Should retailers add Cloud Analytics to the holiday shopping list?
Sainsbury’s, the second largest chain of supermarkets in the United Kingdom, reported on November 3 that, “Profits are significantly higher than pre-Covid levels and we are generating strong cash flow.”
Two weeks later, Sainsbury’s participated in a panel discussion with technology partners Alteryx and Snowflake. Coincidence?
For a segment notorious for the slimmest margins amid inflation and price sensitive consumers, it’s worth speculating.
Consider Sainsbury’s Aldi price match program. In all geographies, the challenges faced by household budgets cannot be ignored, a conundrum described in a February WSJ podcast thusly: “If a customer feels ripped off, they are not going to come back to that store.”
At the same time, you can’t give away the store to retain customers, so precision of the kind described by Sainsbury’s Chief Executive Simon Roberts is needed to achieve results like improving overall basket performance by 400 basis points versus Aldi.
Decisions that inform price matching happened to be an example highlighted by Sainsbury’s Commercial Analytics leader Jos van der Boom in the Alteryx and Snowflake panel.
In the discussion, Van ber Boom described his team of 30 direct and dotted line reports as one of eight analytics “spokes” aligned to functions such as marketing and supply chain, that branch out from a centralized “hub” managed by the company’s technology division.
Van der Boom explained how the combination of Alteryx and Snowflake enable the pacing required of dynamic pricing and oversight demanded by executives.
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Thanks to Snowflake’s role as a cloud data platform across the company and his position as the leader of an analytic “spoke,” van der Boom provisioned private space in the cloud for the data and processing power reflecting Commercial Analytics requirements.
Alteryx then simplifies the development of analytics – descriptive through predictive – using combinations of enterprise data and external sources – such as competitive pricing from third parties.
Based on results from the annual “Retail and Consumer Goods Analytics Study,” Sainsbury’s hub and spoke analytics organizational model is not the norm (just 5 percent).
Meanwhile, according to IDC, “Retail is cloud first, though presently only about 20% of retailers have reached the highest level of cloud maturity achieving all the benefits of cloud.”
Looking ahead to 2023, it will be interesting to see what retailers accelerate both their cloud and analytics maturities like Sainsbury’s.
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