Applying Moneyball to Retail Using Business Intelligence | Retailing ...

Last night Major League Baseball held its annual mid-summer classic, the All Star Game. ?I grew up a huge fan of the National League, so I loved every moment of their blowout victory.

While watching the game, I kept thinking about how the players were supposedly the ?best of the best? in their respective positions based upon the vote of baseball fans from all across the globe. ?Most fans base their votes based on statistics, looking at commonly used ?metrics? like batting average, home runs and runs batted in for both this season as well as the lifetime averages of the players.

But are the players who made this year?s All Star teams really the best?

Bill James, Billy Beane and anyone who has ever read the book or seen the movie Moneyball would likely disagree.

?We are card counters, at the blackjack table, and we are going to turn the odds on the casino.? ?- Brad Pitt (playing Billy Beane in the movie Moneyball)

So what does any of this baseball stuff have to do with the business of retail? ?The short answer is: ??A lot!?

Leading retailers are starting to use the principles found in Moneyball and are applying it to better run their businesses. ?What they are figuring out is that sometimes the most common metrics used in retail, metrics like weeks of supply, sell-through, sales, turns, etc. can be misleading, and even worse, can lead to bad business decisions on buying, planning, allocating, pricing and more.

At its core, the principles of Moneyball were all about finding really good players who were overlooked and or undervalued while at the same time avoiding bad investments in players who were overrated. ??The teams who pioneered the principles in Moneyball augmented their player evaluations with brand new metrics, ones that every other team in baseball either knew nothing about or flat out ignored.

In retail, your players are your inventory items. ?As a retailer,?it is time to start looking at your inventory using the tactics found in Moneyball? ?So what are these ?new metrics? that retailers are using to better select their respective ?All Star? teams of inventory?

More on that next week. For a teaser you can visit here.

Garrett Sinclair, Vice President, Marketing

Source: http://insight.quantisense.com/moneyball-for-retail/?utm_source=rss&utm_medium=rss&utm_campaign=moneyball-for-retail

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