Wednesday, October 20, 2010

Out of "diseconomies of scale" retail cycle ice BI



Escape from the "scale of economy" cycle

After beginning to take shape when the information systems, retail store sales data every day, holding forth together to the headquarters, day and night to devour the server's disk space. But the data is not used, the more the more garbage. How to make real-time data about the key operation, so that the leaders in the data that crisis and opportunity behind, become the forefront of information technology at the local retail business in general focus.

In the supermarket, when the salesgirl scanned after you buy the goods, POS machines will show some information, then a friendly salesperson will ask you: "We have a disposable paper cup is a promotion in the F6 shelves, do you want to buy ? "At this point, you may be surprised to say:" ah, thank you, I just could not find a cup. "

This is the support of Wal-Mart in the BI system to achieve the "lean marketing" of an example. Even if the computer system as early as good, if customers cart napkins, large bottles of Coke and salad, then the possibility needs to buy 86% of disposable cups. Provide the decision support is its located in the United States, a huge, worldwide via satellite and store real-time connectivity to all enterprise data warehouse.

If its attention to the local retail industry, is likely that most consumers do not have such a shopping experience. Although, this line like Suning Appliance has BI into the large retail business, but everything was just a starting point for most local retailers, and even still to mention the start, let alone high-level BI applications based on the.

And this situation can also Teradata data warehouse provider in China in recent years, retail business development situation to see a little inkling. Although it is difficult to obtain Teradata's sales data in China, but one thing is certain, the company's retail expansion in domestic and foreign form a very sharp contrast, even with the domestic, retail and other sectors of the contrast It is fairly obvious. Teradata is a provider of retail data warehouse started, has been more than half the world's hundred retailers in the bag to enter the Chinese market over the past decade, although it approached constantly and local retailers, but so far few have a single floor; in the domestic telecommunications and financial industries, Teradata's sales are impressive.

Escape from the "scale of economy" cycle

Local retailers do not need BI? Obviously not. On the local retail business, "diseconomies of scale" and criticized, from time to time in the last two years, brought by the industry, but data supporting this assertion abound. From 2003 made by Tsinghua University SEM report on "Foreign large-scale retail enterprises more competitive research" paper can get a lot of strong support for the data.

In 2003, local retail businesses achieved sales growth of 39.4% on average, one to Beijing Wu Mart topped the growth rate of 76.3%, while the average growth rate of foreign enterprises is only -0.7%, the fastest-growing Wall Ma also only 11.7%; the same time, local enterprises to increase the speed of the average sales area of 36.5%, much higher than the 4.2% foreign enterprises, including the fastest-growing Suning growth rate 67.9%, far higher than Waugh Erma 8%, fully reflects the scale of the local retail industry in recent years, rapid development momentum.

However, from the profit perspective, local retailers profit growth on average only 17.1%, lower than the foreign enterprises 23.1%. Combined with local companies to increase sales growth and business area growth rate of these two indicators, in terms of average or optimal value terms, the average level of foreign enterprises are 6 to 9 times; and profit growth was lower in foreign enterprises. To some extent this reflects the scale of China's retail enterprises have expanded rapidly, but more extensive operation, costs, expenses have not been effectively controlled, so profit growth.

In practice, Wal-Mart to shop on behalf of foreign companies is not high speed. 60s in the 20th century, 8 years, Wal-Mart's shop rate is an average of 2 to 3; 70 years in the 20th century, the average annual increase of 26; in the 20th century, 80's, the average annual increase of more than 100; 90 years in the 20th century, the average annual increase of more than 200. Although the increase in the number of stores each year well over sixties and the seventies, but the percentage increase was smaller than in the past.

