A prospective view on how big data analytics and connected data is enabling customer experience (CX) innovation in a digital economy that is reshaping an age-old industry.

1. 1 © Hortonworks Inc. 2011–2018. All rights reserved
The Dawn of a Retail
Renaissance
Achieving Customer Experience
Excellence through Big Data
Analytics
Brent Biddulph
GM, Retail Industry Solutions
Hortonworks

2. 2 © Hortonworks Inc. 2011–2018. All rights reserved
The Digital Economy Is Reshaping the Retail Industry
….OFFLINE & ONLINE NOW IRRELEVANT
Personalization
Consumers who use a
device during their
shopping journey
convert at a 40%
higher rate
(Deloitte)
Mobilization
Digital supply
chains respond 25%
faster due to real-
time information
(BCG)
Fulfilment Omni-channel
Today 64% of in-store
purchases are
influenced by digital,
expected to be 90%
by 2020
(Deloitte)
90% of consumers say
personalization
positively effects their
purchase behavior,
drives return visits
(Data Candy)
….“Digital” is primary reason half
of companies have disappeared
since 2000 (Accenture)
88% of companies in the
Fortune 500 from 1955
are gone (S&P)…
…Only 42% of CEOs have
begun Digital business
transformations (Gartner)
THE BUSINESS IMPERATIVE…

3. 3 © Hortonworks Inc. 2011–2018. All rights reserved
The Connected Customer
• ‘Always on’ and in control
• They are Mobile and Social with more knowledge
than ever before
• Their voices are louder and farther reaching than
ever before
• They are harder to influence
• They expect frictionless commerce (payment and
delivery options)
• They are value seekers, redefining ‘loyalty’
Better informed, more interactive, and more empowered than ever

4. 4 © Hortonworks Inc. 2011–2018. All rights reserved
Customer Experience Expectations…
35%
of online consumers are willing to
share personal information to
receive coupons, discounts
“Make It Relevant to My Needs”
89%
“I am an Educated Consumer”
of consumers conduct
their own research
using search engines
• Consistent across all channels, brands
and devices
• Personalized to reflect preferences and
aspirations
• Contextualized to present location and
circumstances
• Relevant, in the moment, to her needs
and expectations
Goal: seek to leverage each experience
to connect with customers and cultivate
deep, long-term relationships
Converging on the brand, not channel nor device
Source:PRNewswireandMcKinseyMe-CommerceandtheFutureofRetailInfographic

5. 5 © Hortonworks Inc. 2011–2018. All rights reserved
Understanding Customer Journeys is Key
15 to 20%
Reduction in Cost to Serve
• Begin with understanding the journeys customers take
when they want to buy something or get something done
• Those steps leave a long and complex (multi-channel)
digital trail across interaction points
• Data are typically collected at each touchpoint and in huge
quantities
• Using big data to understand customer journeys provides
behavioral data that is both:
• Observable in operations, and
• More predictive of true customer needs and wants than
socioeconomic segmentations
Gaining better customer behavior insights can be challenging, but pays off
Source: McKinsey Research
10 to 15%
Boost in Cross-Selling
10 - 25pts.
Drop in Churn

6. 6 © Hortonworks Inc. 2011–2018. All rights reserved
Over 60% of
consumers take the
time to review a return
policy before making a
buying decision
62% of global
shoppers use
self-service kiosks,
primarily to avoid
lines and save time
39% of global
shoppers use social
networks to get
inspiration for
purchases
95% of consumers
share bad
experiences with
others
59% of global
shoppers want an
inviting ambiance
when they shop
85% of shoppers said
they’d be more likely
to shop in stores that
offered personalized
coupons and exclusive
in-store offers
96% of global
shoppers have left
a store empty
handed on at least
one occasion
Sources:
https://www.retailtouchpoints.com/topics/store-operations/study-reveals-why-96-
https://www.pwc.com/gx/en/industries/retail-consumer/total-retail.html
http://www.inreality.com/resources/stats/100-industry-stats-retail-current-future
Today, 64% of in-store purchases are influenced by digital
and is expected to be 90% by 2020.
Customer Experience Implications in Retail…
Across the Pre-Shop, Shop and Post-Shop Journey

7. 7 © Hortonworks Inc. 2011–2018. All rights reserved
...Requires New Analytic Capabilities
Customer
Insights
New Business Models
(e.g. Marketplaces,
Formats)
Distinctive Products
& Services
Onsite & Paid
Search
Optimization
Recommendation
Engines
Dynamic Pricing
Understanding
Product Usage,
Replenishment Cycles
Social Listening &
Response
Micro-Segmenting to Better
Understanding Individual Needs
Paths to Purchase
(omni-channel insights)
Multi-Channel
Interactions
(In-Store, Web, Mobile)
Personalized
Content
Flexible
Fulfillment
Personalized Offers,
at Right Time

