Imagine this scenario: Just in time for the holidays, your company has advertised special savings on the “hot” product of the year. But when customers rush to your retail stores and Web site, they are disappointed to find out that the item is out of stock.

Retailers counting on holiday sales simply cannot afford to disappoint customers—and lose out to competitors—because of stocking errors or underestimating product demand. Such missteps are especially vital to avoid this holiday season as consumers are tightening their spending during tough economic times. Smart retailers know that improving customer loyalty is key to driving retail business, outselling the competition, boosting sales and increasing market share.

“This holiday season, retailers will be under tighter pressure than ever to gain sustainable competitive advantage. In today’s fluctuating economy and fast-moving retail environment, they must be able to react instantly to business needs and anticipate business problems in advance, before they become major issues,” says Giuliano Di Vitantonio, chief marketing officer, Business Intelligence Solutions, HP.

Timely access to the right information can help retailers differentiate themselves by offering more value, service and convenience to an increasingly sophisticated customer base. Now more than ever, you need to understand your customers and glean the competitive nuggets from the ever-increasing volumes of retail data, including the:

• Value of your merchandise assortment
• Customer shopping experience
• Potential spending lost to your competition
• Success of promotions and marketing campaigns

Retailers have been delivering limited real-time BI to departments and people who, for the most part, have the least impact on driving sales or who are least able to effect change in real-time or even near real-time. To optimize business operations, you must be able to gather and analyze data and deliver timely, up-to-date information on a daily basis or more frequently to the retail store associates closest to customers.

Operational business intelligence (BI) places critical information right into the hands of retail employees in marketing, merchandising, store operations and e-centers. Using analytics, operational BI compares current business events with historical patterns so you can detect problems and quickly take appropriate corrective actions to optimize business outcomes across the enterprise. For instance, by checking previous sales for “Black Friday,” the shopping day after Thanksgiving and traditionally the biggest shopping day of the year in the United States, you can better estimate inventory requirements at different store locations.

“Operational business intelligence helps retail operations capitalize on real-time information for improved decision making, predict out of stock, better forecast buying patterns and improve inventory levels to adapt retail strategies to rapidly changing customer demands and market conditions,” says Ravi Sharma, WW director, Retail Business Intelligence Solutions, HP.

In the retail industry, operational business intelligence is essential to create the right mix of merchandise, pricing and promotions that continually appeal to customers. Retailers can process critical data fast enough to deliver actionable information to merchants, suppliers, warehouses and stores. Using this single, consolidated, enterprise-wide view of customer data, you can:

• Reduce out-of-stock situations
• Eliminate excess inventory
• Improve the effectiveness of promotion and pricing strategies
• Build lifetime customer intimacy and loyalty
• Help decrease costs by improving staff productivity, reducing fraud and supporting fact-based vendor scorecards

Operational BI fosters collaboration between you and consumer packaged goods companies by providing real-time data on consumer demand, inventory movement, promotions and customer loyalty to support a demand-driven supply network. For instance, by obtaining real-time transaction data from retailers—directly from the point of sale or point of contact systems, consumer packaged goods companies can help retailers avoid out-of-stock situations and at the same time improve their own revenue stream.

In any case, an effective operational BI system must have the right foundation to support a large number of concurrent operational users for real-time decision-making. The system needs to handle frequent or continual data feeds into an enterprise data warehouse as customer and SKU transactions are processed, while providing continuous 24x7 availability. It must also be a cost-effective solution that can deliver a mixed workload capability with consistent response—plus scalability to handle increased data volumes and a growing user community.

“That’s where the HP Neoview enterprise platform comes in,” says Greg Battas, chief technology officer, Business Intelligence Solutions, HP. “With its flexible, scalable infrastructure, the HP Neoview platform helps retailers use detailed customer transaction data in a timely, effective way to build a competitive advantage.” Optimized for operational BI, HP Neoview incorporates proven HP NonStop system software for high availability and fault-tolerance. HP Neoview can consolidate multiple data marts into a strategic corporate data warehouse and can also be used to extend the current enterprise data warehouse with a powerful data mart for complex BI projects. In a precarious business climate, retailers must respond in a flash to changing market and customer demands. Operational BI offers the valuable insights derived from vast data stores to support retail growth, better in-stock levels, increased revenue and increased customer loyalty—which is particularly important this holiday season.

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