In my last blog on Real-Time Decision-Making (RTDM), I shifted from a theoretical discussion of what RTDM is to uses cases that highlight key aspects of the value it can bring to business in periods of market uncertainty. I’m using the Retail Industry because its an Industry everyone knows something about coupled with the fact that its one of the sectors most impacted by our current business disruptor, COVID-19.
Further, I used Kiabi, a Global retailer headquartered in France, as the use case to delve into the importance of combining existing historical data patterns with disparate new sources of data to generate RTDM insights for a strategic capability. In this case, Kiabi’s customer loyalty program. The key point I wanted you to take away from that example is that in times of market uncertainties, enhanced customer focus requires business agility that can only be achieved by a complete, common operational picture, and that requires additional pieces to the data puzzle.
Democratizing the Common Operational Picture
I briefly mentioned that the Common Operational Picture or COP has several stakeholders and users who may need to leverage the COP in different ways suited to their specific roles, responsibilities, and evolving needs during periods of instability. Making current and accurate information available to and between parties is critical and can make all the difference in service. Take, for example, the old days when you needed a taxi, you’d call the dispatch center, the center would send you a cab, and the cab dispatcher would call you when the cab arrived.
If you got lost and couldn’t make it to the pick-up point, they wouldn’t know. If the cabby got lost, you wouldn’t know. If you were running late, they wouldn’t know and just leave. Along came Uber and Lyft and, now you and the driver know precisely where you are at all times, and you have multiple means of immediate communication with them – the middleman is the app, and it delivers the COP. In other words, you have different roles – driver and fare-paying passenger – but you have a COP and a means of leveraging it to make decisions and act on them independent of any third party, in a peer-to-peer fashion.
In modern integrated online and brick-and-mortar Retail, you want a COP around stock availability and location (specific stores and online) for your customer-facing employees – online, in call centers, at stores – and customers. Under normal circumstances, it would be great to know before you make a trip to a store if the item you want to purchase is there. Now it’s critical as we try to limit trips and their duration to reduce chances of infection rates going up with COVID-19. A less life-threatening but critical business requirement as well such that you don’t risk frustrating customers who remain dissatisfied long after this period passes.
Decentralization of Decision Making
In periods of market uncertainty, the issues may be more complicated than is something in or out of stock, and historical data based on business-as-usual stock depletion and reordering patterns will only get you so far. You may need visibility into daily or even hourly buying patterns across your stores – and not just at the corporate level. As an individual store manager, you may even need visibility into your vendor’s stock and the ability order from them or trade with other stores.
Actian helped another retailer, LeRoy Merlin, build out an RTDM strategic capability targeting their individual stores. The capability they wanted to enhance was the ability to monitor sales performance as a function of product SKU, time of purchase and quantity, stock on hand, and several other factors. LeRoy Merlin is a Do-It-Yourself home improvement retailer with over 400 stores in 12 countries across Europe, Asia, Africa, and South America. Their Enterprise data warehouse (EDW) was simply too slow to provide analytics services to high volumes of concurrent interactive users across tens of thousands of products. With Actian Vector (the engine inside the Actian Avalanche Cloud Data Warehouse), LeRoy Merlin was able to perform daily uploads from their EDW to provide real-time ad hoc queries and reporting by up to 2,000 interactive users. The intelligence from the Actian solution enables individual store managers to determine what’s selling and what’s sitting on the shelves so that they can adjust stock – critical during periods of rapid change in demand as we’ve seen with COVID-19.
But it doesn’t have to be COVID-19, for example, DIY retailers in the US can tell where they will run out of stock on Generators by hurricane trajectory forecasts. The key point here is instead of a small group of decision-makers in HQ determining what stock orders should be made and sent where on a quarterly or annual basis or scaling that team up to reduce the hindsight view down to months or weeks. The RTDM capability provides LeRoy Merlin the ability to do it daily at the individual store manager level, decentralizing decision-making to improve speed, accuracy, and business agility.
Dynamic Pricing and Dynamic Rationing
As was the case with the RTDM strategic capability Actian supported for Kiabi, the support for LeRoy Merlin can be used for more than business agility to change stock and improve sales performance. It’s not uncommon for store managers to have the latitude to discount items that aren’t moving off the shelves. For this solution, the business-as-usual requirement we helped Kiabi with was speed. They couldn’t get back real-time reports and queries to so many people at the same time. It was not an accuracy issue or in other terms, the freshness of the day you could use the sales performance data the Actian solution is providing would certainly help them make the right decision about this, but the data necessary to decide what to discount or what to reorder is probably not stale if it’s refreshed on a weekly or even monthly basis.
In a period of market uncertainty that generates a rapid change in demand, you still need the real-time response, the speed, but you also need accuracy, current data. With panicked customers, you may need to reorder immediately, or you will see an empty shelf and, before your shelves empty of existing stock, you may need to adjust limits on purchasing quantities and even adjust those limits on a daily basis and let customers know before they make a trip to the store. Those limits may need to be different at different stores, again leveraging those closer to the transaction to make the decision.
You may even look to leverage the RTDM capability you’ve built across multiple core business processes. Everything we’ve just discussed could be combined with your loyalty program, and you could send out notifications stating when new deliveries of toilet paper will arrive and what the purchasing quota will be, setting expectations in advance.
Finally, as I mentioned last time, RTDM capabilities are needed in almost any industry, and virtually all industries are impacted in some way by business disruptions. In the next blog, we’ll start to gradually shift to a discussion of use cases in other industries and what it takes to build a world-class RTDM capability.
In the meantime, learn more about RTDM and Actian Avalanche here.