8. 8 © Hortonworks Inc. 2011–2018. All rights reserved
Mobile
Apps,
Logs
In-Store
Apps, Bots
Wearables
Call
Center
Logs
Shelf, Bin,
& Rack
Sensors
Video
Streams
Competitive
Pricing
Social
Networks
Logistics &
Asset
Telematics
In Home
Devices Scan & Go
Technology
RFID
Streams
SINGLE VIEW
OF CUSTOMER
FRICTIONLESS
COMMERCE
UBIQUITOUS
FULFILLMENT
RELEVANT
INTERACTIONS
OPERATIONAL
EFFICIENCY
Streaming Capabilities Enable Real (Right) Time Response
New Data Sources Extend Retail Intelligence

9. 9 © Hortonworks Inc. 2011–2018. All rights reserved
Amazon Go Store, Seattle, WA
- Launched to public 2018 / 1,800 sq. ft.
- Computer Vision (100s of cameras on shelves, ceiling)
- Deep Learning (advanced pattern recognition, 100s of algo’s)
- Sensor Fusion (cameras, shelf scales)
Data Driven Experimentation…
…’Frictionless’ Commerce In Action

10. 10 © Hortonworks Inc. 2011–2018. All rights reserved
Proximity Marketing
Connected Data and…
Proximity Marketing
Boosts Engagement
“With mobile & beacon
technology, targeting consumers
who are close to the store with
personalized offers, and even
Pinterest tie-ins.”
Target, Macy’s, CVS, Carrefour
• 71% retailers able to track, understand customers’ buying patterns
• 65% felt that they were able to target customers down to the aisle level.
• 59% felt that customers were more engaged in the store.
• 53% retailers felt that they were able to create more relevant and
compelling offers in the store.
• 24% retailers saw an increase in sales.
• 24% retailers saw an increase in offer redemption.
Source: Retail Touchpoints

11. 11 © Hortonworks Inc. 2011–2018. All rights reserved
Dynamic Pricing
Dynamic Pricing
Enables Real-Time
Response
“Pricing options allow real- time
adjustments based on a variety
of factors including competition,
customer loyalty, shipping costs,
and inventory updates.
Jet.com
Connected Data and…
“Retail leaders can expect to capture significant and sustained impact—
typically, sales growth of 2 to 5 percent and increases of 5 to 10 percent in
margins, along with higher levels of customer satisfaction through
improved price perception on the most competitive items.”
Source: McKinsey
Illustrative:
Amazon executes
53 price changes in
12 weeks on Diet
Coke during key
holiday period
(avg. 4.4 times a week)
Source: camelcamelcamel.com

12. 12 © Hortonworks Inc. 2011–2018. All rights reserved
Robots scan shelves to
help restock items
faster
“The robots are 50% more
productive than their human
counterparts and can scan
shelves significantly more
accurately and 3x faster.”
Walmart
Improved In-Stocks
Connected Data and…
Automation & Intra-day Insights:
• Out-of-Stock Notifications
• Merchandising Compliance / Execution
• CPG Information Sharing / Monetization

13. 13 © Hortonworks Inc. 2011–2018. All rights reserved
Streaming video
enhances guest
experiences
Video capture helps identify
(proactively) customer
engagement opportunities,
improve customer
experiences.
Leading US Retailer
In-Store Engagement
Connected Data and…
Scenario: Engage
customers and Improve
in-store experiences.
Using Facial Analysis, a
retailer can determine
a customer’s sentiment
and pro-actively initiate
contact before a
customer decides to
leave as a result
of frustration,
improving customer
experiences in-store.
VR Enriches In-Store
Experiences
“Lowes Holoroom is a virtual
reality home improvement
design and visualization tool
that empowers homeowners
with an immersive, intuitive
experience in the room of
their dreams.”
Lowes
Scenario: Engage
customers and Improve
in-store experiences.
Using Virtual Reality, a
retailer can provide
immersive customer
engagement in-store,
assisting customer
purchase decisions,
whilst providing a
differentiated in-store
experience versus
competition.

14. 14 © Hortonworks Inc. 2011–2018. All rights reserved
Frictionless Commerce
Inventory Visibility
Informs, Guides
Purchase Paths
“Our Product Locator
displays a map of the
store, the exact aisle
location, and the current
inventory available for
items you're looking for.”
Home Depot
Digital shelves
provide interaction
at moment of truth
“Displays pricing, ads,
coupons, nutritional info.
Communicates with
smartphones, highlights
products on shopping lists,
matches dietary needs.”
Kroger
Interactive indoor
maps enable in-
store navigation
“Instead of a static map,
the application shows
your own location on the
map, as indicated by a
blinking dot – like ‘GPS for
your shopping cart’.”
Target
Connected Data and…
Video improves
self-checkout
“Analyzing video of
customers in checkout
ques, understanding
‘dwell’ times and
potential scanning delays
to proactively speed
checkout process.”
Leading US Retailer

