Retek Announces Predictive Enterprise Solution
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Retek Information Systems, Inc., a subsidiary of HNC Software, has announced the Retek Predictive Enterprise Solution, which expands the traditional view of a retail enterprise information system by providing predictive solutions that drive revenue enhancement benefits while streamlining operations and controlling costs.
"The retail industry is ripe for the application of predictive technologies," says John Buchanan, president and CEO of Retek. "Retailers create terabytes of data during the retail transaction process -- point-of-sale transactions, inventories, supply inputs, plans and forecasts, distribution requirements -- but have very few tools to understand relationships amongst the data. Retailers spend too much time mining their data for nuggets of knowledge about their customers and their business, and too little time making the right decisions once they have that information. Retek's Predictive Solutions transform that raw data and, based on the business opportunities involved, predict possible outcomes of different actions that could be taken. Decisions are improved because retailers understand much better the business issues, their customers, and the financial drivers involved."
Retek's Predictive Enterprise Solution provides retailers with the opportunity to apply these Predictive Solutions into the data generated by the integrated enterprise applications Retek offers as part of its enterprise strategy. Other enterprise solutions go only as far as integrating enterprise applications; Retek focuses on providing value at each point in the supply chain via cost controls as well as the top and bottom line benefits that Retek's Predictive Solutions provide.
Using the Retek Merchandising System as the enterprise engine, the Retek Predictive Enterprise Solution provides operational management for retailers as they plan, buy, move, sell and pay for product. To provide management across the supply chain, Retek has built alliances with planning vendors, acquired import management functionality with the IMPORT2000 product and forged alliances with major financial software vendors. In addition, Retek has acquired PCS Technologies, whose Nautilus product is an industry leader for distribution center management.
"Our Predictive approach to the enterprise is a clear differentiator, "says David Tidmarsh, Retek's VP of Strategy and Business Development and former CIO of Wilsons The Leather Experts. "Retek's products are proven in the marketplace today. While other vendors are trying to prove that their client/server merchandising systems can work at large retailers, Retek is taking the retail industry to the next steps of enterprise management. Predictive Solutions are designed to drive benefits not only out of how retailers manage and control their inventory and operations, but also in how retailers can leverage their relationships with their customers. Today, our parent company HNC brings predictive technologies to the retail banking industry for kiosk- and Internet-based loan approvals, credit card fraud detection and customer-by-customer profitability measures. Retailers need to focus more and more on their customers. Retek's Predictive Solutions fulfill that need."
Why Predictive Solutions?
Throughout the supply chain, retailers have opportunities to improve their decision-making, which creates value in their business by focusing on enhancing revenues as well as merely controlling merchandising operations and costs. To do this, retailers need tools that allow them to predict outcomes of situations that arise at each step in the supply chain - tools that capture and analyze key information at each point in the process.
Retek has aligned its vision, strategy and mission squarely around taking retailers beyond the "operational enterprise" to this " predictive enterprise" that creates value for retailers via their use of predictive technology. Predictive technologies are applied neural network and clustering techniques leveraged into real-world situations that require the analysis of large amounts of disparate data. Retek's parent company, HNC Software, has patented these predictive technologies from work completed for the US Defense Industry and has commercialized them in the insurance, financial and Internet industries. Retek is bringing these predictive technologies to retail.
Retek's Predictive Solutions are tools that assimilate the data generated by the retailer's operation across the enterprise, along with other data sources such as point-of-sale, customer loyalty cards, credit cards, mail order information and even outside third-party demographics. Based on industry best practices and a retailer's own business requirements, these tools facilitate decision-making at each step in the chain to drive out business performance improvements. Retek Demand Forecasting (RDF), Retek Replenishment Optimization and Falcon Retail are three of these predictive products in use at retailers around the world today. Retek's Customer Understanding / Targeting module is also available.
Retek's Predictive Solution Applications
Retek Demand Forecasting (RDF) provides forecasts to retailers' supply chain planning, allocation and replenishment functions. It is based on statistical and predictive causal techniques with automatic forecasting capabilities that are coupled with multi-dimensional on-line "what if" analysis. The time series causal forecast module is intended to improve the accuracy and efficacy of forecasts by predicting the effects of user-defined events such as promotions, special holidays and special events while providing insight into the causal factors driving retail demand.
Linda Lambert, Director of Systems at Computer City, a division of US-based Tandy, relates how using RDF has resulted in substantial benefits. "We implemented and integrated Retek as part of our inventory management system in 120 days. This resulted in lowering our weeks of supply from eleven to six, and boosted our in-stock position from 73% to 96% in high-ticket, high-margin items."
Other retailers and manufacturers using or implementing RDF to leverage forecasts for supply chain planning, allocation and replenishment functions include Starbucks, Future Shop, UK's Storehouse, Hills Stores, Brooks Brothers, France's FNAC, Lancome, Bali and Playtex.
Retek's Replenishment Optimization allows retailers to model replenishment parameters and choose those that provide the best ROI. For example, a US-based auto parts retailer that implemented Replenishment Optimization realized an $11 million savings at start-up and estimates ongoing benefits at $40 million annually. Other retailers worldwide are in the process of implementing Replenishment Optimization and look to see similar benefits.
Falcon Retail, based on HNC's bank card fraud detection product Falcon, is in use by retailers such as Sears. Falcon Retail provides proactive detection of private label card application and transaction fraud, which translates into multi-million dollar benefits from fraud loss prevention and fraud detection operational efficiencies. Falcon is in use at more than 100 banks worldwide, monitoring more than 220 million accounts.
Retek's Customer Targeting / Personalization module is in use today with Internet site providers and retailers, maximizing online ad clickthrough rates, selectively targeting online audiences and personalizing online shopping based on observed user behavior. Aptex Software, Retek's sister company under the HNC Software family, has been at the forefront of this market, providing up to 100% increase in ad response rates.
Other planned Predictive Solutions include Market Basket Analysis, Range Optimization, Promotion Effectiveness, In Season Trend Analysis, Markdown Modeling & Management, and In Season Optimization/Localization.
The Retek Product Suite is client/server-based, using Oracle tools and database, and supports full NetPC/Web/Java functionality. For more information, see http://www.retek.com