Today, a few years ago, the data reflected in the domestic retail enterprises in China, "diseconomies of scale" phenomenon has not been substantially changed. Because of this, the most intense battle in the expansion of home appliance chain, with the leader of Suning Appliance and GOME are beginning to shift the focus of competition benefits a single store, rather than simply the scale of expansion. Suning Appliance Following the success of last year spent 80 million on-line SAP / ERP system, this year in June, but also with the IBM Corporation in the ERP system optimization, data mining, analysis, enterprise SOA platform, financial organizations, optimization, human resources training, member services, storage distribution and other projects to cooperate. Suning Appliance's efforts in this regard has been very good return, after adjustment for 2006, management improved results in the fourth quarter of 2006 reflected a single quarter expense ratio compared with the same period in 2005 a sharp decline. In addition, management improvements also enhance the effectiveness of a single shop. One-quarter results in 2007: a simple weighted single-store sales up 24.65 million yuan, up 10 percentage points; simple weighted income per unit area of 6,000 million, up 15%. Multiple disabilities to be a breakthrough

Since objectively speaking, the domestic help of local retailers in general requires meticulous management BI technology, but why delay a substantive step? China Chain Store & Franchise Association Information Technology Committee and deputy director, Vice President of Beijing E-Commerce at the same time as the Chinese company Wincor Nixdorf Retail Systems Division General Manager Yang Dehong explained from two aspects of the reasons.

First of all, Yang Dehong that, in the sense to make some adjustments for local retail business leaders who might be a more effective way. For example, he said, in today's retail business, whether domestic or foreign, good manager is very scarce. However, faced with such a problem in practice on domestic and foreign retail enterprises but there is a big difference, reflecting domestic and international retailers using cutting-edge information technology to solve business problems of consciousness between. In general, local retailers will be paid through the recruitment, training, and even the traditional way, step by step master train an apprentice train a good manager.

In fact, very risky to do so, not only took too long - to develop a qualified manager usually takes several years or even longer, and, if the personnel selection errors, is likely to spend time, money, and after can not train a qualified manager. Even if the train a qualified manager, then the experience is also extremely difficult to copy.

Correspondingly, according to Yang Dehong introduction of foreign retailers is usually a good practice is to store manager to deal with every day issues, as well as the best process to address these issues, through abstraction, induction into the enterprise information system. Thus, even a limited level of manager, the best process in accordance with the daily affairs, with the result although not necessarily the best, but certainly not bad. Do not only protect the manager of the management of all uniform, and some stores will not be outstanding performance, while some shops make ends meet the situation. Moreover, companies do not need the long process of cultivating talent.

"Most of the retail business, whether domestic or new product into the store site, whether it is in full use of information as a basis for the case to make it? Clearly, retailers have not land to dig deeper value of IT systems." Yang Dehong that consumers get from any data, are business resources and capital, while the current system of retail enterprises, collected data on consumer research functions of small retail businesses in the information they need process in the make up and perfect.

Yang Dehong The second obstacle is the data analysis methods. And BI is a business closely related to the application layer, so a different business model in the analysis, process and so will there is a big difference. Therefore, many methods require personalized support, this and closely related to the enterprises themselves. Therefore, Yang Dehong that even if the foreign retail enterprises mature BI system copy to domestic enterprises, the application is unlikely to produce the same effect. To ASN (Advance Shipment Notices, advance shipping notice) system, for example, in foreign countries, mainly through analyzing the system supplier orders and other information, timely dispatching warehouse, transportation, distribution and other related resources to improve efficiency and realize Careful management of goods. Although some domestic retailers ASN also launched its own system, but application has been changed, ASN become a supplier of retail assessment tools, such as whether the agreed delivery time, and so on. Urgent need to improve the ability of endogenous growth

In addition, there is no extensive data for analysis of high-quality retail and enterprise applications is a major obstacle to BI systems. Teradata Data Warehousing Division, Greater China CEO Wu Fu World in the question why the delay in local retail enterprises start to deploy the data warehouse made: In the past few years, despite China's domestic retail business of information technology has made remarkable results, but so far, compared with international peers, the overall level of information is still not high, the system construction is still in the exploratory stage, many aspects of the design is not comprehensive. This has resulted in the current retail business information system to replace the high frequency, very few systems use more than 5 years, generally three to four years would have to replace the new system has. This resulted in many historical data is lost or damaged, data of poor quality and not rich. So even if the data warehouse system may also face the dilemma of no data available for analysis.

Yang Dehong in the interview made a similar point of view, he believes that many retailers currently in data collection on information systems are inadequate, resulting in data analysis, no start. He also, for example, there is little information system to mineral water bottle of the type, appearance and other information collection storage, and there was little to link the system's features can capture pen down, so, for the consumer propensity to consume in this area analysis has no way to start the.

