IOD 2013 3683 Post_Russell v2 5

Session Number 3683
Paula Post, The Bon-Ton Stores, Inc.
Dan Russell, Armeta Solutions, Inc.
Bon-Ton Department Store Chain
Enables Merchant Organization with
First-Class Analytics

2By Merchants. For Merchants.
S t r a t e g i c
M e r c h a n t
A n a l y t i c s
Table of Contents
 Introduction to The Bon-Ton Stores & Armeta Solutions
 Assessing the State of Analytics at Bon-Ton
 Building a Roadmap to Success – “By Merchants. For Merchants.”
 Delivering Analytic Tools to Empower the Entire Org Chart
 Q & A

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
The Bon-Ton Stores, Inc.
 Department store chain (est. 1898)
 Currently 272 stores in 25 states
 7 nameplates total
 Recent growth via acquisitions
• 2003 Elder-Beerman
• 2006 Carson’s, Bergner’s, Boston Store,
Herberger’s & Younkers
Paula Post – Group VP of Merchandise Optimization
Bon-Ton Locations

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
Bon-Ton’s Market Positioning
 The hometown store
 Fashion-forward brands
 Upscale presentation
 High level of service

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
 Focused Exclusively on Analytics
• “This is what we do.”
• “Hybrid” resource that speaks technology but thinks business
 Analytics Specific IP
• White Paper – Democratization of Information
• MILESTONE – Analytics Assessment Engine
• RAS – Retail Analytics Suite
 Extensive Retail Experience
Armeta Solutions, Inc.
Dan Russell – Director, Client Engagement

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
 Q & A
Table of Contents

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
The Old General Store
The general store owner knew
everything around him:
 He knew his customers
 He knew his store
 He knew his products
 He knew his business
The Ultimate in Customer and Product Intimacy

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
The Effects of Mass Production
The Low Cost Provider Model Changed
Everything
 Economies of scale became the core
business driver
 Standardization was repeatedly stamped
out across every local market
 Needs assessment and new product
awareness became the consumer’s
responsibility (rise of “caveat emptor”)
 Bon-Ton affected both through growth and
consolidation of buying offices across
nameplates
Local level of customer and product intimacy
largely lost as retail landscape evolved

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
 Do more with less by enabling
merchants with proper mix of analytic
tools
 Get back to the local level of intimacy
that the general store manager had
in previous generations
 Reconnect with customers alienated
by the changes that resulted from
acquisitions and standardization (and
win new ones)
Leverage Technology to Drive Intimacy and Reconnect with Customers
Leveraging Technology to Reconnect

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
Assessing the State of Analytics
In early 2013, a team from Armeta Solutions led a 12-week engagement
with the following goals:
 Assess Bon-Ton’s analytic culture
 Evaluate the technical components currently used to deliver reports
 Set a vision for the future of analytics at Bon-Ton
With the assessment complete and the vision in place, the project
culminated with the completion of the following:
 Develop a set of tenets to guide decision-making
 Create a roadmap to achieve the vision of “Strategic Merchant Analytics”

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
Key Finding: Merchants Overloaded with Data
 Everyone is very busy compiling reams of reports, slicing the business from every angle,
often every single time
 Each buying office talks about how their business is unique
 Yet, there is lack of corresponding growth in business
Item
Analysis
Reporting
PO Log
Financial
Reporting
Stock Ledger
Reporting
XLS-based
Planning
Tools
Data Dump
Mechanisms
Reporting
Standard-
ization
Other
Power User
Tools
Plus “one-offs”:
• Web uniqueness
• Individual sources
• Unique Excel lookups
• etc.

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
Key Finding: Data Dumps, Not Analytics
Existing reports were difficult to execute and returned huge data sets
that were normally dumped into spreadsheets for further processing
Examples

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
The Bon-Ton’s Analytics Maturity
Apathetic
TODAY
Report on Everything – Analyze Little
FUTURE
Information as a weapon
Laggard
Reluctant
Middle
of the
Pack
Fast
Follower
Reaching
for the Top
Visionary
Tip-Toe In Pragmatist
Up and
Coming
Analytics Maturity Model

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
Technical Assessment
 Major components to facilitate building of first class analytics were already in place
• Properly sized data warehouse appliance (IBM PureData N1001-10)
• Enterprise business intelligence software
• Plus, implementation of IBM Sterling Order Management system was already in-process to
ultimately enable better management, visibility and reporting on orders
 However, performance issues with existing reports were substantial
• Up to 10% of report requests were “timing-out” on a typical Monday morning
• Poor performance was exacerbated by concentrated concurrent use at peak times
Performance concerns needed to be alleviated immediately in order to allow
for the addition of new, interactive capabilities

