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                                               SAS® Demand Forecasting for Retail
                                               Outperform the competition and improve business results with SAS’
                                               next-generation demand forecasting platform

                                               To thrive in the 21st century, retail
                                                                                            Key benefits
What does SAS® Demand                          organizations must strive to satisfy the
Forecasting for Retail do?                     unique demands of every customer.            •	 Highly Accurate Forecasts – SAS
SAS Demand Forecasting for Retail uses         Gone are the good old days of the               provides the most robust library of
SAS software’s unique high-performance                                                         models in the retail software industry
                                               mass market, when a single assort-
forecasting engine to automatically
                                               ment, standard pricing and a single             that generate forecasts based on
diagnose, model, execute and reconcile
forecasts across multiple merchandise          “average location” forecast would               underlying trend, seasonality promo-
levels and locations. It allows creation of    satisfy consumer demand in all stores.          tions, inventory effects and other
forecast projects and manages forecasts        Today, with so many factors affecting           known causal factors. Proprietary
with a built-in repository and versioning      consumer behavior, predicting demand            “best pick” functionality automates
system. SAS Demand Forecasting for
                                               for a single item in a single store can be      model selection.
Retail produces results at any level of the
product and location hierarchies, down to      a difficult proposition. Forecasting de-     •	 Drives Business Results – By seam-
the SKU/store level.                           mand for all stock-keeping units (SKUs)         lessly integrating with existing planning
                                               across all stores and all geographies is        processes, SAS Demand Forecasting
Why is SAS® Demand Forecasting
for Retail important?                          a greater challenge by far.                     for Retail helps identify opportunities
Accurate, consistent forecasts are a key in-                                                   and improve profitability.
put to financial planning, assortment plan-    This increased complexity must be
                                                                                            •	 Softlines Ready – Includes models
ning, allocation, replenishment and store      addressed in an ever-more demanding
                                                                                               for fashion forecasting, short lifecycle
labor planning processes. With a common        business environment. Dynamics such
demand forecasting platform, SAS delivers                                                      products and intermittent demand;
                                               as globalization, increasing customer
consistent, accurate and detailed aggregate                                                    leverages SAS Merchandise
                                               expectations, high-efficiency supply
forecasts. Improved forecast accuracy                                                          Assortment Planning for end-to-end
and consistency empower better decision        chain models and diversification of
                                                                                               fashion forecasting workflow.
making, allocation and replenishment, and      sales channels have made the retail
reduce stock-outs and manual intervention                                                   •	 Highly Scalable – Supports the
                                               industry intensely competitive.
in the supply chain – the results of which                                                     entire organization down to the indi-
drive both top- and bottom-line growth.                                                        vidual store SKU level, for all types
                                               This competition, in conjunction with
                                                                                               of retailers. By exploiting a parallel
For whom is SAS® Demand                        economic conditions, has increased
Forecasting for Retail designed?                                                               execution design with a high degree
                                               pressure on profit margins, forcing re-
Demand forecasts are leveraged in                                                              of automation, SAS delivers reliable
                                               tailers to focus on better understanding
preseason and in-season planning activities                                                    performance in the most demanding
                                               the demand for merchandise through-
by merchandise buying, planning and                                                            environments.
                                               out its retail life cycle. The result is a
allocation teams, as well as dedicated
                                               need for better forecasting and more         •	 Grid Ready – Operability with
forecast analysts and promotion managers.
Of course, understanding of consumer           reliable methods for managing demand.           SAS Grid Computing and SAS Grid
demand is critical to processes enter-         Ultimately, the goal is better planning –       Manager ensures that you can easily
prisewide, from financial planning through     for fewer stock-outs, improved margins          leverage grid technology to add more
the supply chain. SAS forecasts supply the     and more solid overall business results.        computing horsepower and reduce
business accuracy that enables nearly
                                                                                               hardware cost.
every decision maker in your organization to
drive competitive advantage.                   Effective forecasting in this environ-       •	 Reduced Workload – Automated
                                               ment requires sophisticated capabili-           exception-based forecast manage-
                                               ties delivered via a highly automated           ment reduces the need for manual
                                               solution.                                       inputs and forecast updates.