Ice or in front of

"In the past, department store business advocate goods first, but now is shifting customer first." CIO Building Beijing Cui Wei High photosensitive CIO at the Fourth China Forum on retail clients stressed the importance for retailers. High photosensitive believes that only through the information system of data analysis, we can more fully understand and better customer service.

CRM BI technology just is an important area. He has served as a domestic supermarket chain private enterprise CIO and Technology Co., Ltd. Fuji Cyclones senior consultant Lin Jing retail information technology experts believe that the card voucher system from the early application to today's customer-centric marketing concept precision, the domestic retail enterprises understanding of the CRM has experienced more than a decade long journey. After beginning to take shape when the information systems, retail store sales data every day, holding forth together to the headquarters, day and night to devour the server's disk space. But the data is not used, the more the more garbage. How to make real-time data about the key operation, so that the leaders in the data that crisis and opportunity behind, become the forefront of information technology at the local retail business in general focus.

Then, using data mining, intelligent analysis, so that play huge data-driven and value of the energy marketing business, the retail industry is gradually becoming the new trend of IT applications. In addition, some data warehouse provider, the price began to break the ice, introduced to allow the low margin retail business features for the industry to accept the low-cost data warehouse. Perhaps this will retail ice-breaking journey BI applications provide a new impetus. Information technology through ongoing, Suning has received to improve the management of returns.

Some industry leaders have also taken a lead, set a benchmark for other companies. Some retailers have already made in data mining attempts, they are no longer just the use of information technology to capture sales information for inventory management and supplier relationship management, but try to enter the information for marketing and higher stage. It is understood that Cuiwei building now has a variety of VIP membership card a few hundred thousand copies in their mass and effective use of information, and conducting customer relationship management, through system integration, development of a general statement, data mining, data model and a variety of graphical analysis, for each marketing campaign, based on an analysis of marketing information to determine the scope, intensity and time, with minimal marketing costs to create the best value for money.

In fact, according to Wu Fu World presentations, industry competition is promoting the application of BI technology, an important driving force. Previous years, retailers have been expanding in size among the competition, but also rarely involve the management of the competition, and now, with the expansion of the scale, the management is difficult to obtain timely management of all store data, relevant statistics lag. In particular, some major retail groups are not independent from the market, established businesses, but doping with excessive administrative interference, causing part of the integrated subsidiary of the retail group between the various sub-modules a dubious, seemingly one, but actually their own way - Information can not be shared, the data can not be integrated, distribution can not be unified. Thus, to improve management and reduce costs, integrate the upstream supply chain, will become the retail business for some time in the future to face the challenges of survival.

If, in the past 5 years, the focus of competition among retailers is limited in-store competition for resources; then in the "diseconomies of scale" phenomenon is expressed increasingly prominent when, in the next five years, retail business competition The focus will shift to rely on information technology to improve management and reduce the cost up.

Information infrastructure for the backwardness and weakness of information awareness, Wu Fu World that the local retail business in the front line, this obstacle is being gradually break. He said the retail sales in the first 10 enterprises have already basically have the deployment of enterprise-class data warehouse based on conditions.

Comment: urgent need to improve the endogenous capacity for increase

In the "scale of economy" status, many enterprises have tasted the blind expansion, do not pay attention to the consequences of endogenous growth, expansion of a number of supermarket chains face the cold. For example, Century Mart closed in Shijiazhuang, Shenyang and Guangzhou, some of the stores; Tianjin Home World Group in the expansion of the capital chain problems, the have to sell their home and some supermarket chains, in March this year, in turn the world's supermarkets sold to the whole of China Resources Group, withdrew from the supermarket retail industry. With the expanding number of retailers eager to experience the cold expansion, a number of industry sources, retailers need to reconsider the issue bigger or stronger, than simply the scale of expansion, emphasizing endogenous growth is more long-term health strategy.

Thus, to the refinement of the core BI management has become a local retail enterprises to enhance endogenous growth forces an important tool. Objectively speaking, China's domestic retail business has to have attention to BI application stage. Lin Jing in the past year, a systematic study on the retail CRM after that, if the "customer-based precision marketing" smart CRM comparison to GPS (global positioning system), the local retail industry, small and large ships and fleet, it is possible no one is equipped with GPS, but still use the old "compass." A "Compass" encounter "GPS", local retailers and foreign large-scale retail enterprises is an unequal fight for survival.







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