Retailers steal march with rapid restocking

By ADAM GIFFORD*

When the planes hit the World Trade Centre towers on September 11, Americans rushed to show their patriotic spirit.

Giant retail chain Walmart sold 116,000 American flags that day, emptying its shelves. Its nearest rival sold a similar amount.

The next day, Walmart sold 225,000 Stars and Stripes. The second-best retailer had not restocked and sold nothing.

The difference is in the use the chains make of information. Every seven minutes Walmart's Teradata system is refreshed with scan data from the 3200 stores in the chain. Every 2 1/2 hours, that data is used to automatically make purchase orders.

The second best retailer made its first purchase order to restock flags at 6.30pm on September 12. Some chains did not start ordering flags until the following Sunday, by which time Walmart's data was saying sales were back to the September 9 level of 6500.

"Walmart identified spikes for 40 items and was able to corner the market," said Mark Hurd, chief operating officer of Teradata and president of its parent company, NCR. He was speaking at a Teradata user conference in Sydney last week.

He argues that in five years all large companies will need to have an enterprise-wide view of their data to remain competitive.

He said it was not enough for companies to analyse historical data for trends. They needed to be able to drill into the detail so they or the system could make decisions in real time - a process Teradata calls "active data warehousing".

For call centres that means operators knowing detailed information about customers within seconds of the call coming in rather than just working off standard dialogue scripts.

For airlines like Qantas, it means knowing before a plane leaves the ground whether the flight will be profitable, and using that information to schedule planes and passengers to make sure flights are profitable.

A New Zealand user of Teradata is The Warehouse. Every week its Teradata 4800 server crunches through 750 million rows of inventory and transaction data to determine what is selling and what is not.

Chief information officer James Allison said that while the New Zealand chain had not gone as far down the road to active data warehousing as Walmart, its system had helped to cut costs and increase efficiency.

"We have powerful product replenishment and merchandise planning systems so each night we analyse the predicted rate of sale and stock holding over 100,000 bar codes over 78 stores, down to colour and size derivatives of a product," he said.

The system allowed The Warehouse to sell 20 per cent more toys last Christmas while holding 15 per cent less stock.

* Adam Gifford travelled to Sydney as a guest of Teradata.