jason lobel - convenience.org · walmart testing inventory-scanning robots in 50 stores ... 3 times...

Jason LobelCEO & Co-founderSwiftIQ

Making Retail Smarter via Insight Automation & Machine Learning

Using Data to Grow EBITDA Feels Good. You Can Do This!

SMARTER OPERATIONSLARGER BASKETSHIGHER PROFITS

THE FASTEST, MOST ADVANCED INSIGHTSAND VENDOR COLLABORATION PLATFORM FOR

CONVENIENCE RETAIL

Email: jason@swiftiq.comCell: 773-412-8966

+ $100B in Receipt-Level Transaction

Data

Unify Disparate Data & Mine Billions

of Records in Seconds

6 Top 20 C-Stores

Independents > 20 Stores

Key Recognition2016 & 2017 Vendor of the Year

Advanced Insights & Data Collaboration Platform

Today’s Topics

1. Amazon’s Agility & Innovation

2. Noteworthy Data / AI Use Cases

3. The State of Analytical & Engineering Talent

4. The Value of Transaction Data

5.How to Lead with Data & Collaboration

AMAZON IS COMPETITIVE EVERYWHERE…

Best-In-Class Data Accessibility as a “Platform”

Granular Measurement & Automated Insights

Automation/AI from Supply Chain to Store to Digital

Substantial Cost Efficiencies

Great Customer Experiences

Anyone Who Doesn’t Do {This} Will be Fired

Have A Nice Day!

In ~2002, Bezos sends memo to all employees mandating they expose theirdata through application programming interfaces (APIs)

https://apievangelist.com/2012/01/12/the-secret-to-amazons-success-internal-apis/

APIs Facilitate Amazon’s Best-In-Class Data Accessibility

APIs Help Amazon Innovate & Bring Costs Down

Source: Amazon.com

External Value of APIs

Applications Feed Robots to Power Supply Chain Automation

Amazon Acquired Kiva for ~$775mm in 2012 In Jan 2018, Amazon had over 100,000 robots >2x more than Jan 17; 5x more than in Jan 2016 Reported 20% productivity increase

API = Partners = Accelerated GrowthKey Benefits

Now Create Automated Ordering with Just 10 Lines of Code!

How Are Our Peers Using Data & AI to Create Value?

Crowdsource New Product Development

Source: http://www.coca-colacompany.com/stories/fountain-favorites-sprite-cherry-and-sprite-cherry-zero-become-first-national-brands-inspired-by-coca-cola-freestyle

2009 debut

Artificial Intelligence Initiatives

AI in Supply Chain

AI in Shelf Management Walmart testing inventory-scanning robots in 50 stores Scan shelves for out-of-stocks, misplaced/ mislabeled items, and incorrect pricing

Reported 50% more productive than human counterparts 3 times faster vs store employees who have time for 2 scans per week Robots proved to be more accurate

Source: Walmart, Reuters https://www.reuters.com/article/us-usa-walmart-robots/wal-marts-new-robots-scan-shelves-to-restock-items-faster-idUSKBN1CV1N4

Automation / AI in Pricing

Electronic Shelf Labels are prominent in Europe

Do not be surprised if this leads to dynamic price optimization

Source: http://www.businessinsider.com/kroger-is-rolling-out-digital-shelf-technology-2018-1

AI to Personalize Billions of Recipes

Data Input Email Personalization

Web behavior Email History Product catalog CRM Segments Logic Exclusions Digital Coupons Other

AI for Mobile Audiences

Receipt-Level Data Mobile Device Data

Timestamp (date and time)

Tender (Cash, Credit, Debit)

Loyalty (if available)

Products (SKUs)

Mobile device identification (IDFA, AAFA, WAFA)

Location (lat/long) Location (lat/long)

Timestamp (date and time)

Automation/AI is ComplexRequires Vigorous Testing & A Long-Term Commitment

Source: http://www.businessinsider.com/whole-foods-employees-reveal-why-stores-are-facing-a-crisis-of-food-shortages-2018-1

…Finding Analytics/Engineering Talent is Tough for Retail/CPGs

Data Science & Analytics: Demand by Industry

To Start Food Retailers Need Decision Automation in Stores

HOW MUCH REVENUE WILL YOU GENERATE IF 10% OF YOUR CUSTOMERS BUY ONE MORE ITEM?

