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Once again, retails biggest players descend on the Javits Center in New York City for Retail’s Big Show. Hosted by the National Retail Federation, over 34,000 retail professionals from around the world come to learn about the latest retail trends and technology and gain inspiration for the year ahead.

Lori Mitchell-Keller, global general manager of consumer industries at SAP, kicked off the Sunday afternoon keynote titled: From Big Data to Micro-Insights: Learning From Hershey’s Knowledge Journey.

Mitchell-Keller started off by saying retail is all about people – and we’re all in it together. “It’s in our DNA to think about how consumers and shoppers go about their business, and retailers have an opportunity to touch people in a memorable way,” said Mitchell-Keller. That opportunity is fueled by an enormous amount of data that is growing exponentially.

Consumers are connected and active 24x7. They share valuable data on the Internet and social networks and an explosion of wearable and Internet-connected devices is helping retailers understand consumers even better. Mitchell-Keller said hyper-connectivity and the science of Big Data are going to transform how retail is viewed and how business will happen over the next few years.

To excel in the digital economy, retailers need to overcome both organizational and technological challenges. Digital strategy and leadership need to be aligned throughout the entire company and focused on the customer. Additionally, technology needs to be an enabler of change.

“If you want to be a digital enterprise you need a digital core,” said Mitchell-Keller.  End-to-end digitization across the enterprise eliminates silos, improves workforce engagement, enables real-time collaboration with business partners, increases customer engagement, and turns data into new revenue streams.

Mitchell-Keller then invited to the stage, Michele Buck, president of North American operations at the Hershey Company. Buck described Hershey’s long-standing relationship with data and analytics. She said Hershey has one simple mission: to bring goodness to the world through great tasting snacks. To do that, Hershey listens closely to consumers to better understand their needs and motivations as they evolve.

That Hershey’s sells 80-plus brands around the world is one of its most sustainable competitive advantages. It established a strong brand presence by getting to know its customers and market better than its competition. “Several years ago, we determined that in order to thrive and win in the marketplace we would have to have a strong focus on insight and knowledge,” said Buck.

Hershey didn’t just focus on the confectionary market – it took a broad approach and gathered data about the entire snack market. It gathered shopping behavior in all types of stores, analyzed purchasing patterns across large and small formats, and implemented technology that enabled insight down to the zip-code level so it could better meet the needs of consumers. “Our knowledge journey was huge,” said Buck.

The knowledge Hershey gained paid dividends. It showed that consumer shopping behavior and people’s relationship with food is changing. People care more about what they are eating and are buying via many more channels. “60% of meals are now consumed as snacks,” said Buck. To address that change, Hershey’s is expanding its brands and giving consumers more healthy choices. It’s also simplifying its ingredients and adding smart labels to products so consumers can easily find additional nutritional and sustainable sourcing information.

Hershey is expanding its capability to consume, combine, and analyze vast amounts of internal and external data. It has built a knowledge and insights team within the organization and partners with data and analytics companies in Silicon Valley. The added insight it’s gaining has helped Hershey reinvent the in-store confectionary shopping experience and test new product offerings.

“The store-within-a-store concept has lifted confectionary category sales by double digits,” said Buck. Hershey worked closely with retail partners to create and implement many other creative ideas that are increasing in-store sales and engagement. It created a sticker dispenser that allows people to personalize giant Kisses with affectionate messages. It built a “smile machine” that dispenses free candy samples if you smile at it. And it developed a 3D chocolate printer that enables people to make their own custom chocolate shapes.

Doug Freud, assistant vice president of data science and strategy at SAP, joined Buck and Mitchell-Keller on stage for a discussion on analytics. Freud works with retailers on how to apply advanced analytics to acquire and retain customers.

Freud said retailers can tap into predictive analytics to help improve things like supply chain efficiency and demand forecasting at a granular level. He also said the biggest consumer of analytics within a company should be operational systems, not humans. Retailers can’t simply hire a data scientist and expect to get the answers they need. “Your operational systems should be using predictive models combined with business rules to make much better decisions,” said Freud.

The retailers that successfully embed predictive analytics into their operational systems will see giant ROI. This approach isn’t easy, however. It requires process change, data management change, and organizational change, said Freud. Buck noted that predictive analytics is very important to Hershey and they are building a multifaceted, multidiscipline team around it to ensure future success.

Visit the SAP NRF Resource Center to access keynotes, theater presentations, and videos from NRF 2016.

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