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Thursday, November 15, 2012

Target Experience with IBM DemandTec

I was pointed to a video interview with Shelly Hyytinen,VP of Merchandising Process and Systems Development at Target Stores.   An excellent view of how Target was introduced to IBM DemandTec's use of optimization science to address price and promotional planning optimization.

In particular I liked this interview because it also dealt with how deep analytics could be sold to the internal users of the 'art' of promotion. This is another example of the combination of design and analytics mentioned a number of times in this blog recently.   You still have the experience of old style merchants, but now how they can be empowered by new technology analytics.

The video also includes some specifics of how Target is using analytics to better understand their 'guests'.   And having been involved with them from the suppliers perspective,  the increasing importance of the ability of the retailer and the supplier working from the same set of historical and forward looking data.

Finally, a look at how strongly Target believes in the future of retail analytics, and the need to predict the expectation of mapping the needs for both online vs in-store channel consumer expectations.

Excellent interview looking at the risks of new technology, their mitigation and the forward looking needs of both retailers and suppliers.

Target outlines their key benefits derived:

Combined user-friendly software with scientific algorithms that generate optimized decisions with predictive analytics

Helped Target merchants reap the rewards of a science-based approach to making core merchandising decisions about range and price
Improved sales units, dollars, and gross margin; enhancing customer price perception


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