Venn Diagram

This is a weird week for me as so many people are in town for various reasons. 
Makes me think of Venn diagrams.

image

In a classic Venn look at my relationships,  one cirle can be work relations Q1, one is friends&family Q2,  and the 3rd is people I know from work but don’t work with Q3….

Some are easy: buddy I grew up with was in town.   Was great catching up,  meeting his wife.   Q2.
One of my best friends used to be a guy I worked with but he left the company about 5 years ago.   Clearly  Q2.  But sometimes a Q3 as we talk shop about various things on occasion. Q23. 

Some more complicated: guy used to be in Q1,  worked for a company I dealt with.  Now he’s with a different co.  in a different role.   Great time catching up.   Seems like a Q2 now.

Scenario today, current software vendor golf tourney,  lots of cool people,  Q1. Business dealings galore. Great relationships,  but really Q1 based.

I am planning dinner Wednesday (I am Thatplanningguy,  of course planning a dinner!) with buddy from a Research company,  Q3.  

But,  what happens when people move around companies or someone is in a Q for a long time? Do they move to Q2 of my life over time?

Several great folks in town,  some of my absolute favorite(favourite even) people.   If circumstances change at work one way way or another,  I hope they move to Q2.  I would be saddened to lose touch.

The last time I changed jobs I was sure who I would still be close with,  and was wrong on almost every one.  

If  circumstances change the dynamics of your relationships,  who will still be in YOUR circles?

Making them overlap into Q123 might be the best way ‘blend’ your life well in this globally connected life.

Time will tell,  I guess.
But for today,  I am THAT Planning Guy.

Weakest link failure

We spend millions of dollars on systems.  Planning,  Merch,  Analytics tools, registers.

We spend massive efforts developing plans that bring the right product at the right time,  and most recently at the right price. 

Buying spends huge efforts and tremendous talent on selecting the best products,  and getting the best costs.

The distribution center works hard with both technology and people to get the product in,  owned,  processed,  and distributed. 

Accounting pays for it in order to get discounts as well as keep us out of credit hold issues.
The operations team get the goods through the stock rooms onto the floor,  and Visual teams make the displays effective and alluring.

And all of this effort is worthless when the point of contact with the customer-  the sales person- fails to greet,  sell,  close. 
Only as strong as the weakest link. 

Why is the most important link in the retail cycle ‘chain’  so often the least trained,  lowest paid,  entry level person? Critical part,  often overlooked.

Like putting cheap poor tires on the performance car.   All that horsepower,  and it can’t get to the road.

FIX THE PROBLEM

-That Planning Guy

Vacation, and the the Demi-God Maui

Back from vacation. It’s always hard to come back and get into the swing of things, but alas, what makes a vacation special is the time in between them I guess.

Taking a divergence from my usual Greek God commentary to add in a few Legends of Polynesia…

The legend of Maui is one of my favorites: Maui climbed Haleakala and lassoed the sun to make it move  slower and make the Hawaiian day last longer.  As one who enjoys spending a lot of time under the Hawaiian sun, the length of the day is delightful. Sunrise, sunset, and everything in between.
(Maui did several other things, such as creating the islands by hooking the ocean floor and he and his brothers pulling up the islands…)

Sometimes when we think there is not enough time in the day to accomplish all our tasks, we could use a Demi God like Maui to lasso the time clock and slow it down to give us more analytics time in the day. Perhaps we need a god/goddess of Big Data?  ‘Datalist’ should be the God of Big Data and Analysis? Open to other suggestions~~~
In the meantime, tomorrow is Monday morning, the birth of new data to review, and Datalist will be busy.

With much Aloha,
-That Planning Guy

Planners are your Radar Detectors

I drive a fast car.  No, this is not a Tracy Chapman discussion.  Don’t delete just yet! But seriously, Wilma is very fast.  I don’t mean like Mustang GT fast, I mean VERY fast.  Some have called her a “pretty blue convertible” and you know who you are… but at the heart, she’s a beast with wheels.

Sometimes I tap the gas and find myself a few MPH over the speed limit.  It just happens.  So, I had a radar detector installed and hard wired on.  It is always on and protecting me. It is one of the highest rated, and was NOT a cheap one, one of the higher priced. Buy I researched and selected what I thought to be the best.

