Jason Lobel - convenience.org · Walmart testing inventory-scanning robots in 50 stores ... 3 times...
Transcript of Jason Lobel - convenience.org · Walmart testing inventory-scanning robots in 50 stores ... 3 times...
Jason LobelCEO & Co-founderSwiftIQ
Making Retail Smarter via Insight Automation & Machine Learning
Using Data to Grow EBITDA Feels Good. You Can Do This!
SMARTER OPERATIONSLARGER BASKETSHIGHER PROFITS
THE FASTEST, MOST ADVANCED INSIGHTSAND VENDOR COLLABORATION PLATFORM FOR
CONVENIENCE RETAIL
Email: [email protected]: 773-412-8966
+ $100B in Receipt-Level Transaction
Data
Unify Disparate Data & Mine Billions
of Records in Seconds
6 Top 20 C-Stores
Independents > 20 Stores
Key Recognition2016 & 2017 Vendor of the Year
Advanced Insights & Data Collaboration Platform
Today’s Topics
1. Amazon’s Agility & Innovation
2. Noteworthy Data / AI Use Cases
3. The State of Analytical & Engineering Talent
4. The Value of Transaction Data
5.How to Lead with Data & Collaboration
AMAZON IS COMPETITIVE EVERYWHERE…
Best-In-Class Data Accessibility as a “Platform”
Granular Measurement & Automated Insights
Automation/AI from Supply Chain to Store to Digital
Substantial Cost Efficiencies
Great Customer Experiences
Anyone Who Doesn’t Do {This} Will be Fired
Have A Nice Day!
In ~2002, Bezos sends memo to all employees mandating they expose theirdata through application programming interfaces (APIs)
https://apievangelist.com/2012/01/12/the-secret-to-amazons-success-internal-apis/
APIs Facilitate Amazon’s Best-In-Class Data Accessibility
APIs Help Amazon Innovate & Bring Costs Down
Source: Amazon.com
External Value of APIs
Applications Feed Robots to Power Supply Chain Automation
Amazon Acquired Kiva for ~$775mm in 2012 In Jan 2018, Amazon had over 100,000 robots >2x more than Jan 17; 5x more than in Jan 2016 Reported 20% productivity increase
API = Partners = Accelerated GrowthKey Benefits
Now Create Automated Ordering with Just 10 Lines of Code!
How Are Our Peers Using Data & AI to Create Value?
Crowdsource New Product Development
Source: http://www.coca-colacompany.com/stories/fountain-favorites-sprite-cherry-and-sprite-cherry-zero-become-first-national-brands-inspired-by-coca-cola-freestyle
2009 debut
Artificial Intelligence Initiatives
AI in Supply Chain
AI in Shelf Management Walmart testing inventory-scanning robots in 50 stores Scan shelves for out-of-stocks, misplaced/ mislabeled items, and incorrect pricing
Reported 50% more productive than human counterparts 3 times faster vs store employees who have time for 2 scans per week Robots proved to be more accurate
Source: Walmart, Reuters https://www.reuters.com/article/us-usa-walmart-robots/wal-marts-new-robots-scan-shelves-to-restock-items-faster-idUSKBN1CV1N4
Automation / AI in Pricing
Electronic Shelf Labels are prominent in Europe
Do not be surprised if this leads to dynamic price optimization
Source: http://www.businessinsider.com/kroger-is-rolling-out-digital-shelf-technology-2018-1
AI to Personalize Billions of Recipes
Data Input Email Personalization
Web behavior Email History Product catalog CRM Segments Logic Exclusions Digital Coupons Other
AI for Mobile Audiences
Receipt-Level Data Mobile Device Data
Timestamp (date and time)
Tender (Cash, Credit, Debit)
Loyalty (if available)
Products (SKUs)
Mobile device identification (IDFA, AAFA, WAFA)
Location (lat/long) Location (lat/long)
Timestamp (date and time)
Automation/AI is ComplexRequires Vigorous Testing & A Long-Term Commitment
Source: http://www.businessinsider.com/whole-foods-employees-reveal-why-stores-are-facing-a-crisis-of-food-shortages-2018-1
…Finding Analytics/Engineering Talent is Tough for Retail/CPGs
Data Science & Analytics: Demand by Industry
To Start Food Retailers Need Decision Automation in Stores
HOW MUCH REVENUE WILL YOU GENERATE IF 10% OF YOUR CUSTOMERS BUY ONE MORE ITEM?
