These days, food distributors are not just managers of products that have to be stored and moved to the right place at the right time. They are also managers of the data representing those products; data that, likewise, have to be stored and moved to the right place at the right time.
And just as the physical warehouse is a key tool in the managing of products, the data warehouse is a key tool in the managing of data.
Data warehouses don't just store data -- they enable retailers to drill down and find just the right information, and increasingly do it in real time with minimal drains on IT resources, observers told SN.
These capabilities are putting data warehousing technology on the radar screen of many food retailers. In SN's Ninth Annual State of the Industry Report on Supermarket Technology (SN, Feb. 10, 2003), data warehousing was regarded as a high priority in both 2002 and 2003 by 28% of respondents to SN's survey, placing sixth on the list of high-priority technologies in both years.
"A data warehouse affords retailers the opportunity to manage their business more precisely," said Gene Sullivan, vice president of the central region for Teradata, a division of NCR, Duluth, Ga., one of the largest suppliers of data warehousing technology to retail. "It allows people, in some cases, to make real-time decisions about what product should be at what price, in what location, at what time, and to look at the impact of that on their top-line sales or bottom-line profit."
Retailers are increasingly leveraging data warehousing systems to access daily, transaction-level data in order to manage real-time inventory levels and thereby maximize customer satisfaction, said Sullivan. He sees real-time data warehousing as the wave of the future -- not just in granular applications, but across the whole supply chain, "from pallets all the way through the point of sale," he said.
Teradata's customer list includes some of the largest and most technology-savvy retailers in the world, including Albertsons, Wal-Mart, Supervalu, Publix, Meijer, H-E-B, Shaw's, J Sainsbury and Metro AG. Minneapolis-based Supervalu is using data warehousing to enhance its role as a "middleman of information" as well as products. Bob Borlik, Supervalu's chief information officer, sees the data warehouse as Supervalu's single version of the truth. "Rather than having multiple systems and databases to reconcile, we positioned the data warehouse to be the single source of information. It gives us a good view of both the distribution and the retail sides of the house." Supervalu's data warehouse supports a range of merchandising and financial reporting applications, including daily information on shipments, point-of-sale data, direct-store-delivery data, as well as metrics on technology performance across the enterprise. The data warehouse also centralizes category management and decision making for the Cub Foods banner, which was the testing ground for the data warehouse.
Fast access to data and quick implementation are key attributes of the Kalido Dynamic Information Warehouse, from Kalido, an information integration software provider based in London. "Businesses need data, and they need it fast," said Chris Worsley, vice president of global marketing for Kalido.
Kalido's data warehousing software has been rolled out by Agrigel, a frozen food distributor based in France, and by a European food retailer Kalido declined to name. Agrigel, which retails food directly to customers using a fleet of trucks that function as mobile shops, implemented the Kalido system throughout its fleet.
"We wanted a tool that would handle data collection and integration automatically, and we wanted to have the finest level of detail possible in the performance indicators," said Yves Madec, IT director, Agrigel. Madec said prior to the implementation, it was possible for the company to analyze which parts of the business enterprise were making money, but not what was behind those indicators.
Agrigel wanted a system it could install quickly, with measurable results, said Madec, adding that the flexibility and open nature of Kalido's data warehouse solution made it appealing. The data warehouse, which sits on DB2 and Oracle systems and can run on anything from a laptop to a multiprocessor Unix machine, stores information in a granular fashion, which increases its flexibility, he said. It can also be easily integrated into different point-of-sale systems and operates across protocols or the Web. The starting price is $150,000.
Kalido maintains reference data for users separately from transaction data. The reference data include product offerings, store locations, customer demographics, suppliers, and sales patterns by time. Storing the reference data separately from the transaction data allows the data warehouse to maintain the integrity of both data sets and enables contextual analysis of transaction level data, Worsley added.
ASP Model
Sometimes, it's better to store data elsewhere and access it via an application service provider (ASP) arrangement. That is the scenario being offered by Catalina Marketing, known for its ubiquitous coupons printed out at the checkout at thousands of stores worldwide. At its headquarters in St. Petersburg, Fla., Catalina houses what it calls one of the top 10 data warehouses in the world.
Catalina has recently upgraded its Retail Direct Online (RDOL) database, a six-year-old system that collects data either through a transaction feed from retailers or through Catalina-installed PCs that operate the checkout coupon printers. The next incarnation is RDOL Interactive, which utilizes the same database but gives users access to an Executive Dashboard with enhanced data mining capabilities in a live environment, explained Trish Brynjolfsson, vice president of retail marketing, Catalina.
The dashboard offers "snapshot" or "scorecard" reports to users, moving beyond the top-requested offerings of RDOL to provide more drilling capabilities, a faster turnaround time and customizable reports, she said, adding that the system is designed as an enhanced tool for marketers.
Once Catalina finishes the current rollout of RDOL Interactive for a retail grocery client it declined to name, Pathmark, Carteret, N.J., a user of RDOL, will become the second retailer to implement the interactive version of Catalina's program, Brynjolfsson told SN. RDOL Interactive began a rollout to its first customer in February.
While it won't replace support for other internal data needs, she pointed out, RDOL Interactive is a proactive way to disseminate marketing information to the people who need it, when they need it. For companies faced with IT resource limitations, the system eliminates the request procedure previously required by RDOL.
"What I say to retailers is that you're always going to need your traditional data warehouse, but this is a specialized marketing system that is truly designed for marketing," said Brynjolfsson.
Among the kinds of analysis done by RDOL and RDOL interactive are customer segmentation, category analysis and ad analysis. Ad analysis identifies shoppers who are purchasing advertised items.