Last week, as luck would have it, a small Scion was next to me at a light, and we both kind of stepped on the gas a little bit more aggressively than we probably should have. My radar chirped before we crested a small hill, and I backed off quickly.  Just over the hill, the Metro PD motorcycle policeman with the radar gun pinged him, not me, and stopped him and wrote what I can only imagine was a $6-800 ticket.  Whew.  Nice save.

Companies invest millions in their systems.  They buy top of line Planning, BI, optimization tools, and replenishment systems, and invest millions if not tens of millions of dollars in these.  Shouldn’t the talent level also be ‘best in breed’ to match? The disparity astounds me.  A company will drop $3M on a piece of software, but will not invest nearly enough in the ‘drivers’ of these. 

The P&A team are the radar detectors.  We warn you of problems you can’t yet see— we can see over the hills and predict you’re about to get hammered by (choose 1 or more options below)

1-    Too much inventory: MD’s are coming if we don’t react soon
2-    Too little inventory: Chasing sales, or even walking them
3-    Too little receipts on order: Will miss future projections
4-    Too much receipts coming: Need to re-merch floor, move through old, cancel orders even.
5-    The trend has changed: We must as well. Change strategy in mid-stream? Ha, that’s Retail 101! You bet!
6-    The trend has accelerated: DRIVE the receipts
7-    Pricing… oh pricing, so near to my heart. Pricing is wrong, here’s how to fix it.

Is your radar detector the best in the industry?? Mine cost several hundred dollars >>> but the ticket would have been twice that.  The difference between the discount radar detector and the ‘best’ is less than 1 ticket costs.  What the difference between a best in breed Planning team and a ‘decent one’? Far less than the cost of not having one. If you are blindsided by any 1 or more of the above, you should have invested in your P&A team.

I once commented that Planning does not have a crystal ball, but predictive analytics (and Prescriptive even above that) can make it all look magic. In Winter of 2008, was YOUR inventory ready for what came next? 

You got a fast car
I want a ticket to anywhere
Maybe we make a deal
Maybe together we can get somewhere- Tracy Chapman

Aloha,

-That Planning Guy

(PS- I didn’t forget, I plan to re-read Sun Tzu on vacation and sure I will have some fun commentary next week… from The Beach)

Pricing analytics, revisited

I commented this week that if an item sells really well,  it is probably priced too low.   The reverse is also true.  There are no bad products,  only products priced wrong!
Is this really true? 

Part 1: if an item sells better than expected,  the perceived value is bigger than expected,  which should show in the pricing analytics.  Demand > expected demand is a pricing signal… Giving away profit. (assuming of course elasticity supports this,  and new retail X lower units is better than old lower retail X original units.) If not true, then the signal is wrong.
What about the reverse,  the part 2? If an item sells worse than expected,  can’t we just lower the price until demand is where it should be? Hmmm.   Unless it is not profitable,  in which case it was a bad product,  bad timing,  bad presentation even- and pricing is not the (only) issue. 
When you run out of pretty,  ugly sells?
But, how do you know what the right price is  to start?  What if your comparison items are wrong too? Comparing to competitors?  We KNOW we are smarter than those guys!

Perception.   Where is day 1,  and where will day 2 end? The route to success can not be short-cut.

Note: Athena was the Greek Goddess of wisdom,  justice, math… and war.   Is the connection that direct between wisdom and war? Perhaps the natural order, linear context,  direct path … Next,  let’s look at some SunTzu – Art of War. Always some fun things to discuss.
-That Planning Guy