                                                                                          SAS has the most robust library of
The Bottom Line: Reducing                     Product Details
                                                                                          forecasting models for a wide range of
Forecast Errors Saves Money                   Agile Retail Technology                     retail business situations. This library
Forecast errors can result in significant     Statistically sound demand forecasts        includes intermittent demand models,
costs to retailers. Potential sales losses    serve as the foundation for all levels of   unobserved components models,
can range from 20 to 25 percent, as a         your business, from merchandise plan-       ARIMAX models, dynamic regression,
result of stores selling out of a product     ning to replenishment. SAS Demand           exponential smoothing models with
or not stocking enough of a popular           Forecasting for Retail provides the         optimized parameters, and user-de-
brand, color or style. But with accurate      foresight your organization needs to        fined custom models. For the forecast
forecasts, you can reap every sales op-       survive in an increasingly consumer-        analyst, SAS provides a quick and easy
portunity without wasting inventory or        driven economy. Forecasts can be            way to manage forecasting through the
other resources – which translates into       generated for any dimension of your         new SAS Forecast Studio graphical
great competitive advantage, especially       business (SKU, store, region, etc.),        user interface.
in challenging times.                         appropriate for the user and need; the
                                              SAS forecasting solution adapts to          Adaptable Forecasting Execution Workflow
The costs of poor forecasting include:
                                              your business. When deployed with           Our demand forecasting solution
Over-forecasting:                             SAS Integrated Merchandise Planning         offers a detailed and flexible forecast-
•	 Excess	inventory	and	obsolescence          and SAS Merchandise Assortment              ing workflow. It offers the capability of
•	 Higher	inventory	holding	costs             Planning, it enables planners to build      defining the analyst control points and
•	 Reduced	inventory	turns                    merchandise, financial and assortment       parameterization for this best-practice
                                              plans that better anticipate consumer       workflow, supporting all forecast
•	 Unexpected	transshipment	costs
                                              demand. Additionally, when coupled          execution scenarios and configura-
•	 Lower	margins                              with SAS Merchandise Assortment             tions. This is critical for analysts who
                                              Planning, the powerful forecast man-        need to adapt forecasts to individual
                                              agement functionality lets retailers        products within the model and across
•	 Costs	for	order	expediting
                                              reconcile demand in a centralized           the forecast horizon. This solution
•	 Higher	product	costs                       platform.                                   also leverages the workflow from SAS
•	 Lost	sales	from	out-of-stocks                                                          Merchandise Assortment Planning for
                                              Built on High-Performance                   preseason forecasting of new fashion
•	 Lost	companion	product	sales
                                              Forecasting Analytics
                                                                                          or short lifecycle items.
•	 Customer	satisfaction	issues
                                              Built on the SAS Forecast Server, SAS
A truly comprehensive forecasting solu-       Demand Forecasting for Retail auto-         SAS Demand Forecasting for Retail
tion provides an accurate picture of key      matically chooses the best model and        follows an integrated approach to IT,
demand signals to all levels of the retail    optimizes its parameters to produce the     working with SAS Merchandise Plan-
organization. An integrated workflow          forecasts. The solution can generate a      ning or an external replenishment sys-
is required to provide a viable demand        starting-point forecast as a means of       tem to automate the forecast execution
forecast without embroiling users in          seeding financial plans, as well as help    process. This process, which includes
detailed statistical forecasting. In short,   with in-season re-forecasting so that       data preparation, diagnosis, model se-
SAS Demand Forecasting for Retail             retailers can better react to sales. SAS    lection, fit/forecast, automated evalua-
delivers on all of these challenges.          Forecast Server reduces the overall         tion and reconciliation, can be executed
                                              workload by rapidly generating multiple     for each distinct level of merchandise
What if you could develop accurate,           statistically based forecasts without the   and location as well as for each distinct
preseason plans based on expected             need for human intervention, but also       KPI. Analysts can choose to skip one or
customer demand and other statisti-           provides the capability to override gen-    more of the steps in this process either
cally generated demand insights, using        erated forecasts in special instances.      while working on a forecast or during
large-scale, automated forecasting                                                        the batch execution. Users can also
that reduces errors, increases effi-                                                      define unique performance metrics to
ciency and improves your bottom line?                                                     suit specific business needs.
