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In Retail BI, One Size Doesn’t Fit All

by Linda Briggs
BI Tools That Analyze Geography and Demographics Give Retailers an Edge

It’s no surprise that companies are collecting and analyzing data about our buying habits, individually and as groups. But you might be surprised at just how sophisticated that examination has become. In urban areas across the United States, retailers are collecting and minutely analyzing information by neighborhoods on income levels, ethnicities, buying patterns, driving habits, zoning regulation changes—even the likelihood that you or a neighbor will buy something on sale or return it later.

Geo-demographics used to mean the study of how cities and neighborhoods evolved and were characterized. Now, it also means geographic business intelligence, and describes a growing field in which sophisticated data storage and BI software offer seemingly endless ways to collect and analyze data on who lives where and what they might buy, how far they’ll drive to make a purchase, and at what price.

Andy Moncla holds the cutting-edge title of manager of geo-demographic information for VF Corp., one of the world’s largest apparel companies. With 10,000 retail stores globally, VF had earnings of $6.5 billion last year and owns familiar brands such as The North Face, Lee, Wrangler, Nautica, Vanity Fair, and Tommy Hilfiger. It coordinates the distribution of goods to most major apparel retailers, as well as managing its own outlets worldwide.

The role of a geo-demographer at a company such as VF, Moncla says, is to understand demographic and geographic relationships, with the goal of “putting the right product on the right floors at the right time.”

Moncla, who has been involved in geographic business intelligence for over 10 years and has spoken at conferences on the topic, works by pulling together and analyzing data from a wide variety of sources. Those include typical store site selection information based on an area’s demographics, but also geographic information about store locations, consumer lifestyle information, developing trade areas, exact drive times to locations, point of sale data, and other information.

Earlier this year, Moncla convinced VF to license geographic BI software from SRC, which offers advanced market analysis tools and systems for large corporations. A key SRC product that VF is using is Alteryx, an integrated BI application that combines the functions of ETL, data quality, and analytics for business users. Alteryx includes capabilities for data access, profiling, and transformation, along with fuzzy data matching, data parsing, data quality, and reporting. It also can handle geo-spatial mapping and analytics.

To determine what products to ship where, and in what quantity, VF had already been using an outside third-party service for trade-area demographics and some profiling. Some of VF’s retailers are growing so rapidly that getting information back from that service took too long, Moncla says.

By bringing the BI function inhouse with SRC’s tool, Moncla can run detailed geographical analyses on demographics and lifestyle information about residents in the areas around stores before they even open. “Now we can be proactive. Instead of being several months behind, we’re several months ahead.” That helps VF know how much product to manufacture, where to allocate items, and the impacts of “sister” stores and competitors in an area.

The reaction to Alteryx at VF has been enthusiastic. The company originally purchased four licenses; the product has proved so popular that VF has already tripled that number. “Growth [in Alteryx’s use] has been exponential here,” Moncla says, “as people have seen what the product can do.”

Hugely Competitive Business

When it comes to making decisions about where to place new retail locations, or what to stock them with, one size doesn’t fit all. Retailing is so highly competitive that very granular demographic and lifestyle information can make a huge competitive difference. Having access to the right data and analyzing it accurately is imperative. “If you have a [competing] store that is … only one or two miles away in a metro area, depending on the type of store and the trade area drawn around it, you could [analyze the data and produce] the wrong information,” Moncla says. “You could put the wrong merchandise on the floors.”

Decisions are made by considering a huge range of information, including nearby intersections, minutes of drive-time to store locations, whether the population is growing, ethnic breakdowns, the presence of children—even up-to-the-minute information on where a local zoning committee has approved a new property.

Because VF moved to the SRC products only months ago, it’s too soon for specific return-on-investment numbers. Moncla says, however, that VF immediately saved “hundreds of thousands of dollars” in usage fees no longer paid to the third-party firm for data.

Data Storage and BI Tools Together

Along with Alteryx, VF uses SRC’s Allocate, a data storage and reporting tool that stores, retrieves, manages, and analyzes multiple sources of data. Because Allocate is largely content-independent and can work with virtually any type of data, regardless of origin or format, Moncla can use data sources from other countries and regions. “Everything [in Allocate] is based on geography,” Moncla says. “All you need is [latitude] and [longitude] information for it to work.”

Speed is perhaps one of the most impressive aspects of the package, Moncla says. “We can do all sorts of things very quickly.” In fact, when he tested Allocate’s data retrieval time “versus one of the biggest GIS [geographic information system] software packages, Allocate was 66 times faster.”

A key point in Alteryx’s favor: While Excel is limited to 76,000 records and 255 columns, Alteryx can handle 3,000 columns at once and an unlimited number of records. “I can do a cross-tab and have it bring “Now we can be proactive. Instead of being several months behind, we’re several months ahead.” back thousands of columns worth of data, right into Alteryx,” Moncla says. “It doesn’t slow it down at all.”

A macro-builder function in Alteryx allows users to build complex jobs, then collapse them and distribute them to other users in the organization who can view the data and alter some settings but can’t change the basic job settings.

Training and Support

Typical Alteryx and Allocate users at VF are analysts in each vertical product group—say, jeans wear or intimate apparel—who are generally familiar with BI tools already. They also use Brio, a BI tool acquired by Hyperion in July 2006, for example. “All of the analysts are power users who are used to analyzing data,” Moncla says. “They live in their data.” Before Alteryx and Allocate, Microsoft Access and Excel were also common data analysis tools at VF.

The SRC products have proved to be big hits. Both Alteryx and Allocate are “very, very intuitive,” Moncla says, with drag-and-drop functionality and many samples of data and analysis for users to build from. “For somebody who’s used to dealing with Access, it’s just awesome.”

When VF rolled out Alteryx initially, an SRC representative gave an overall high-level introduction. Since then, Moncla himself has handled training by working with users on specific projects. He keeps analysis projects goal-focused by asking, “What are you trying to accomplish in your [point-of-sale] manipulation?”

Users appreciate the product’s flexibility and speed, Moncla says, and its lack of limits. Access, for example, has a two-gigabyte size limit on databases, but “we haven’t been able to find a limit for Alteryx yet.”

The ability of Alteryx and Allocate, working together, to quickly return highly granular data is also popular. “When I load data into [Allocate] from Alteryx,” Moncla says, “I can [pinpoint] when a size 32 pair of jeans sold at one store.”

Another handy feature: data windows within Alteryx that allow the user to watch as each step of a job executes and data is manipulated. “When you’re dealing with millions and millions of records,” Moncla says, “you can [immediately] see the breakdown in your logic.”

Ambitious Plans

VF has big plans for both Alteryx and Allocate. In a project that is underway now, the company plans to capture select demographics and lifestyle information for each account, then put that information into the data warehouse as trade areas are updated. That means that even users without Alteryx or Allocate, but who have access to the data warehouse, will have some key data available to them at a store level, including store locations. Using that, they’ll be able to do some data analysis using Excel and Brio.

The biggest benefit of the SRC products, Moncla says, may lie down the road. That benefit will stem from giving VF analysts time to do their real jobs—analyzing data—instead of spending so much effort simply dealing with it. “With such huge data sets, it seems like we were always just wrestling with the data,” Moncla says. “With SRC products, our analysts actually have time to do the analysis, instead of just pulling and manipulating the data. It’s a nice position to be in.”

Linda Briggs -

Linda Briggs is the Founding Editor of Microsoft Certified Professional Magazine and a former senior editorial director at 101communications. Based in San Diego, she writes about technology in corporate, education, and government markets. She can be reached at