum/Mint/Candy)

Geographical & Product Scope: Proofs of Value in two continents, all categories

‒ Store segmentation based on Shopper Behavior‒ Out-of-Shelf identification corrective action‒ Assortment Optimization Eliminate volume transferable SKUs with no Shopper Rationale Give their

space to high performing/high Out-of-Shelf SKU’s‒ Effective Pricing Responsive Products and Price Points (Everyday and Promotion pricing)‒ Promotion Decomposition Elimination of non-productive promotions

‒ Centralized, easy-to-use database, and standard Category Review Reports in web portal‒ Analytics portal and Category Management Insights training‒ Category Analysis and Insights deliveries to Category Managers‒ Concrete, practical in-market A/B testing and implementation plan

Objectives: Focus on select foundational advanced analytics to address key business opportunities



Deliverables

Setup Project plan & Scope

Value Discovery Analytics

Group1: Analytics

Planograms…

Persona Profiles & Needs

Store Clustering

End user Training Group2:Promotion Playbook

…

…

Sample data quality and completeness approval.

JDA licensing requirements

Tables & Reports

Visualized planograms

Group 1 & 2 In-market Testing & Evaluation

Objective & Process Alignment

http://www.google.nl/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCJa6sNTnjMgCFcuegAodblQLhw&url=http://insights.ingredientsnetwork.com/food-safety-training-survey-results-released/&psig=AFQjCNGR3ey4UkVLxLwvASIqr5-cFxv8Jg&ust=1443085790366940

http://www.google.nl/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCJ6W0pXtrcgCFcGiFAoddIgDPg&url=http://heartworkcamp.com/camp-evaluations/&psig=AFQjCNF5TDwoQegzo8FPpv2rPANZRvqAPQ&ust=1444221147217848

http://www.google.nl/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCOv52sjtrcgCFczVFAodYYoPsg&url=http://investingnews.com/daily/resource-investing/precious-metals-investing/platinum-investing/robert-friedland-ivanhoe-mines-ivn-platinum-palladium-platreef-south-africa-limpopo-bushveld/&psig=AFQjCNHEclarAdhvXmMXhMjf0uKUGSLb1g&ust=1444221254395682



A fruitful journey to date with more opportunity to grow together

Store Clustering

Out-of-Shelf Reduction Assortment Optimization

PricingPromotion

Plan-o-gram Design

Master Data Management

Store / Macro Space Design

Systems Optimization

Standard Category Reporting



Business Value Defined

1. Single digit % net increase in Sales Revenue

2. Single to double digit % reduction in promotion costs with same or higher total sales

3. Single to double digit % reduction in inventory carrying costs

4. DD% margin improvement

Out-of-Shelf Reduction Assortment Optimization

Effective Pricing

Store Clustering

Promotion Decomposition, True ROI Measurement & Playbooks

Risk Levels Sales Preference Competitive

Price Resilience

1 LOW LOW LOW

2 LOW MEDIUM LOW

3 MEDIUM LOW LOW

4 MEDIUM MEDIUM LOW

5 LOW LOW MEDIUM

Demand Optimized Planograms



Working with our clients it has been demonstrated how significant and measurable business value can be achieved

Efficiency and cost focus changing the way the company

is operated

Reduce Trade & Marketing

costs 5 – 25%Business Operation savings

3 – 10%IT Operation savings 30%

Sales Effectiveness +10%

4x Marketing RoI

Sales +5%

Growth of existing business streams with increased

effectiveness

Sales +2.5%

Brand Value +10%Customer Satisfaction

+10%

Growth through new revenue streams and/or monetization

of data



… however, according our own research there are still many barriers to overcome

No obvious business value

Data Landscape ineffective

Scarcity of expertise

Cultural boundaries



MVP based delivery

Rapid Business Value realisation

Greenfield

Enabler for Innovation

Project based delivery

High Risk and high governance

Constrained by legacy

BusinessAnalytics

Traditional BI

And we also learned that neither a pure traditional BI nor an pure business analytics approach were the right approach



Our lessons learned have been translated into a global approach to help clients to become an Insights Driven Business

Typical ‘Business Value NOW!’ Journey

Animate Data & Technology

Operate the Organization

12 weeks +9 months+6 months

Grow Insight - driven Business

Enhanced competitive advantage by continuously

embedding analytics capabilities into business

decisions

Demonstrate Business Value

Agile Analytics hothouse to prove value in real

life on concrete business challenges

Scale the Capability

Bring enterprise scalability to analytical

capabilities and solutions in business

Ignite the Journey

Ignited stake-holders for way forward

0,5-1 day

Activate business decisions with analysed facts

Manage the data and technology foundation

Organise for enduring capabilities and benefits

Factivate the Business

THANK YOU!

capgemini ruurd dam

Data & Analytics