15 minutes

I increased my workout time by 15 min a few weeks ago.   I accomplished this by waking up 15 minutes earlier.   No real magic there. Now I do a solid hour on the elliptical machine.  
I have noticed some interesting things that have happened,  and a trend.  The first 10-15 min I am just getting going.   Minor effort,  heart rate not yet really in the Zone.  (big fan of HR based training,  all about the data!)
The next 30 minutes are kind of a grind.  Heart rate better,  just flowing along.  HR good effective,  efficient workout.  
It’s the last 15 min that bring me to here. This is when I am fully warmed up,  all aches and pains better,  and I am in  ‘countdown to be done’ mode.   Can step on the gas.   These minutes are greater exertion,  and obviously greater effect. 
OK,  where you going with this  one,  Planning Guy?
Analytics follows the same pattern.   (you knew that was coming by now!)
First block of time is gathering data.   Pulling sources,  building queries,  filling tables.   Necessary,  but not anywhere near the end game. 
Stage 2: assembly.  What goes with what.   Where is this pointing?  What joins the data points?  How do we present to make sense? 
Final group : Insight.  When we reap the fruit of the labor.   We bring home the answer.   And we are JACKED about what we now know. 
So,  how do we get more time in phase 3 and less in phase 1? I can wake up earlier.  So how do we WAKE UP  earlier in this world of analytics?

-That Planning Guy

Next speaking engagement

Looking to meet me or see me live? Well then,   buckle up and catch this great event:
Marketing Analytics Innovation Summit.  Should be a great event.

https://theinnovationenterprise.com/summits/marketing-analytics-innovation-chicago-2016?utm_content=buffer4e17d&utm_medium=social&utm_source=linkedin.com&utm_campaign=buffer

What do you do?

Recently I was asked to explain what I do to our new ‘HR Partner’ who was meeting everyone in the division to gain an understanding.  Seems easy.

I have written many job descriptions, including my own, and re-written many times, as have we all. But what we submit for HR, for job openings, for Monster or LinkedIn postings, is that what we DO?

Planning is the forward-looking financial arm of Buying.  We look at historical info, re-seasonalize, smooth out anomalies, and project (and re-project) We work in season, pre- season, and post season, all at the same time. We determine the best course of action to flow inventory- when (timing), how much, method (DSD, Whse, drop ship)
Planning uses analytics, planning sometimes creates the analytics.
Planning interfaces with DC, Stores, managment, buying, leadership, and each other.
We determine markdown plans, exit strategy, replenishment and allocation algorithms.
And now we drive pricing decisions using elasticity and demand signals.

But what do we do? A course I once took said you should be able to boil your job description down to a few words, fewer the better:

Planning: We give data-driven advice.

-That Planning Guy

Put the needle on the record

Records became cassettes,  cassettes became CDs,  CDs became mp3…. Evolution.

What has changed in retail?  We can talk e-commerce,  omni-channel,  endless aisle,  b-b,  b-c all day,  and believe me we have.   But over 90% of transactions are still in a physical store. 
The Greeks had Agora marketplaces dating back over 500 BC,  2500 years ago.  Merchants sold their wares.  People came and congregated.   Food was eaten.
Isn’t that a open air mall?  The Grove in LA,  Horton Plaza San Diego? 
So what has really changed and evolved that much in retail?  SPEED. 
Today’s shoppers want it now,  better, faster,  cheaper,  but NOW.   The merchants also have to be faster.   The quick or the Dead is really a fair assessment of today’s retail landscape.  
We in analytics need to provide amazing details,  Great info,  great insights,  but we need to provide it NOW.  Yesterday would have been even better.  We need goods in the stores now.   Vendors need to ship now.  Now.  So how do we keep up?
We need faster systems, more powerful engines,  stronger algorithms,  and  a leaner supply chain.  But we have all that now.  What’s the next progression?  What comes after the Mp3? (or any digital format,  semantics)

What will the future mall look like? The Millennials  of are course accustomed to buying online,  ship to store,  or next day shipping.   What will the next group expect? And how do we not only get ahead of that, but actually LEAD the charge?
He who answers this question wins retail in the 2020’s

-That Planning Guy
(yes,  was listening to MARRS,  Pump up the Volume, at the gym.   I had the album,  the tape,  the cd,  and now on Google play. )

Sir Isaac

For every action, there is an equal and opposite reaction.
Feeling Newtonian this morning.
(third law of motion,  for you physics nerds.)

If you want to change the outcome,  change the inputs. 
If you change the inventory levels  sales will change.  Be sure the outcome is what you want.   If it isn’t,  there are other inputs you may not be factoring.  Traffic,  price,  selling,  conversion rates,  friendliness of staff?  All variables.
 
If you add time to your workout,  your results will change.  Phase 3, added in   another 15 min a day.  Wearing me out.. But results better be better.

-That Planning Guy