Teaching Statistics to Speak
Southern States Cooperative, owned by more than 300,000 farmer-members, serves up quality products, expert services and sound advice “to people who like to get their hands dirty” from 1,200 retail locations in 23 states.
Sales for the Richmond, Va.-based cooperative were $2.3 billion for the 2012 fiscal year, with $936 million generated by the retail division.
Since the cooperative was formed in 1923, it has placed a great deal of emphasis on determining the best regional assortments and product preferences. But that involves a lot of number crunching.
“We use Access [database software] and Excel, so we were looking for a solution that is faster, easier to use, and allowed us to dig down into more detail,” says Erin Ball, a Southern States business analyst. Alteryx “fit our needs for data mining and business analytics. It’s been interesting to really dive into what our farmer customers put together in a [purchase] mix, what they’re buying ... and how we can match more of our products to their needs.”
Greg Bucko, manager of customer insights for Southern States, has “worked with a lot of business intelligence programs in the past, and found that Alteryx is highly effective. We’re using it to understand how customers make their choices, to optimize pricing and promotions, for predictive analytics and direct mail campaigns and circulars.”
Southern States wasn’t previously able to penetrate the mountains of data detailing customer and competitor locations and identify all the factors that affect each store’s sales. “We’re now starting to peel back the layers of that onion and see the insights that are driving the action,” Bucko says.
The Alteryx solution
Alteryx’s newest solution, Alteryx Strategic Analytics 7.1, is capable of “humanizing big data by allowing customers to integrate any type of data, including unique packaged data, and then putting the power of predictive analytics in the hands of the people who drive decisions in organizations,” says George Mathew, the company’s president and COO.
Retailers used to look at business intelligence for what happened in their business’s past and then look at future performance, Mathew explains. But now retailers are asking for population data, demographics and social media.
“They are bringing together the outside and inside information to make good analytic decisions,” he says. “Most customers don’t come to us when the sky is falling. It’s when they have growth on their mind — growth of current stores in a market, their competitors and the scale of growth.”
Mathew cites the experience of a major sporting goods chain that tripled its store locations over the past decade because it recognized and acted upon a shift in its customer demographics. With customers placing a higher priority on fitness and good health, the retailer linked that shopper motivation with a merchandise assortment that anticipated those lifestyle choices.
While there are very few areas within a retail company’s operations that won’t benefit from strategic analytics and business intelligence, Mathew underscores the importance of regional assortments in merchandise, or “hyper-localization.
“I think that’s where the biggest opportunities and challenges for retailers are today,” he says. “A national retailer’s merchandise in Seattle is different from its stores in New Orleans, just as QSRs offer different choices in different parts of the country.”
Retailers, he says, “have to think about how they deliver a specific assortment of merchandise —the location, the inventory and the demand planning, and price elasticity, and even the demographics within different elasticities. These issues are more important now than they were a decade ago.”
As an example, Mathew points to the impact of social media. “There is an enormous amount of information about retailers, the brands they sell and their stores,” he says. “Oftentimes, the information is a demand signal that is not being incorporated” in strategic planning.
Getting answers, quickly
Alteryx has already attracted some 250 clients, including many of the largest U.S. retailers, and claims more than 200,000 users worldwide.
“We have a solution that allows our clients to bring in all the data that occurs across their data warehouse, as well as third-party data that includes social media sources,” Mathew says. “One of the biggest differentiators between our solution and others is the ability of our solution to ingest and consume any data — from inside the company or outside.”
Alteryx reports that its clients are able to begin using its solution quickly: 84 percent are able to design and deploy programs during the first week; 54 percent are able to do that in the first day; 26 percent report having “gained value” in the first four hours.
Ball says more useful data is available — and available much faster — since Southern States installed Alteryx last summer.
“In the past, when we studied the data to find out what else customers bought on their shopping trips, it used to take us six hours to find what we needed,” she says. “That process has now been reduced to a few minutes. We’re now able to fine-tune assortments by presenting companion items, side by side.”
Bucko agrees. “The volume of insights has increased,” he says. “There are a lot more of those ‘aha’ moments throughout the organization. My dream was to have a one-stop solution, with data extraction and the analytics. Having both is a big deal, and that is what I am most excited about.”