SAS Global Forum: Macy’s Speeds Pricing, Cuts Hardware Costs With SAS Markdown Optimization

With 73 million items for sale in more than 800 stores, Macy’s needs to process hundreds of millions of pricing decisions each week, said Brian Leinbach, SVP, Systems Development Applications for Macy’s, during the SAS Global Forum this week. “We have the largest combination of products and locations in retail” in the U.S., he noted. Macy’s, which operates Macy’s and Bloomindale’s department stores, also sells $12 million to $15 million in promotional and markdown items each year, Leinbach added.

In order to properly price each item on a weekly basis, Macy’s looks at two to three years’ of historical information. Prior to implementing SAS Markdown Optimization, this was an unwieldy process for the retailer. Following the implementation, Macy’s was able to “complete the analysis 22 times faster,” Leinbach reported. Average analysis time decreased from 27.25 hours to 1.25 hours.

“We are now able to analyze pricing, for example on the line of spring knits across all categories, in 95% less time,” according to Leinbach. Macy’s also has saved 70% in hardware costs using the new system.


Leinbach shared his success story during the opening session of the SAS Global Forum Executive Conference, attended by more than 600 business executives. The Executive Conference was held in conjunction with the SAS Global Users’ Conference, a meeting that drew 3,500 business and IT users of SAS solutions — 25% from outside the U.S., according to Debbie Buck, SAS Conference Chair.

Other Forum Retail Speakers
In addition to Macy’s, executives from a number of other retail companies participated in conference presentations, including: Winn Dixie, Staples, Family Dollar,, NexTag, Chico’s, and Finland-based SOK Grocery.

During the session, Angela Watson, VP of Analytics, shared information about how the online retailer is slashing marketing expenses for email campaigns using SAS Enterprise Miner and SAS Scoring Accelerator. For one campaign in particular, the $1 billion retailer saved 8% in marketing spend, Watson reported.

Executives from Winn Dixie, Family Dollar and SOK joined Tom Compernolle from Deloitte Consulting for a panel discussion on “Driving Performance Improvement Through Retail Analytics.” Each retail executive talked about the importance of analytics, the direction of loyalty and the need for best-in-class analytics solutions. The group also touched on retailer-vendor collaboration. Chris Vukich, VP at Winn-Dixie, mentioned that the supermarket retailer currently is piloting a data-sharing program with Kraft and Pepsi. “The key challenge is that (the collaboration) must product better business results,” said Vukich. “It is difficult to show results for sharing data, so we will continue to roll out this program slowly.”

The event was centered on the theme “The Power of Analytics” and also featured speakers from other industries, such as banking, healthcare, sports and hospitality.

Retail Announcements At The Forum
During the Global Forum, SAS delivered a number of retail-related announcements:

  • To be released during April 2011, the latest version of SAS Customer Intelligence includes enhanced integration with campaign planning and optimization, new utilities to improve the efficiency of campaign planning, and further improvements in the integration between online and offline analytics. Both Winn-Dixie and Chico’s are implementing SAS Customer Intelligence this year.
  • SAS will debut SAS Conversation Center in 2011 to help companies better engage with customers via Twitter. SAS Conversation Center will focus on helping companies capture, categorize, analyze and route Tweets in real time to assist in the identification of those most relevant and urgent that warrant a response. These Tweets are then assigned to a work order, routed to customer-facing personnel to respond, and tracked with the same rigor as issues flowing through the call center. SAS Conversation Center is a new module of SAS Social Media Analytics, which was released in April 2010.

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