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Macys.com uses private cloud to personalize digital shopping strategies

BY Deena Amato-mccoy

Macys.com has made a name for itself by analyzing consumer data to gain insight into its loyal shopper base. The retailer, which features more than 60,000 products online and leverages multiple digital channels to share product information cross-channel, has armed itself with a set of internal cloud-based, high-performance analytics tools designed to improve customer segmentation, market-basket analysis and real-time personalization cross-channel, based on a broader scope of product attributes.

“We need to understand where the demand is coming from and how to use the data to know how to best serve our shoppers,” said Kerem Tomak, VP marketing analytics, macys.com. “But managing the volume of data is an increasing challenge.” Indeed, he described the amount of data that the retailer collects as “mind-blowing.”

It is made even more so by the fact that macys.com is looking to harness three dimensions of data: volume of the data, variety of data (including structured and unstructured information), and the velocity with which they receive and process it.

“We have a short time frame to process these large product attributes and match these to customer needs,” Tomak explained. “Traditional BI or near-real-time solutions don’t meet our needs because we have less than a minute to really > capture customer attention. If we don’t do it the right way, she’s gone.”

Knowing how crucial it is to quickly turn raw data into actionable information, macys.com turned its attention to a high-performance analytics tool from SAS, Cary, N.C. The retailer linked the SAS Enterprise Miner to a Hadoop cluster, an open-source, data-management platform initiated by Yahoo and Google. This private cloud platform sits behind macys.com’s firewalls and processes large data sets in a distributed computing environment.

Macys.com compiled two years worth of data, which ranges from 20 terabytes to 30 terabytes. As new data comes into macys.com servers, it is stored on Hadoop and passed to the SAS tool, where macys.com analysts compare information with its historical database to build reports on products, marketing and merchandising views.

Since going live with the system in late 2010, macys.com has gained a unified view of data and performance across its omni-channel enterprise, including insight into who buys which products across what channels, according to Tomak.

“We are also more effectively measuring the impact of online marketing initiatives and how this translates into general sales, as well as sales by channel,” he added.

Macys.com is also able to complete these tasks in shorter, more efficient durations. When processing these reports on the previous system, the system often crashed due to the size of the queries. But that doesn’t happen anymore.

“Now we can get answers within two hours and pass information to SAS. The automation of report generation also saves more than $500,000 a year in comp analyst time. It has become a life saver,” Tomak said.

Looking forward, macys.com plans to use Hadoop to connect its marketing and merchandising operations with its call center to gain a truly unified view of customer response.

“The Macy’s brand has so many customer touchpoints that we need to make sure we can improve how we serve them, deliver the right offers and merchandise when they need it,” Tomak said. “That is the Holy Grail. And it is only possible if we connect different systems across the organization onto one data-processing environment.”

Macys.com hopes to have the integration complete by the end of 2012.

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J.Walker says:
Apr-14-2013 11:58 am

Since going live with the system in late 2010, macys.com has gained a unified view of data and performance across its omni-channel enterprise, including insight into who buys which products across what channels, according to Tomak.superiorpapers.com

J.Walker says:
Apr-14-2013 11:58 am

Since going live with the system in late 2010, macys.com has gained a unified view of data and performance across its omni-channel enterprise, including insight into who buys which products across what channels, according to Tomak.superiorpapers.com

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Economic angst has CEOs on edge

BY CSA STAFF

The purchasing power of Walmart shoppers is on the rise as gas prices come down and the improved spending outlook has the company’s share price setting new highs. What’s there to worry about?

Plenty, according to a survey of top executives conducted by the Business Roundtable, an organization that represents companies who combined employ more than 14 million people and generate $6 trillion in annual sales. Member companies include the likes of Walmart, General Electric, AT&T, ExxonMobil and American Express.

The group regularly surveys its members to gauge their outlook on the economy and in the latest go round there was plenty of skepticism about where things are headed.

Click here to read recap by MarketWatch of the survey results or click here to read an actual transcript of a media briefing chaired by Boeing CEO Jim McNerney.

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Retail’s Hottest Emerging Markets

BY Marianne Wilson

Economic uncertainty throughout Europe and the United States and political instability in the Middle East are putting an increased spotlight on developing markets, which are forging full-speed ahead and show no signs of slowing down, according to the 11th annual Global Retail Development Index by consulting firm A.T. Kearney.

Possibilities for retailers abound not only in the biggest developing markets, particularly the BRIC nations (Brazil, Russia, India and China), but also in many smaller, more far-flung countries around the world, including Georgia, Oman and Mongolia.

The report makes a strong case for global expansion.

“Given the accelerated growth rates of developing countries compared with the anemic growth in European and North American markets, global retailers must have a strategy for expansion into developing markets. In the past five years, U.S.-based Wal-Mart, France-based Carrefour, U.K.-based Tesco and Germany-based Metro Group saw their revenues in developing countries grow 2.5 times faster than in their home markets,” said Michael Moriarty, partner, A.T. Kearney, and co-leader of the study.

The report ranks the top 30 developing countries for retail investment worldwide. For the second consecutive year, Brazil took the top spot, driven by its growing middle-class economy. High consumption rates, a large urban population, and reduced political and financial risk also make Brazil a top destination for international retailers. In 2011, retail sales accounted for 70% of Brazil’s consumer spending.

Chile, which ranked second on the Index, has one of the most sophisticated and fastest-growing economies in the region, according to A.T. Kearney, with an expected gross domestic product (GDP) growth of 6.2% in 2012. Plus, the country has low financial risk — its inflation rate of 3.3% is close to the Central Bank’s target — and country risk is roughly the same as such developed nations as the United States, France and the United Kingdom.

In all, seven Latin America countries made the Index (see chart), reflective of the region’s expanding, dynamic retail sector and strong economic growth.

NEW: New countries making the Index include such “small gems” as Georgia, Oman, Mongolia and Azerbaijan. These markets, although small in total retail size, are making progress as attractive destinations for global retailers, particularly specialty and luxury players.

Also new to the rankings is the country of Botswana, seen as a precursor to steadily developing nations in the Sub-Sahara African region that could emerge as favorable retail markets in coming years.

New markets are only as effective as their work forces, and harnessing the local talent pool is key for reaching customers, A.T. Kearney advised. According to the GRDI’s Retail Talent Index, the developing markets with the top retail talent are Malaysia, China, Chile, Indonesia and Azerbaijan.

“Talent identification and development is just as important to successful market expansion as an underserved market and a growing consumer base, said Hana Ben-Shabat, A.T. Kearney partner and study co-author. “Wage inflation and staff turnover are significant obstacles for retailers entering many of the top development countries.”

The A.T. Kearney Index incorporates four criteria — market attractiveness, country and business risk, market saturation, and time pressure — to assess the opportunities for foreign retailers to develop business in various markets.

[email protected]

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