Retail Intelligence

Retail Intelligence is comprised of four integrated solution groups:

• Customer intelligence helps retailers identify, acquire, activate, serve and retain the most profitable customers.
• Merchandise intelligence helps retailers drive revenue, protect margins and earn customer loyalty with optimized merchandise plans, assortments, pricing, promotions, space plans and allocations – all driven by unparalleled demand forecasting and predictive analytics.  
• Operations intelligence lets retailers leverage organizational assets to trade with vendors and serve customers more efficiently and profitably.  
• Performance management solutions provide the ability to analyze, forecast and maximize profits across the entire retail enterprise by monitoring cost and performance, helping retailers drive disparate functional units toward common goals.

The addition of the Ergenomics Power Index and other analytical services can then provide an additional layer of accuracy to this base. Advanced business intelligence can only be garnered by dedicating to a rigorous, enterprise-level approach to customer insight. Ergonomics’ Blueprint of Enterprise Analytics is a solution to help achieve and solve all that is solvable within an organizational paradigm.

info@ergenomics.com

http://www.ergenomics.com

About Ergenomics

Several things differentiate Ergenomics. Our commitment to an enterprise (not business or product-line) perspective is paramount in truly gaining intelligence that drives the entire company forwards—not just a certain product. Given this, our recommendations and results will provide a true and absolute baseline for executive leadership to compare numbers across the entire company (apples-to-apples, if you will).

Our staff may be one of the most experienced you will see—PhD economists and C-level business executives with top-rate support personnel to tailor a specific solution based on years of industry experience. And finally, we produce deliverables that will stand the test of time relative to their existence; not something that will be outdated after the initial run or implementation. Ergenomics will provide the client with true go-forward business intelligence.

Competitive Advantage Opportunity in Retail

Predictive analytics focused initiatives face a few obstacles. Many companies do not have a lot of experience in handling analytics projects which presents some unique opportunities for all involved (management, business line, vendors, etc). Often a key learning is to understand that analytics projects have a strong research and development component to them. Most organizations have a lot of experience and are comfortable with “execution” initiatives but may not be comfortable with “test and learn” process.

Also, selection of the right resources and partners can be a daunting task. Deploying enterprise level analytics that span business, statistics, and common sense can, at times, be a very foreign concept to an organization. First and foremost, the selected partners need to fit into the culture of the organization. They need to quickly come to understand the business problems and incorporate them into the statistical tools to solve the problem. In addition, the ability to clearly and effectively communicate recommendations is imperative. The Ergenomics approach for developing an enterprise-level analytical strategy for retail clients is rooted in the “decision tools” fundamentals of: Business Process, Data, and Analytics. A thorough understanding of these foundational organizational elements is critical to ensure an optimal business intelligence solution. Failure within—or lack of attention to—any of these interrelated components will result in an inefficient and underperforming result.

We define Business Process to incorporate such key items as a company’s overall business model, culture, competitive environment, leadership, business partners and resources, and realistic state of readiness. Similarly, within the Data perspective, we immerse ourselves in our client’s data elements, warehouse capabilities, legacy systems, ERP, and external or appended sources. Likewise, within Analytics, our team of professionals leverages years of academic and industry experience around target value, dependency, correlations, interactions, predictive impact, and significance. Implementation of standard industry leading analytical tools (SAS) can have a tremendous impact on business decision making. In addition, these tools can be modified to further enhance their effectiveness in understanding and analyzing an organization’s operational, customer, and financial situation.

info@ergenomics.com

http://www.ergenomics.com

About Ergenomics

Ergenomics vision and approach is to be innovative in the field of analytics. It is a holistic, enterprise wide philosophy that helps to keep us ahead of the competition. We also marry the power of seasoned retail executives with our PhD analysts to define and understand the problems and come up with solutions that work.

Our solutions are not simply theoretical; they are executable to help drive your business results. We are confident that we can help you leverage the power of analytics to improve your retail performance. Our fees are reasonable and built on the idea that we are only successful when you are.

Customer Driven Multi-Channel Marketing and Up-Sell and Cross-Sell Opportunities

Acquiring new customers is expensive for any retail business. Most of us are familiar with the Bain study that says it is five to seven times more expensive to acquire a new customer than it is to sell more to an existing customer. So if you are spending $1M on a mass promotion to generate $15M in sales, by focusing instead on selective customers built on our Ergenomics Power Index, you may be able to cut your ad spend in half and achieve the same sales results. This frees up more money for you to spend on other promotions, or simply drop to the bottom line.