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
Technical Assessment
 Analysis uncovered opportunities for improvement on the configuration and tuning
of the PureData system and reporting software
• Data model with inconsistent design had been recently ported over as-is from HP Neoview
hardware
• While the data model worked on the PureData platform, it had not been tuned to take
advantage of the new architecture
• Even so, performance gains at initial migration to PureData were substantial enough such
that no further investigation was done at the time to optimize and prevent further “design
rot”
• SQL generated by the reporting tool was often not accessing data in alignment with the way
it was distributed across nodes and organized within
 With alterations to report configuration as well as the re-organization of data on
the PureData system, performance was quickly brought to acceptable levels
• All “time-outs” were eliminated and overall performance increased by 5 to 10X
No major obstacles were determined to stand in the way of delivering new
capabilities on existing platform

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
What Was Missing?
 All of the right components appeared to be in place…
• PureData data warehouse appliance on new MPP technology
• Advanced reporting/BI software
 …Yet merchant reporting was completely ineffective
 Merchants were forced to make decisions without:
• Actionable insights
• Interactive “speed of thought” analysis
• Information at their fingertips (immediate and easy)
 Stores were being merchandised the same despite obvious variances in
customer preferences across regions, nameplates and other distinctive factors
• Consolidation of buying offices across nameplates had led to homogenization
• The ability to intelligently cater to different store groups was very limited
Merchants were not enabled with the proper mix of analytic tools

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
Lessons Learned from the Web Revolution
 Well-designed analytic tools should be just like any great website
• Asking merchants to access sales data is comparable to asking an
untrained customer to access your product inventory via a web browser
• There will be no adoption without a well-designed, user-engaging and
interactive experience
 Great web design requires a savvy resource that speaks technology but thinks
business
 Similarly, analytics requires that “hybrid” resource to set vision, design
interfaces, consider process integration and put the rubber to the road
Building a Website Building Analytics
Key Components: Web Server & Browser Data Warehouse &
Reporting Tool
Engaging Factor: Intelligent web design < missing >
End Product: Engaging, interactive website Strategic Analytics
Building great analytic tools should parallel the process of building a great website

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
Enabling Merchants with Proper Tool Mix
The Core User *
• Common business analysis
• As easy to use as the internet
The Power User
• “One-off” analyses
• Excel jockeys & query tools
The Scientist
• Science projects
• SQL and SAS tools
Lack of appropriate analytic tools was forcing core users to instead
attempt to utilize tools suited for power users – a need was identified
to deliver new capabilities to enable the core 80% of merchant users
*

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
 Q & A
Table of Contents

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
“By Merchants. For Merchants.”
 Consistent merchant involvement key to driving adoption and successful
change management
 Not just involvement, but ownership – all key design decisions made by
representative group of merchants
 All levels of the org chart involved to ensure consistent buy-in and
support
Group Meeting Purpose Frequency
Merchant Design Team Requirements, design and testing Weekly
Key User Reps Design tweaks and validation Monthly
Steering Committee Executive strategy and prioritization Bi-monthly
Entire Merchant Org Overviews, release previews and new
tool introductions
Quarterly

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
Educating Merchants on Analytics
The right
Product
…at the right
Price
…at the right
Place
…with the right
Promotion
The 4 P’s of
Merchandising
The right
Information
…at the right
Frequency
…to the right
Person
…with the right
Presentation
The 4 Goals of
Analytics Example:
All products 50% below plan
… at the beginning of each day
… to the Merchant
… in a PDF on the iPad/ laptop

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
Using analytics to answer everyday questions:
Where did the Packers go wrong in 2012?
Goals:
1. Demonstrate the difference between
“data” and “information”
2. Illustrate the meaning of “easy to use”
and establish a litmus test for what a
“proper tool” should look and feel like
Establishing a Vision for the Merchants

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
Tons of Data
(every NFL play from 2012)
…but it also takes a ton of
effort to find the usable
information buried within
Using a Spreadsheet Full of Data

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
Ranking
Builds context,
relevance
Visualization
At a glance,
the message is
obvious
Top/Bottom Performers
Impact players always top of mind
Easy-to-use website full of information
Analyzing your own business should
be as easy as checking up on your
favorite football team

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
Performance Trend
Monday Morning – Pulse Check
Performance by Store Profile
+5.7%
Sales v LY
24.4%
RP Sell Thru
15.9%
GM
8.1%
eComm %
Top Sellers
1.
2. Pant Separate (Vendor A)
3. Billowy Blouse (Vendor B)
4. Bling-Back Jeans (Vendor C)
5. Pocket TShirt (Vendor D)
Three Quarter
Sleeve Cardigan
(Vendor A)
$120.00 / $59.99
Sls WTD: $ 3,226
Sls STD: $17,482
RP Sell Thru: 56%
Low Stock Warning
1.
2. Sun Dress (Vendor A)
3. Billowy Blouse (Vendor B)
4. Bling-Back Jeans (Vendor C)
5. Pant Separate (Vendor A)
Classy Pencil
Skirt
(Vendor E)
$170.00 / $68.00
Sls WTD: $ 2,136
Sls STD: $ 4,482
RP Sell Thru: 62%
Sales Analysis Inventory Management Vendor Spotlight
0
100
200
300
400
500
600
Large Stores Medium Stores Small Stores
This Year
Last Year
(Net Sales Dollars in thousands)
0
500
1000
1500
2000
5/27 - 6/2 6/3 - 6/9 6/10 - 6/16 6/17 - 6/23
Actual
Plan
LY
(Net Sales Dollars in thousands)
Hierarchy Level: DMM2 Timeframe: STD
Profile Type: Store Size
Name Plate
Competition
Imagine Bon-Ton analytic tools
“as easy to use as the internet”

