Metro is an established retail brand and progressive retail business under Metro Holdings, a property and investment group with a turnover of more than S$194.3 million in FY2014. Metro operates a chain of five department stores in Singapore. The Metro team constantly collects a variety of data at these stores to gain valuable insights into peak and lull shopping periods, inventory flow, and customer purchase behaviors. By analyzing the trends, the team is able to effectively plan operational and promotional strategies and consistently improve efficiency and sales performance.
With help from the rapid-fire analytics software Tableau, Metro has successfully integrated the use of data analytics into its retail operation. With this, the company has enhanced the way departments work and communicate with each other, streamlined logistical support to retail outlets, and designed customer-centric promotional campaigns.
Singapore’s retail landscape
The wholesale and retail sector is one of the largest contributors to Singapore’s gross domestic product (GDP), generating an estimated S$55 billion in 2012. A recent study also puts Singapore among the top 20 retail markets in the world. Retail stores in Singapore, such as Metro, also create jobs for over 100,000 workers nationwide .
Metro’s management realized early that shoppers are now making more informed buying decisions, mainly due to the accessibility and convenience of online shopping. The team needed to quickly react to changes in the market landscape to remain competitive. To do that, they needed an effective business intelligence tool to accurately slice and dice the data and help them gain insights into their business and the market.
Data challenges and key considerations
Metro’s Head Business Analytics, Customer Relationship Management (CRM) and Merchandise Controller Erwin Oei shared that his team was looking into transforming data from multiple sources into useful information. Additionally, they wanted an easy-to-learn, fast-to-implement solution.
However, they quickly ran into a number of initial hurdles. They were faced with data in many different formats coming from different sources.
“We had sales data in data source A, transactions data from source B, and customer data from source C. To put all these together, we need to extract data from multiple sources,” said Erwin.
Managing the large quantity of data that they have was also a major challenge. Erwin explained: “We keep about 10 years’ worth of historical data comprising detailed information like customer purchase and payment methods, and supply chain history—this amounts to many terabytes of data.”
Previously, the team used spreadsheets to analyze some of the data. Staff had to manually retrieve selected data and key them into a system for them to be analyzed—an extremely time-consuming process.
The IT department also received multiple requests for help in creating reports. This created frustrating bottlenecks that IT could not fully clear. It took weeks before a report could be produced, by which time the business situation may have already changed.
Long term solution
The Metro team decided on Tableau after evaluating several business intelligence solutions in the market.
“We feel that Tableau is the only solution available in the market that allows for the fast implementation of data analytics,” Erwin said.
“With Tableau, what used to take us weeks has now been reduced to seconds. One of the core priorities in our decision making process was that the solution must be easy for the end user to learn and use,” he added.
Currently, Metro analyzes data from a centralized data bank using Tableau. Almost all the key executives and backend users have access to the software. Nine dashboards have been created covering sales performance, inventory tracking, and customer relationship management.
With fast and flexible data analysis, the Metro team is able to specifically target shoppers with specialized marketing campaigns. Tableau analysis on supply chain data has allowed the team to effectively and efficiently manage its inventory costs.
“Analyzing customers’ buying history, we are able to develop customer behavior profiles and determine the types of products that they prefer. With this, we can specifically target them with promotions most appealing and relevant to them, helping us to save on advertising costs and improving customer satisfaction,” said Erwin.
Tableau has also opened up a variety of opportunities for Metro. One example is when the Metro team looked into data of popular shoe sizes and discovered that customers rarely purchased half sizes. As a result, the retailer stocked more of the popular sizes and significantly reduced the problem of overstock of inventory. In turn, this has led to savings in markdowns, storage costs, and opportunity costs.
The company actively tracks the in-store movement and buying behavior of its customers to determine key shopping days down to the time of day. With this information, management is able to deploy staff to the different departments on the sales floor, as well as strategically organize the floor space to stimulate customer purchases.
Metro’s data-driven culture
Decision making across Metro has evolved from that of a personal experience or ‘gut feel’ to that of being data driven, information supported and more scientific approach, according to Erwin. The company has also set up a Business Analytics division to spearhead the ‘data revolution’. The team has since been integrating data analytics into almost every part of its operations and Tableau has quite literally changed the way the company works.
Metro is actively building a data-driven culture across the organization. Erwin believes that this would be helpful not just for decision makers but also the employees at the frontline in the retail business. These are the people who are key customer touch points, and instrumental in driving the business forward. Erwin believes that it is beneficial for these employees to see and understand the data and understand the rationale behind key decisions.
“Tableau has helped empower our end users—the people who drive the business. Users are able to personally interact with the data and come up with their own conclusions. This has greatly increased our overall productivity and helped us to effectively manage costs and increase sales. Also, unproductive hours spent on manual extraction of data and creating reports have been cut down,” Erwin summed up.
In the two years that Metro Singapore has started implementing Tableau, it has had such a significant impact on Metro’s business that the company plans to push data analytics to its nine stores in Indonesia.