15. 15 © Hortonworks Inc. 2011–2018. All rights reserved
InnovatorsChallengersCompetitorsOperators
---MaturityStages
Stores &
Services
Supply Chain
& Logistics
Digital
Merchandising
Foundational
Capabilities
Dynamic
Pricing
Peer Competitive Scale
Standard among peer group
Common among peer group
Strategic among peer group
Innovative among peer group
Retail Big Data Analytic Use Case Maturity Continuum
Challengers and Innovators
tend to be focused on digital
and streaming (real-time) use
case capabilities
Distinctive
Product Dev.
Enhanced
Demand
Forecasts
Customer
Driven
Assortment
Enriched
Basket
Analysis
Customer
Micro-
Segmentation
Customer
Loyalty &
Retention
Sentiment
Analysis
Supplier
Collaboration
(CPFR)
Real-Time
Personalization
Location
Based
Marketing
Recommendation
Engines
Clickstream
Analysis
Data
Monetization
Data Science
‘Labs’
Inventory
Optimization
Customer ID
Matching
EDW
Optimization
Single View
of Inventory
Single View
of Customer
Behavior
Analysis
(video)
Mobile
Customer
Engagement
Merch.
Execution
(video, bots)
Labor
Optimization
Predictive
Maintenance
Marketing
Attribution
Price & Promo
Optimization
Search
Optimization
Virtual Ordering,
Connected Home
Flexible
Fulfillment
Transportation
Optimization
Path to
Purchase
Traffic &
Conversion
Response
Store
Communications
& Response
Endless Aisle,
Marketplaces
Marketing

16. 16 © Hortonworks Inc. 2011–2018. All rights reserved
Retail Leaders are Getting Results…
Social Feedback:
responding to operational
improvement opportunities
Hyper Localized Assortment
tailoring product mix based upon
local tastes and preferences
Proximity Marketing
personalized messages, dynamic
pricing, recommendations, offers
Mobile Engagement
seamless cross channel experience:
product locator, info search / QRs,
availability, coupons, weekly ads
Improving In-Stocks at SKU level
improved replenishment forecast accuracy
with external demand signals such as weather,
local event calendars, social trends, in-store bots
Personal Touch:
empowering store associates with clienteling,
up/cross-sell suggestions and intra-day
traffic patterns, hot spots and dwell times
5%-20% increases
using big data analytics - McKinsey
10%-30% revenue uplift
using real-time analytics - Deloitte
56% engagement
using devices while shopping - Accenture
3%-6% avg. basket size
increases using big data analytics - RIS
40% conversion uplift
using real-time delivery - Deloitte
8%-12% revenue risk
avoidance
using big data - McKinsey

17. 17 © Hortonworks Inc. 2011–2018. All rights reserved
Transformation is Required
Connected Customers Are
Redefining ‘Loyalty’
Consumers increasingly expect relevant
offers, personalized interactions,
frictionless transactions and a seamless
experience across all channels.
Inadequate and Non-
Integrated Systems
Notoriously underspending on
technology, retailers face aging,
disconnected systems. Data silos
persist, limiting enterprise access,
scalability, portability, agility.
1
3
2
4
Competitive pressure from both
traditional and ‘disruptors’ drive
focus on differentiation through
brand, formats, in-store technology.
Business Model &
Format Experimentation
Retail supply chains that once
assumed that customers would travel
to stores and acquire whatever
inventory happened to be there are
now obsolete.
Fulfillment Requirements Drive
Supply Chain Complexity

18. 18 © Hortonworks Inc. 2011–2018. All rights reserved
Three Business Imperatives for Retail Organizations
1. Accelerate business analytic capabilities, competitive differentiation
• Marketing & Digital > personalization and relevance is everything
• Merchandising > shift from product to customer-driven assortment, pricing, promotions
• Store Operations > embrace automation and ‘connect’ the front line
• Fulfillment > profitable flexibility and ‘front door’ delivery capable
2. Leverage data capital to create new business models, revenue streams
• Collaboration 2.0 > strike meaningful information sharing with trading partners and mutually
beneficial business opportunities (e.g. demand forecasts, in-stocks, product development)
• Monetization > perpetuate customer engagement to enrich profiles, personalization capabilities
3. Modernize information infrastructure, simultaneously improving business processes
• Enable innovation > rapid spin-up of data labs and seamless propagation of AB tests, result sets
• Embrace open source technology > maximum platform flexibility, portability, speed to innovation

19. 19 © Hortonworks Inc. 2011–2018. All rights reserved
Let’s Keep the
Conversation Going…
bbiddulph@hortonworks.com
@brentbiddulph
+1 425.273.6851
https://www.linkedin.com/in/brentbiddulph/