The old Pareto rule is proven out time after time in retail. For most retailers, they will obtain approximately 70% of their sales from just 30% of their customers. Yet, most retailers spend their advertising equally against every customer. For most retailers, this means that they are likely spending more in advertising to these customers than they get back in sales.

At Ergenomics, we help you to segment your customers and model them so that we can create incremental sales dollars for you. We look at their shopping frequency, spending, and basket items to help you decide how and where to best spend promotional dollars most effectively.

Ergenomics has developed a Power Index that allows clients to understand how certain SKU’s, business lines, and customer segments truly impact profitability. That is, our approach and solution can drive business intelligence to a level that is simply not attainable otherwise. Our Power Index is a robust tool that helps you get all of the information you need quickly and efficiently. The foundation for developing this solution is in the calculation and application of the Power Index. This index has its roots in Game Theory and uses some of the algorithms inherent to this science. Recognizing that each retail customer is a player in their unique game enables the Principles of Game Theory. Game Theory states that if there is a game, there are rules, players, and groups. If a player wants to join the group, that player wants to gain positively from this alliance. For the group to let this player in, they need to benefit from the addition. Constantly changing rules are applied in a timely manner to the right game (retail customer needs), the right player (retail customer), and the right group (product offerings). A retail customer will not buy a product if the need is not recognized. A company will not sell unprofitable products to generate long-term losses.

info@ergenomics.com

http://www.ergenomics.com

About Ergenomics

Ergenomics is the first to apply the principals of Game Theory specifically to the activity of crossselling.

Affiliated partnership agreements with SAS, SAP, Teradata, and Accenture, among others, ensure world-class solution delivery for our clients. Our services include readiness assessments, business analysis, marketing optimization, data management, CRM analytics, customer insight, and risk management. Our ultimate goal is to enable organizations to implement advanced business intelligence and insights.

Price Sensitivity 

One of the most common problems within the retail sector is pricing a product—not only initial pricing, but more importantly making the proper pricing decisions on an ongoing basis. Proper management of markdowns alone can contribute millions to a retailer’s bottom line. There are numerous similar products sitting on the shelves that are at different life stages and have complex interrelationships with other products and customers. Providing an optimal price of a SKU in order to extract maximum customer response is a challenge in itself. Virtually every retailer is running sales every week.

Usually each merchant looks at his or her business and decides what will be on sale. Yet the merchants typically do not know what customers will buy at full price and which will only buy on sale. If you could analyze the price sensitivity of each customer, you would find opportunities to significantly reduce your markdowns. Our Ergenomics Price Index is a unique method for modeling merchandise, customers and prices to help you index your customers’ price sensitivity. Some customers are so- called “cherry pickers” and will only buy an item when it is on sale. At the opposite end of the spectrum are non-price sensitive customers, who will just buy something because they want it or need it and do not care about the price.  Imagine the benefit of understanding price sensitivity at the individual customer level. What a powerful tool to use to reduce markdowns and to beat your competitors at the price game. 

We calculate the price elasticity for products and accessories that have extremely high or extremely low elasticity along with reasonable business impact (sales volume, margins, or life stage).  These accessories are picked for analysis. By using gross margins, we can come up with the best price change for such accessories.

Likewise, a basic market basket analysis can help find products that customers like to buy together. However, bundling needs to be evaluated for elasticity as well as likelihood of success before taking it to the customer. In order to increase the sale of some of the underperforming accessories, such accessories can be strategically bundled with highly elastic products. Similarly, a company will want to know the primary and secondary driver relationship qualities of each product (i.e., which product is the one that really makes people come to the stores). The gross margin of the bundle can be used for driving the price of the bundle.

info@ergenomics.com

http://www.ergenomics.com

Several things differentiate Ergenomics. Our commitment to an enterprise (not business or product-line) perspective is paramount in truly gaining intelligence that drives the entire company forwards—not just a certain product. Given this, our recommendations and results will provide a true and absolute baseline for executive leadership to compare numbers across the entire company (apples-to-apples, if you will).

Our staff may be one of the most experienced you will see—PhD economists and C-level business executives with top-rate support personnel to tailor a specific solution based on years of industry experience. And finally, we produce deliverables that will stand the test of time relative to their existence; not something that will be outdated after the initial run or implementation. Ergenomics will provide the client with true go-forward business intelligence.