With SAS Demand Forecasting for
Retail, these capabilities are possible
in a common platform.
Designed to Meet Large-Scale
Forecasting Needs                             Key Features
                                              SAS® Demand Forecasting for Retail
The focus is on speed, without sacrific-
                                              •	 A	stand-alone	solution	for	any	retail	forecasting	need,	such	as	replenishment,	store	labor	
ing accuracy. The solution automatically
                                                 scheduling	and	supply	chain	operations.
adjusts forecasts to changing demand          •	 Native	integration	with	SAS	Integrated	Merchandise	Planning	solution	provides	financial,		
and quantity patterns – easily managing          assortment	and	allocation	planners:
seasonality, including difficult-to-predict      •	 Direct	access	and	management	of	demand	forecast	versions.
demand for slow-moving goods. To do              •	 Use	of	dynamic	time	set	for	automatic	adjustment	of	the	forecast	time	frame	based	on		
this, SAS Demand Forecasting for Re-                 a	number	of	periods	after	current	time	period.
tail provides a pre-defined framework            •	 Easy	use	of	merchandise	and	location	filters,	clusters	and	time	events.
for demand forecasting data models               •	 Access	to	forecast	accuracy	reports	and	metrics.
that ideally suit the retail industry. This   •	 Segmentation	of	SKUs,	based	on	sales	patterns	and	other	variables,	to	identify	individual		
framework stores data for points of              SKUs	that	can	be	addressed	one	at	a	time	where	similar	forecasting	strategies	are	applicable.
                                              •	 Pre-forecasting	analysis	to	determine	the	seasonality	of	SKUs	and	relevant	historical	data.
sale, events, promotions, price, weather
                                              •	 Statistical	forecast	generation	at	any	level	in	the	merchandise	(SKU,	subcategory,	category,	
and other effect parameters that can
                                                 etc.),	time	(day,	week,	month,	quarter	and	season)	and	location	(retail	outlet,	postal	code,	city,	
have an impact on demand. Combined
                                                 state	region,	country)	hierarchies.
with the solution’s industry-leading          •	 Demand	forecasts	that	incorporate	the	base	forecast,	seasonality,	trends,	promotions	and	
analytics, the framework ensures                 events	that	predictably	affect	demand.
super-efficient demand forecasting. As        •	 Introduce	new	products,	define	“like	item(s)”	and	manage	demand	signals	with	integrated	
a result, SAS Demand Forecasting for             merchandise	planning	workflow.	
Retail has proven extreme scalability in      •	 Decomposition	of	sales	to	clearly	see	the	historical	demand	patterns	of	merchandise	through	
highly complex benchmark scenarios,              seasonal	component,	trend	component	and	irregular	component	analysis.	Helps	investigate	
running multiple concurrent forecast             trends	and	seasonal	variation	in	sales.
jobs at retail enterprise levels.             •	 Support	for	top-down,	bottom-up	and	middle-out	forecast	reconciliation.
                                              •	 Control	of	the	models	and	workflow	at	a	forecast	job	level	for	specific	merchandise,	location	
                                                 levels	or	external	criteria,	as	well	as	for	a	particular	KPI.
Parallel processing capabilities deliver
                                              •	 SAS	Forecast	Studio	provides	exception-based	forecasting	to	simulate	and	monitor	any	un-
even greater assurance of high per-
                                                 usual	parameters	that	are	input	in	manual	mode.
formance in a large-scale forecasting
                                              •	 Ability	to	specify	flexible	effect	parameters	that	influence	forecasts.	For	example:	event,	price,	
environment. SAS Demand Forecast-                weather	and	promotions,	including	halo/cannibalization,	pantry	and	delay	promotional	effects.	
ing for Retail automatically separates        •	 Ability	to	allow	defined	KPIs	to	be	executed	within	a	forecast	job.	For	example:	sales	units,	
workloads with millions of time series           sales	dollars,	inventory	count,	etc.	
forecasts into smaller jobs that are          •	 Model	revisit:	saving	the	model	in	a	repository	for	subsequent	forecast	runs.	This	helps	
executed in parallel and then merged             analysts	review	the	soundness	of	a	particular	forecast	model	based	on	changes	in	business	
back together. By using SAS/CON-                 conditions.
