Something for Everyone
In the hyper-competitive world of retailing, there are few things more important than accurate, up-to-the-minute sales and inventory management data. But what happens when that data isn’t available when it’s needed?
This was the situation faced by Macys.com, which since its inception in 1998 has continued to increase traffic and sales. Because Macy’s customers are increasingly multi-channel shoppers, the website has become a major growth engine for the parent company.
“The site did very well during the [winter 2010] holidays and a lot of attention and energy is going into the dotcom business,” says director of merchandise analytics Jinny Uppal. “We expect to come up with a lot of new strategies over the next couple of years that will really push the business to places we’ve never been before.”
These strategies might have been stymied, however, by an inadequate business information system that didn’t provide users with the kind of daily data analysis they needed to streamline decision-making.
“Although Macys.com operates under the same strategies as the corporation, we are a separate operating division that does its own buying and assortments and we do our own marketing analytics” Uppal says. “We track click-through conversions, how the customer is behaving and what we can do on the website to influence what they are doing. The more we look at customers, the more we see that their experience online influences their behavior in the store and vice versa.”
Lack of visibility
Like other retailers, Macy’s introduced service software that would enable it to optimize and manage inventory to increase sell-through. “About three years ago, I could see that our merchants and planners wanted daily reports,” Uppal says. “It’s their bread and butter. They want to wake up every day and see how they did yesterday. But those needs weren’t being met because we’re a multi-department company, and different departments wanted to look at the data in different ways.”
In retrospect, the data requests were not particularly complicated, Uppal says. The technology solution in place at that time could give merchants and planners what they wanted, but took too long to generate.
“We had a multi-product solution that included merchandise planning and business intelligence,” she says. “The idea was that all these products would be integrated, but they [weren’t].”
As a result, a request as simple as adding a new column to a report “could take four weeks to develop given the amount of coding involved,” Uppal says. “And the moment you write code in technology you’ve got to write requirements, do testing and make sure you are not disturbing other reports. It simply wasn’t easily configured.”
The issue came to a head just as the full brunt of the recession was hitting in 2008; the company’s merchandisers and planners felt the system was making it more difficult for them to meet sales targets. “The main complaint was [a lack of] adequate visibility into what was happening in inventory,” Uppal says. “They were frustrated that they couldn’t see the information they needed.”
While it’s difficult to quantify how the situation impacted sales, the inability to quickly access information affected the morale of the merchants and planners and strained the relationship between technology and business, Uppal says.
“The argument at that time was that they were spending a lot of time manually generating reports they needed, and felt that a better system would enable them to spend more time managing the business instead of managing data,” she says. “It became a productivity issue for the business team.”
The new system
The first instinct “was to make do with what we had,” Uppal recalls. However, in the final analysis the company determined that it would be more effective to find a new system. After evaluating analytic and reporting tools from a number of vendors, Macys.com decided to implement a SaaS-based business intelligence solution.
“We launched it in parallel with the old system, which we kept alive for about four months,” Uppal says. “It was during a holiday season, which is the wrong time to take anything away from merchants. Keeping the old [system] up and running gave people time to familiarize themselves with the new one.”
Overall, the new Cloud BI system took about five months to integrate completely into Macys.com. “User rejection was a big concern for me,” Uppal says. “A year earlier we went live with a merchandise planning tool that users did not adopt due to usability and stability issues. They just wanted to go back to Excel.
“It’s a fact of life that if users don’t like something, they just walk away from it,” she says. “But as soon as we retired the old system users began finding things in the new one they didn’t know about in terms of available merchandise or reordering. In general, people liked it.”
Moreover, the new SaaS platform has considerable flexibility. “I’m heading up the business analytics team for the merchandising side of the house now,” Uppal says, “and the team I’m building consists of pure play analysts -- not merchandisers or planners.
“I played around with the solution a lot. And it’s not just for standard reporting such as daily or weekly sales reports for one category of users. It’s also for ad hoc analysis, and my team is the biggest user of that function.”
The greatest challenge for Macys.com was visibility into sales. “We talk a lot about omni- or multi-channel,” Uppal says. “Now a store can pull inventory from the dotcom pool. This past June we launched what we call Search and Send, [a feature whereby] every Macy’s store in the country that doesn’t have inventory on a particular item can look at ours. This satisfies customer needs and enables us to meet our overall sales targets.”
Macys.com subsequently expanded the PivotLink-powered SaaS BI solution to included marketing, “so right now it’s [useful] for everybody interested in retail reporting.
“The advantage of this system is that it can import data from multiple sources,” Uppal says. “So the marketing team can create their analysis out of their data warehouse, feed it in to the system and make it available for mass consumption. It’s a great dashboard environment to publish information.”
Moreover, the company is planning to expand the system outside of Macys.com as collaboration among all sales channels becomes increasingly important. “It doesn’t matter where the inventory comes from,” Uppal says. “It’s an unlimited pool and we want to be able to get merchandise to customers no matter where it is.”