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
Statement of Vision
“Improve business performance by creating
a highly adopted, merchant-designed
reporting system that reveals insights and
enables actionable data-driven decision-
making via world class analytics”
– created by the merchant team

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
Tenets to Guide Progress
Easy to Use
New capabilities should be as easy to use as the internet – this simple litmus
test will be used to assess usability and ultimately drive high adoption rates
Designed by Merchants
Consistent involvement from merchant representatives is required to ensure
success – an informed proxy must be sent when an absence is unavoidable
Built for Viewing, Not Printing
Focus of new development will be to create analytic tools that are visual and
interactive – legacy systems may continue to be used to satisfy print requirements
Visual in Nature
Relevant information should jump out at the user – there should be no requirement
to dig through countless rows and columns to answer simple business questions
New Merchant Reporting Capabilities Will Be …

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
Tenets to Guide Progress (continued)
Focused on Insights
Insights and exceptions will be valued over comprehensive detail – legacy systems
may continue to be used until new capabilities ultimately satisfy all requirements
Merchant Focused
The needs of the merchant organization will be the top priority – consideration will
be given to the needs of other groups but should not impede rapid deployment
Delivered with Speed
New analytic capabilities accurate enough to support directional decision making
will be deployed – perfection will not be required to proceed
Released Iteratively
It is better to deliver analytic insights quickly rather than pursuing an all-
encompassing release – utilize time-fenced approach over traditional methods
New Merchant Reporting Capabilities Will Be …

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
Inputs to the Strategic Roadmap
Interviews
Workshops
Strategic Roadmap
Stakeholder
Input
Technical
Assessment
Prioritization
Exercises
Cross-Industry
Best Practices
Strategic
Framework
Armeta’s
Experience

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
Sales Performance
Store Insight
Revamp Attributes
Pricing / Markdown
Sales II
Strategic
Roadmap
The Strategic Roadmap
Revamp Hierarchy
Inventory II
Store II
Inventory
Vendor
Q1 Q2 Q4 Q2 Q3 Q4 Q1Q1
2013
Q2
2014
Q3
2015

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
Sales Performance
Store Insight
Revamp Attributes
Pricing / Markdown
Sales II
Strategic
Roadmap
Revamp Hierarchy
Inventory II
Store II
Inventory
Vendor
Q1 Q2 Q4 Q2 Q3 Q4 Q1Q1
2013
Q2
2014
Q3
2015
Progress Along Roadmap
OverallUsageofAnalytics
New Releases 1 2 3 4 5 6 7
Merchant Analytics Usage Over Time
= Existing Reports
= New Analytic Capabilities

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
 Q & A
Table of Contents

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
Mapping Tools to Key Business Questions
“How are we performing?”
Pulse Check
Visual dashboards that answers
high-level business questions at a
glance
“What is driving business up/down?”
Business Drivers
Ranked exception reports that let
you know which factors are
driving your business
“What actions can I take to affect change?”
Spotlight
Focused dashboard that provides
detail you need about a specific
thing in order to take action
Key Business Question SMA Tool Type

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
“Pulse Check” Dashboards

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
“Business Driver” Reports

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
“Spotlight” Focus Dashboards

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
Continuing Down the Roadmap
 The initial SMA release enabled all merchants with a new way to easily
analyze the performance of their business
 With the new framework now in place, subsequent releases will be
focused to deliver additional insights aligned with key corporate initiatives
 The current release will uncover opportunities that exist to treat store
groupings differently in order to better connect with customers and drive
profit
 Future releases will soon be executed to manage inventory more tightly,
build stronger relationships with vendors and optimize pricing and
markdown strategy
Less than a year into the new strategic roadmap, technology has already
been successfully leveraged to provide merchants with easy-to-use,
insightful analytic tools that are helping them to connect with customers,
drive sales and boost profit

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
 Q & A
Table of Contents

S t r a t e g i c
M e r c h a n t
A n a l y t i c s
Contact Information
 Paula Post
• Group VP of Merchandise Optimization
• The Bon-Ton Stores, Inc.
• Paula.Post@bonton.com
 Dan Russell
• Director, Client Engagement
• Armeta Solutions, Inc.
• Dan.Russell@armeta.com

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IOD 2013 3683 Post_Russell v2 5

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