Building Blocks of Insight Automation

TRACKING NEW ITEMSto analyze their performance

MEASURING ROI(promotions, displays, coupons, etc.)

OPTIMIZING BUNDLESto maximize promotion success

SMARTER ASSORTMENTSbased on revenue and full value to store

REPORTING PERFORMANCEto achieve sales and market share objectives

ENRICHING DATAto optimize analysis and maximize insights

Insight Automation = Answers in Seconds or Minutes

Receipt-Level Data is the New KingCurrent Weekly Sales Location Product Customer ID (if available)

Source http://groceryreceipts.wikia.com/wiki/File:33612.png

New Basket Tender Timestamp

Can You Measure ROI….to Item? Category? Retailer?

How Do You Test & Measure a Hypothesis Rapidly?

Should We Add Coolers? Measure Test vs Control

What Drives Assortment Value: Revenue or Basket?

Opportunities(Grow)

Laggards(Shrink/Remove)

Item 1

Revenue: $4.32mm# of Baskets: 1.07mm$ per Basket: $9.29Avg. $ Basket (Item): $4.04Avg. $ Basket w Item: $5.25

Item 2

Revenue: $4.58mm# of Baskets: 1.39mm$ per Basket: $8.14Avg. $ Basket (Item): $3.31Avg. $ Basket w Item: $4.83

Sales w Item: $5.6mm Sales w Item: $6.7mm

Do you understand destination items and their incremental value? Item 1 has 14% higher basket value per trip ($9.29 vs. $8.14)…. Item 2 has 5.9% more total revenue and customers spent 19% more than item 1

How Do You Think About Item Relationships?

Most Unique Categories

1866.2%

Affinity Index = A measure of the unique strength of relationship between the item and the category

377.1% 328.8% 231.9%

Fresh Fruits Gum Nuts/Seeds Salty Snacks

GumNuts/Seeds Salty Snacks

223.5% 70.2%178.8%264.6%

Snack Cakes

Item Relationships Can be Optimized for Shopper Missions

Purchases peak in Summer

Starting morning till the afternoonOn weekends

vv

Are You Optimizing Each Category/Item by Season/Day/Hour?

Take Home Pizza + Multi-Pack Bundle Tornado or Hot Dog

+ SingleSandwich & Slide + 6 Pack Bundle

Salty Snacks + Single

Do You Utilize Loyalty/Tender Data for Smarter Marketing?

Can You Deliver Contextually Relevant Marketing?

$1,500

$700 $570

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600 Powerball Prize

Lottery is a destination; text Saturday AM & when jackpot is >$500mm

Amazon Drives Costs Down

Amazon Drove Down eCommerce Costs

Storing and Processing Data is Not Expensive Cloud providers have eliminated cost and processing barriers

Data Costs Are Expected to Approach Zero

How Valuable is My Data?

Raw Data Even if Clean Has Limited Value Most convenience data needs substantial enrichment

Data on its own has limited value because it is not always usable

Value is most driven by insights and decision automation from clean,enriched data

PRODUCT ATTRIBUTESAttributes to discover patters

InconsistentLacks Metadata

Suppliers Can Provide Huge Value Augmenting Your Data…

SPACE / PLANOGRAMto achieve sales and market share objectives

SHIPMENTSIdentify inventory, and better

manage working capital

PRODUCT ATTRIBUTESAttributes to discover patters

Monetizing Data = Enrichment & Engaging Suppliers

Walmart Shares Data; Expects Operating Excellence

Walmart hoped to add $1 billion to revenue by improving product availability at stores. In 2017, Walmart wanted orders delivered on time 95% of the time

Large suppliers were notified they must deliver full orders within a window by 85% or face a 3% fine Previously, these suppliers had to hit a 75% threshold

Smaller supplier delivery rate will move to 50%, up from 33%

How Will You Use Data & Automation to Drive Down Costs?

1. If Data is Not Clean & Accessible You Are Less Agile & Competitive

2. Amazon Is Reducing Costs; Decision Automation Reduces Cost

3. AI is Complex; Take Small Risks & Test With A Long-Term Commitment

4. Engineering/Analytics Talent is Hard to Find; Plan to Outsource

5. You Cannot Apply AI if You Do Not Have Basic Insight Automation

6. Receipt-Level Data is the King for Measurement & Activation

7. Data Sharing is Caring!!! Suppliers Have Value to Offer!

Key Takeaways

Jason LobelCEO & Co-founderSwiftIQ