Building Blocks of Insight Automation
TRACKING NEW ITEMSto analyze their performance
MEASURING ROI(promotions, displays, coupons, etc.)
OPTIMIZING BUNDLESto maximize promotion success
SMARTER ASSORTMENTSbased on revenue and full value to store
REPORTING PERFORMANCEto achieve sales and market share objectives
ENRICHING DATAto optimize analysis and maximize insights
Insight Automation = Answers in Seconds or Minutes
Receipt-Level Data is the New KingCurrent Weekly Sales Location Product Customer ID (if available)
Source http://groceryreceipts.wikia.com/wiki/File:33612.png
New Basket Tender Timestamp
Can You Measure ROI….to Item? Category? Retailer?
How Do You Test & Measure a Hypothesis Rapidly?
Should We Add Coolers? Measure Test vs Control
What Drives Assortment Value: Revenue or Basket?
Opportunities(Grow)
Laggards(Shrink/Remove)
Item 1
Revenue: $4.32mm# of Baskets: 1.07mm$ per Basket: $9.29Avg. $ Basket (Item): $4.04Avg. $ Basket w Item: $5.25
Item 2
Revenue: $4.58mm# of Baskets: 1.39mm$ per Basket: $8.14Avg. $ Basket (Item): $3.31Avg. $ Basket w Item: $4.83
Sales w Item: $5.6mm Sales w Item: $6.7mm
Do you understand destination items and their incremental value? Item 1 has 14% higher basket value per trip ($9.29 vs. $8.14)…. Item 2 has 5.9% more total revenue and customers spent 19% more than item 1
How Do You Think About Item Relationships?
Most Unique Categories
1866.2%
Affinity Index = A measure of the unique strength of relationship between the item and the category
377.1% 328.8% 231.9%
Fresh Fruits Gum Nuts/Seeds Salty Snacks
GumNuts/Seeds Salty Snacks
223.5% 70.2%178.8%264.6%
Snack Cakes
Item Relationships Can be Optimized for Shopper Missions
Purchases peak in Summer
Starting morning till the afternoonOn weekends
vv
Are You Optimizing Each Category/Item by Season/Day/Hour?
Take Home Pizza + Multi-Pack Bundle Tornado or Hot Dog
+ SingleSandwich & Slide + 6 Pack Bundle
Salty Snacks + Single
Do You Utilize Loyalty/Tender Data for Smarter Marketing?
Can You Deliver Contextually Relevant Marketing?
$1,500
$700 $570
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600 Powerball Prize
Lottery is a destination; text Saturday AM & when jackpot is >$500mm
Amazon Drives Costs Down
Amazon Drove Down eCommerce Costs
Storing and Processing Data is Not Expensive Cloud providers have eliminated cost and processing barriers
Data Costs Are Expected to Approach Zero
How Valuable is My Data?
Raw Data Even if Clean Has Limited Value Most convenience data needs substantial enrichment
Data on its own has limited value because it is not always usable
Value is most driven by insights and decision automation from clean,enriched data
PRODUCT ATTRIBUTESAttributes to discover patters
InconsistentLacks Metadata
Suppliers Can Provide Huge Value Augmenting Your Data…
SPACE / PLANOGRAMto achieve sales and market share objectives
SHIPMENTSIdentify inventory, and better
manage working capital
PRODUCT ATTRIBUTESAttributes to discover patters
Monetizing Data = Enrichment & Engaging Suppliers
Walmart Shares Data; Expects Operating Excellence
Walmart hoped to add $1 billion to revenue by improving product availability at stores. In 2017, Walmart wanted orders delivered on time 95% of the time
Large suppliers were notified they must deliver full orders within a window by 85% or face a 3% fine Previously, these suppliers had to hit a 75% threshold
Smaller supplier delivery rate will move to 50%, up from 33%
How Will You Use Data & Automation to Drive Down Costs?
1. If Data is Not Clean & Accessible You Are Less Agile & Competitive
2. Amazon Is Reducing Costs; Decision Automation Reduces Cost
3. AI is Complex; Take Small Risks & Test With A Long-Term Commitment
4. Engineering/Analytics Talent is Hard to Find; Plan to Outsource
5. You Cannot Apply AI if You Do Not Have Basic Insight Automation
6. Receipt-Level Data is the King for Measurement & Activation
7. Data Sharing is Caring!!! Suppliers Have Value to Offer!
Key Takeaways
Jason LobelCEO & Co-founderSwiftIQ