WHAT WE DO / INDUSTRY SOLUTIONS
Retail & Consumer Goods
Manufacturers and Retailers operate in an intensely competitive and complex environment where profitability depends on the interaction of a variety of factors. LatentView aspires to partner with retailers and manufacturers to help them exploit their data to uncover insights related to consumer demand and purchasing behavior and ultimately drive business performance.
Some of the key questions that executives in consumer goods manufacturing and retail are grappling with today include:
Forecasting
For manufacturers, the ability to accurately forecast demand can make or break their profitability and customer service. The most sophisticated retailers today use store-level demand to driven supply chain replenishment programs. With accurate forecasts, retailers, suppliers and manufacturers can make highly effective planning, replenishment, purchasing and allocation decisions that ultimately lowers inventory levels, improves safety stock requirements, improves customer service, and increases the profitability.
LatentView’s Optimix platform’s Forecasting application provides an intuitive graphical user interface-driven, browser-based application to help manufacturers automate and take control of their organization’s end-to-end forecasting process
LatentView develops accurate forecasting models through state of the art techniques that accurately forecast demand:
Identify trend, seasonality and spiky demand using time-series methods such as smoothing and ARIMA, regression, and econometric methods
Forecast demand for new products or items with limited demand histories, and for products with intermittend demand
Incorporate event-based forecasting to account for promotion and other effects
Generate granular forecasts from aggregate values through “ratio-profiles”
Consumer Insights
Today’s speciality retailers have established loyalty programs to identify customers, or use proprietary credit cards to do so, since customers are most likely to respond to offers and promotions that are relevant to their needs and consistent with past behaviors.Today, only a few retailers are taking advantage of the huge opportunity enabled by customer data availability. Even those who do so, only undertake rudimentary analysis primarily on the basis of psycho-demographic segments or clusters based on syndicated data (e.g., the Claritas PRIZM model).
LatentView’s Alacritous platform for customer management provides an intuitive, GUI-driven, Web 2.0, SaaS application to help you acquire, manage and maximize the value of your customers
LatentView helps retailers take their sophistication to the next level, by helping them focus on actual customer behavior as a predictor of future buying behaviors, and use internal behavioral data to target offers:
Unlock the value out of terabytes of loyalty data, by enabling it to be used in precisely targeting customers with the right offers at the right time
Identify unique and homogenous segments of customer and develop advanced predictive models that forecast consumer lifetime value and propensity to respond to an offer
Identify store-level strategies based on the attributes of customers who live in surrounding catchment areas of the store
Develop sophisticated loyalty programs that maximize customer value over time
Marketing Mix Optimization
For both retailers and manufacturers, LatentView’s Marketing Mix Modeling solution helps you maximize the effectiveness and ROI of each element in your marketing mix.
Simultaneous analysis of your marketing and promotion activities along with other factors affecting sales performance
Using advanced data mining techniques and innovative modeling methods, we identify the strengths and weaknesses of your marketing programs and address your key issues with pricing, promotion, advertising and other factors
Examine external influences such as competitive actions, seasonality and economic conditions to understand how these other factors impact your sales performance
Better plan future advertising, promotion, pricing, and other marketing activities for improved sales performance and to reallocate marketing resources for increased marketing ROI
Regular & Markdown Price Optimization
For retailers, price-planning and implementation has never been more complex. Yet getting pricing right, whether regular pricing, promotional pricing, or markdowns, can drive several percentage points of additional margin.
Regular Price optimization. Regular pricing is a key step in both price planning and category planning processes for retailers. In category planning, pricing helps achieve category objectives, once the assortment mix for the current season has been planned. LatentView’s comprehensive pricing optimization solutions helps you:
Develop predictive models that identify own and cross-item price elasticities, cannibalization, halo effects, cross-category pull through effects, trends, seasonality, and a host of other drivers
Develop pricing rules, create what-if scenarios to assess the impact of these rules, and deliver optimized pricing to meet their goals
Make recommendations to the category manager that takes into account the category goals, the impact of competitive moves, forecasts andcurrent trends
Take into account the organizational goal, competition, and category goals, especially in respect to chain or zone level pricing, before arriving at the optimal price
Markdown optimization. The timing and depth of markdowns are important levers for managing the optimal balance of profitability and returns. To help you manage these levers, LatentView’s markdown optimization solutions makes recommendations for markdowns within the constraints of your particular business requirements:
Develop multiple markdown scenarios, test possible scenarios, forecast demand in each scenario, and select the optimal scenario
Bring inventory to the desired level, not only during the full-price selling period, but also during price-break sales
Maximize total gross margin dollars over the entire product lifecycle
Promotions Planning & Optimization
Promotions planning is a growing component of marketing spends for both manufacturers and retailers. Consequently, even a minor increase in the effectiveness of promotion spends, leads to large bottomline as well as topline improvements.
LatentView’s promotion analytics solutions enable retailers create more effective and profitable promotion plans through:
Advanced predictive models that leverage past promotion data and sales, such as regression models, discrete choice models, etc.
Determine the best discounted price for any item or promoted item group; the best type of temporary price reduction, such as buy one get one, percent off, and multiples; and the best use of merchandising support, such as ads and displays, to maximize the incremental lift and total store impact of every promotion
SKU-level modeling and optimization that captures the price elasticity of each item, in addition to cannibalization, halo effects, cross-category pull through effects, trends, seasonality, and a host of other drivers
An intuitive graphical user interface-driven, browser-based application based on our existing pricing & promotion optimization platform for effective managerial decision making
Commodity Hedging and Pricing.
In recent years high level of volatility has been witnessed in the prices of commodities. The market crisis of 2009 has resulted in large fluctuations in prices. This has forced commodity companies to enter into trading contracts of higher risk nature. Hedging their portfolio to cover for these risk only yields increased levels of risk as the hedge instruments themselves are very volatile. An optimal hedging strategy that minimized the portfolio risk while increasing its returns is the need of the hour for manufacturers.
LatentView helps manufacturers manage their commodity prices effective throught its:
Quantify exposure of the inventory to various underlying commodity indices (e.g. crude, wheat, or other inputs to manufacturing)
Forecast the price movements of these indices using time-series techniques like ARIMA coupled with event and market indicators
Using existing measures like VaR or any appropriate risk measure, accurately evaluate the risk position of the inventory
Forecast the price movements of the hedge instruments that are typically used to hedge the portfolio risk. (e.g. crude futures)
Using optimization techniques, select the best hedge instruments that maximizes the portfolio returns while at the same time minimizes the net risk
LatentView’s m3Risk platform is an intuitive Gui-driven application that automatically performs the above tasks, and has the ability to be easily integrated into the existing risk platforms at your organization
Assortment & Space
The right mix of assortment determine the variety and presentation of merchandise, which defines the customer’s instore experience. It is one of the most important aspects of a retailer’s brand image. This makes business sense as well, driving retailers same store sales growth, gross margin, and inventory productivity.
LatentView’s assortment optimization solution helps retailers provide the right mix of assortment tuned to meet the localized demand:
Develop advanced quantitative models to forecast the contribution of each SKU on category, pull through and cannibalization
Optimize by trading off costs due to loss of SKU with benefits from new SKU's, with constraints of space, replenishment, packing and availability
Consider consumer segment purchase behavior, competitive intelligence, space considerations such as minimum square footage, whether mandatory assortment or not, and metrics such as expected Gross Margins to optimize the right assortment and space allocation