NECT® to drive these jobs, the system         •	 In-season	planning:	forecast	revisit	and	progressive	weeks	re-forecast	based	on	new	history,	
can seamlessly process forecasts on              each	week.
remote and local servers. Thus you can        •	 Archive	forecasts.	Ability	to	archive	a	configurable	number	of	prior	forecasts	so	that	forecast	
                                                 accuracy	reports	can	be	generated.
easily add hardware to meet forecast-
                                              •	 Configurable	standard	forecast	reports,	including	options	for	plots	and	statistical	measures.	Re-
ing needs as they grow.
                                                 ports	may	be	saved	as	HTML,	PDF	or	Excel	documents	and	are	accessible	from	SAS	Merchandise	
                                              •	 Supports	multiple	country	formats	and	database	configurations	for	dates,	currency	and	language.	
                                              •	 Includes	effective	error-handling	mechanism	to	report	any	issues	occurring	within	the	forecast-
                                                 ing	process.
                                              •	 Operability	with	SAS	grid	technology	allows	you	to	add	more	computing	horsepower	while	
                                                 keeping	hardware	costs	low.
Comprehensive Retail Intelligence                      SAS® Demand Forecasting for Retail                                              About SAS
                                                       Software Components
SAS Demand Forecasting for Retail is                                                                                                  SAS is the leader in business analytics
just one part of SAS’ vision for com-                  SAS® Forecast Server                                                           software and services, and the largest
plete retail intelligence. Retailers can               SAS® BI Server                                                                 independent vendor in the business
employ a wide range of powerful SAS                    SAS/ACCESS®                                                                    intelligence market. Through innovative
solutions, all built atop a common retail                                                                                             solutions delivered within an integrated
business intelligence platform, to allow                                                                                              framework, SAS helps customers at
for rapid integration and lower total cost             SAS/SHARE®                                                                     more than 45,000 sites improve per-
of ownership. These solutions include                                                                                                 formance and deliver value by making
                                                       Technical Requirements                                                         better decisions faster. For nearly three
nearly three decades of SAS retail ana-
lytics experience and merchandising                    Client environment                                                             decades, SAS has been giving retail
best practices. No other vendor offers                 •	Microsoft	Windows	(x86-32):	                                                 organizations THE POWER TO KNOW ®        .
such a comprehensive, integrated set                     Windows XP Professional                                            
of solutions for retailers.
                                                       •	Internet	Explorer
                                                                                                                                      SAS is an associate member of the
•	 SAS Customer Intelligence —                         Server environment
                                                                                                                                      National Retail Federation.
   Identify, acquire, activate, serve and              SAS servers, including Base SAS and
   retain profitable customers.                        SAS Metadata Server, can be installed
•	 SAS Merchandise Intelligence —                      on one or more hardware systems in a
   Drive revenue, protect margins                      multitier configuration.
   and earn customer loyalty with                      •	AIX	(64-bit),	Release	5.1+
   optimized merchandise plans,
                                                       •	Solaris	(64-bit),	Version	8,	9	or	10	
   assortments, demand forecasts,
                                                         on SPARC
   pricing, promotions, space plans
                                                       •	Microsoft	Windows	(x86-32):	
   and allocations.
                                                         Windows	Server	2003
•	 SAS Operational Intelligence —
   Leverage	organizational	assets	to	                  Web tier
   serve customers and trade with                      •	SAS	includes	a	reference	
   vendors efficiently and profitably.                   implementation of Apache Tomcat.
•	 SAS for Performance Management
   — Analyze, forecast and maximize
   profits across the entire value chain
   and monitor performance toward
   common goals.

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