Swiss retailer Migros spots consumer trends in real time with SAP HANA

Published on 21-Mar-2013

"With SAP HANA on the IBM Systems solution, we can now process more complex and comprehensive requests within seconds, providing a range of new insights that were simply not available without in-memory processing." - Alexander Weiss, Team Leader, Processes and Business Warehouse, Migros Genossenschaftsbund

Customer:
Migros

Industry:
Retail

Deployment country:
Switzerland

Solution:
Technical Computing, Business Resiliency, Energy Efficiency, Enterprise Resource Planning, General Parallel File System (GPFS), High Availability , Transforming Business

IBM Business Partner:
SAP

Overview

Based in Spreitenbach, near Zürich, Switzerland, Globus employs approximately 3,300 people, operates more than 37 retail stores, and achieves an annual turnover of around CHF 710 million (more than €580 million). The retailer is part of the much larger Federation of Migros Cooperatives, which has some 86,000 employees and total sales of more than CHF 24 billion.

Business need:
Globus, the premier department store subsidiary of Migros Group, sells in the highly competitive consumer marketplace. Only if it can spot trends early can Globus thrive in the fickle world of fashion. These markets are very fast-moving, and consumers always compare prices and look for the best offers available. To increase sales and stay ahead of the competition, which increasingly comes from online retailers, Globus must adapt its pricing and offers quickly to changes in the market.

Solution:
The group’s central IT service unit, Migros IT Services (MITS), implemented SAP HANA on IBM Systems solutions to boost the performance of its existing SAP NetWeaver® Business Warehouse component, which manages the company’s sales data. The increased performance provides managers with real-time access to sales data for 800,000 products.

Benefits:
Globus has gained valuable insight into sales patterns for 800,000 products across various time frames, shops and regions. Database volume was reduced from some 550 GB to about 130 GB, a reduction of 75 percent. Globus can identify slow-selling products 98 percent faster. Sales promotions reports that took more than seven minutes to produce can now be generated in one minute, an increase of more than 85 percent. Standard sales article reports for top-selling ranges that formerly took four minutes and 30 seconds can be generated in just 8 seconds, an improvement of 97 percent.

Case Study

Based in Spreitenbach, near Zürich, Switzerland, Globus employs approximately 3,300 people, operates more than 37 retail stores, and achieves an annual turnover of around CHF 710 million (more than €580 million). The retailer is part of the much larger Federation of Migros Cooperatives, which has some 86,000 employees and total sales of more than CHF 24 billion.

Globus is the premier department store subsidiary of Migros Group, selling in the highly competitive consumer marketplace. Only if it can spot trends early can Globus thrive in the fickle world of fashion. These markets are very fast-moving, and consumers always compare prices and look for the best offers available.

In recent years, competition in the retail market has become much fiercer. Consumers have become more price-conscious and routinely compare different outlets to get the best deal. Online-only retailers pose an increasing threat to traditional bricks-and-clicks retailers, cutting into profit margins. Only if it can spot trends early can Globus continue to thrive when margins are so tight.

Globus relies on accurate reporting and analysis of sales performance data, which provide the insight into current and new consumer trends. The company uses this precious data to adapt its pricing and special offers in reaction to changes in the market. In particular, the sales performance data identifies slow-selling stock, which can be discounted or promoted to encourage purchases, in turn releasing valuable shelf space for more valuable ‘hot’ sellers.

Implementing SAP HANA for real-time reporting

Globus manages its business operations with the SAP for Retail solution portfolio, and core business processes are supported by integrated SAP ERP® applications. Transaction data is analyzed within SAP NetWeaver® Business Warehouse, which acts as the central source of sales and consumer trend information. The SAP applications are hosted and provided by Migros Genossenschaftsbund (MGB), the central IT services provider for the Migros Group.

As sales volumes grew and transaction data increased, the time taken to generate reports increased. Because sales and trend data is critical to Globus, the company wanted to accelerate the delivery of certain key reports, designed to gain real-time insights into retail sales figures and consumer trend information.

Business-critical reports

Alexander Weiss, Team Leader, Processes and Business Warehouse, MGB, was responsible for meeting the business need.

The Migros Group was already using SAP NetWeaver Business Warehouse for its standard information analysis; to meet the demands to improve reporting performance for the business-critical subset of reports, MGB decided to implement SAP HANA® alongside the SAP NetWeaver BW solution, in what is termed a ‘sidecar’ deployment. Alexander Weiss comments, “Having chosen SAP HANA, we looked for the best infrastructure solution. We selected the IBM Systems solution for SAP HANA because it was the most mature solution on the market. Important to MGB was the future scalability of the solution, to enable the group to deploy this kind of near-real-time information service to other business areas.

The IBM solution exclusively includes IBM General Parallel File System (GPFS™), which offers the kind of scalability capabilities we need, and was a winning decision point for MGB.”

