Right Here, Right Now
More sophisticated analysis helps NEXCOM reduce stock outs
The U.S. Navy bills itself as “a global force for good.” The same could be said of the Navy Exchange (NEX), a chain of 305 stores in 100 locations worldwide.
Access to NEX is considered a valuable benefit to Navy personnel and their families, with goods often costing 20% less than in non-military stores. Profits are fed back into military programs; in the fiscal year ending January 31, 2010, Navy Exchange had $2.5 billion in sales, with $51 million poured back into its Morale, Welfare and Recreation (MWR) fund. NEX is part of the larger Navy Exchange Service Command (NEXCOM), which includes six businesses ranging from lodging programs to uniform supply and textile research.
“Our mission — to provide quality goods and services at a savings and to support Navy quality of life programs — represents an important non-cash benefit to both active duty and retired military families,” says Tess Paquette, NEXCOM senior vice president and chief merchandising officer.
In spite of — or perhaps because of — its feel-good mission, Navy Exchange operates as aggressively as any other business. It recently tapped QuantiSense, an Atlanta-based provider of retail business intelligence, to roll out its packaged analytics application.
Of particular interest, Paquette says, was reducing stock outs, especially of military uniforms. “Of course, we feel it is important to be able to provide our customers with the products they need at all times,” she says. “However, there are certain categories, such as uniforms, that have a higher priority. We are committed to delivering the value benefit to our sailors and their families every day.”
The right stuff
It’s that very commitment that created the need for robust business intelligence. A significant number of NEX stores are in the United States, primarily in coastal areas. But there are NEX stores in Africa, the Middle East, Europe and Asia. Some are on permanent bases; others are more temporary in nature. NEX stores may take the form of mass merchandisers, department stores and convenience stores — sometimes all three under one roof.
“A national retailer will have a diverse set of climates and personalities to deal with,” says QuantiSense CEO Jeff Buck. “You multiply that when you bring in the different countries and the formats of the stores that they need to be in. It’s not just a mall store or a department store. It’s all of these formats, and some of them relocate frequently.
“It’s not just a logistics problem,” Buck continues. “It’s also a merchandising problem because of the diversity they deal with — getting the right product to the right place, at the right time and at the right price. That may vary greatly for any retailer, but it’s a challenge for any retailer that wants to build some amount of scale on repeatable processes.”
QuantiSense, Buck says, is built for just such variable circumstances. “What we’re able to do, because of the flexibility of our application in responding to operations, is give people an ability to drill down and always explore the idiosyncrasies of customer demand. The essence of business intelligence is for the user to interact with the data to understand the buyer.”
But not just any data will do. “We realized early on if used strategically, our data can guide decision-making and boost performance,” Paquette says.
QuantiSense’s application offers role-based dashboards for buyers, allocators, planners, store management and executives. It also includes a series of “playbooks” with specific actions like identifying products that are hot, or those that should be marked down and moved out. The reporting can also offer details on stock outs, allowing a retailer to accelerate a replacement order or move inventory to a location where it’s needed.
“There are multiple challenges involved in providing retail services to a global community,” Paquette says. “It is necessary to ensure our servicemen and women, along with their families, are able to find familiar household products no matter where they live. The lead times involved with getting product assortments to our overseas locations can be a challenge all in itself. We need to be able to predict those demands and react quickly to ensure products arrive in time.”
Ease of use is critical
Business intelligence is only as good as its ability to be applied, so QuantiSense has keyed on what Buck terms an “elegance of the application.” The company “is focused on the ease of use of our application,” he says. “We couple that with our functionality around playbooks. … It is a way to bring the data and information together in a way that allows you make a specific decision or take an action.”
Buck compares it to the apps available on iPhones and iPads, and foresees a “revolution in productivity through some of the mobile devices getting a lot of attention. Roles and responsibilities are fairly well-segmented and understood, but almost every action that they take is affected by other members of the merchandising group.
“An allocator can only deliver product if he’s got product available,” he says. “It’s the buyer’s responsibility to buy the product. Buyers can’t buy the product unless they have the money. That’s the job of the planner, who decides what money goes to a buy. These people need to work together very well.”
Business intelligence is critical to “be able to place critical information right into the hands of associates in marketing, merchandising and store operations,” Paquette says. “We plan to leverage the new analytics, comparing current business events with historical patterns to predict potential problems and quickly take the appropriate corrective actions to optimize outcomes across the enterprise.”