Working with its deployment partner and systems advisor retailsolutions AG, MGB implemented two of the IBM Systems solutions for SAP HANA, based on the IBM System x®3690 X5 and 3950 X5 Workload Optimized Solutions, which include 128 GB and 256 GB of memory and IBM eXFlash with solid-state drives (SSDs).

SAP HANA running on powerful IBM eX5 Enterprise servers combines the speed and efficiency of in-memory processing, with the ability to analyze massive amounts of business data – enabling companies to eliminate barriers between real-time events and real-time business decisions.

The IBM System x3690 X5 Workload Optimized Solution for SAP HANA delivers performance, memory capacity and reliability features in a breakthrough two-processor system that incorporates Intel® Xeon® Processor E7-2870 and fifth-generation IBM X-Architecture (eX5) technology. By deploying a system with two Intel processors designed to optimize dual-socket workload performance, you can cut your licensing costs in half while using less energy for a lower total cost of operation.

The IBM System x3950 X5 Workload Optimized Solution for SAP HANA is equipped with powerful Intel Xeon Processor E7-8870 technology, with four processors offering ten cores each. These top-of-the-line processors deliver performance designed to handle data-demanding workloads with improved scalability and increased memory and I/O capacity.

As business expands, IBM provides a pay-as-you-go approach that simplifies the process of scaling up. This attractive feature preserves the initial server investment by adding capacity to the original configuration through the addition of server nodes.

The unique, highly scalable IBM General Parallel File System (GPFS™) is deployed on all IBM systems for SAP HANA, enabling high-performance SSD and disk access and the capability to implement high-availability solutions using GPFS replication and seamless cluster extension. No storage area network (SAN) is required and the database capacity can be expanded by adding nodes.

Accurate information boosts sales

With SAP HANA, Globus managers can quickly access sales data for 800,000 articles and 37 shops and base their pricing and marketing decisions on highly-accurate, real-time data.

This has significantly increased sales. In addition, managers can see sales patterns using data from various time frames, shops and regions and use this information to more accurately forecast future trends and alter sales tactics to meet predicted demand.

Alexander Weiss explains, “With SAP HANA on the IBM Systems solution, we can now process more complex and comprehensive requests within seconds, providing a range of new insights that were simply not available without in-memory processing. Real-time access to this information enables managers to react much faster to changes in the market, significantly increasing retail sales.”

“For example, we can now analyze ‘slow sellers,’ the products that are stuck in the supply chain because they are not selling well. Slow sellers take up valuable space that could be used for more valuable stock, so it is in our interest to eliminate them.

“Previously, it took 22 minutes to generate a basic slow seller report that did not include the whole product line. Access to these reports had to be planned in advance because of the processing time.

“With the new solution, we can generate comprehensive slow seller reports that include the whole product line in only 17 seconds, more than 98 percent faster. Consequently, staff access the information much more frequently and base their decisions on accurate sales data – at the same time saving up to two hours’ wait time per employee per day.”

Globus analyzes sales figures for each product to make decisions about pricing, marketing and logistics. The improved reporting speed has enabled the company to improve point of sale analytics and slow-seller management.

For example, sales promotions reports that took more than seven minutes to produce can now be generated in one minute, an increase of more than 85 percent. A standard sales article report for the top-selling ranges that formerly took four minutes and 30 seconds can now be generated in just 8 seconds, an improvement of 97 percent.

Basing business actions on accurate sales data

With the advent of SAP HANA on the IBM Systems solution, Globus now has a much better overview of its operations. “Previously if we needed sales figures of our 14 big stores, MGB had to generate 14 separate reports and then combine the results manually,” remembers Alexander Weiss. “Now we can simply create one report at the touch of a button.

“Before SAP HANA was implemented, acceptance of the company’s key performance indicator dashboard was low among managers. With the new solution, the figures are referred to and used regularly, helping the company to manage its retail business more efficiently.”

The former combination of SAP with a traditional Oracle-based DB was unable to generate reports across all 800,000 articles spanning several years. Today, MGB can create these reports easily and Globus managers can see the results within seconds. This visibility of data enables managers to base their business decisions on accurate data and identify inefficiencies.

SAP HANA removes the need for the IT team to optimize reports and create data aggregates to accelerate business reporting. The SAP HANA technology eliminates these administration tasks, and the solution integrates the key components into a single, easily managed environment, allowing IT staff to focus on value-added tasks.

With advanced data compression, the database volume was reduced from approximately 550 GB to about 130 GB, about compression factor 4. As a result, Migros has been able to postpone costly investments in data storage equipment.

After the success of the initial deployment of IBM Systems solution for SAP HANA at MGB, the management has rolled the solution out to two other companies in the group, Office World and Interio.

“MGB is very satisfied with the SAP HANA and the IBM Systems solution for SAP HANA infrastructure,” says Alexander Weiss. “The solution delivers the performance improvements we needed to optimize retail operations efficiently.”

Products and services used

IBM products and services that were used in this case study.

Hardware:
System x, System x: System x3690 X5, System x: System x3950 X5

Software:
General Parallel File System

Service:
IBM-SAP Alliance

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