Oracle RPAS Planning: How Luxottica is tailoring its offering to customers. Boston, March 25 th, 2014

Transcription

1 Oracle RPAS Planning: How Luxottica is tailoring its offering to customers Boston, March 25 th, 2014

2 Agenda Ø Luxottica, The Company Ø Sunglass Hut, A Tailored Product Offering Ø Retail Merchandise Planning, The Background Ø Oracle RPAS, The Program Journey Ø Sunglass Hut, Main Achievements Ø What s Next Ø Q&A 2

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4 Luxottica, Over 50 years of carefully planned growth Is launched. The foundation provides free vision care and eyewear around the world to those in need. Among the leading optical retailers in Australia and NewZealand. Acquisition of the license 2005 The first Luxottica optical eyewear collection debuts at the MIDO international trade fair in Milan Enters the group One of the largest optical retail chains in North America Enters the group Acquisition of the license 1999 Acquisition of the license Acquisition of the license 2003 Acquisition of the license Enters the group. Includes Oliver Peoples, Paul Smith and a retail network of 160 stores. Acquisition of the license 2008 Acquisition of the license Enters the group Leonardo Del Vecchio founds Luxottica. Enters the group e C.S.A.S., which in 1964 was transformed into a joint-stock company named Luxottica S.p.A Luxottica Group is listed on the NYSE. Enters the group Acquisition of the license 2000 Luxottica Group is listed on the Milan Stock Exchange A major retailer of premium sunglasses A leading retail chain in North America. Acquisition of the license Acquisition of the license Acquisition of the license Acquisition of the license Acquisition of the license 2011 Acquisition of Tecnol, Brazil 4

5 Luxottica Retail, 7,000 Store Network NORTH AMERICA 4,730+ OPTICAL SUN EUROPE 430+ OPTICAL SUN CHINA & HONG KONG 200+ OPTICAL LATAM 650+ OPTICAL SUN S. AFRICA 120+ SUN SUN AUSTRALIA & NZ 800+ OPTICAL SUN 5

6 Luxottica, A vertical integrated business model PRODUCT DEVELOPMENT MANUFACTURING LOGISTICS WHOLESALE DISTRIBUTION STARS (VMI) RETAIL NETWORK LENS FINISHING MANAGED VISION CARE CUSTOMER 6

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9 Sunglass Hut: Tailoring product offering to customers Strong Product Portfolio Powerful Store Segmentation Fresh Flower Product Model 360 Story Telling Approach 9

10 Sunglass Hut: A Strong Product Portfolio ü The most significant brands ü The hottest trends 10

11 Sunglass Hut: A Powerful Store Segmentation Strategy Platinum Build Sunglass Hut Brand Equity Showcase Luxury/Premium Brands Outlet Exit strategy with opamized margin and oﬀering of great brands at a great value Gold & Silver Deliver consistent experience across high store count base to build Sunglass Hut loyalty Department Store Capture new customer through Host Broader access to Luxury Brands ecommerce sunglasshut.com macys.com amazon.com Inﬁnite assortment 11

12 Sunglass Hut: A Fresh Flowers Product Model Virtuous cycle to efficiently design, manufacture, deliver & communicate more consumer-relevant & engaging products Product Flow Product Briefing Product Development Technical Design Assortment Planning Lifecycle Mgmt Production Planning Exit Strategy 360 Story Telling 12

13 Sunglass Hut: A 360 Story Telling Approach Associate Enhanced story-telling enables ü More frequent, tailored-made stories ü Maximizes story-telling potential of the store Macy Books & Window PR Results TSQ Billboard SGH.com ü Lift in consumer engagement ü Increased frequency of store visits ü Increased conversion Front Door Digital Media Social CRM DM & 13

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16 Why A New Planning Program? ü Manage large store count with tailored assortments ü Leverage newness for compeaave edge ü Modernize our planning process ü Life- cycle management ü Balance integrated lead Ame planning with short term needs ü Supply chain integraaon to opamize inventory and service levels 16

18 In 2009 Luxottica launched a new Planning Program selecting Oracle RPAS as the application 1. Leading Planning Application 2. End to end coverage of Integrated Planning Processes 3. Optimization engines and mining capabilities available for future enhancements 4. Minimize Total Cost of Ownership I. Configurable application II. Community of Partners 18

19 Luxottica RPAS Global Templates: Frames and Lenses FRAMES Frames, Lenses & Contacts Planning Modules ALOE! Strategic Targets! Merchandise Planning! Location Planning! Assortment & Item Planning! Optimization engine (ALOE)! DC Planning LENSES & CONTACTS The Global & Local Domain structure enables a roll out of the solution at different extents of complexity 19

20 RPAS Global journey started in April 2010 Apr 10 Aug 10 Aug 11 Jun 12 Aug 12 May 13 Program Management Business Blue Print Implementa?on Streams Aug 13 Nov 13 Feb 14 May 14 Global model defini?on considering sun and op?cal divisions: Frames SUNGLASS HUT: US + UK Blue Print Lenses Frames + Lenses: LENSCRAFTERS Frames SOUTH AFRICA Frames + Lenses PEARLE, SEARS, TARGET Frames: MEXICO Frames + Lenses AUSTRALIA & NZ Global template finaliza?on and Project Approach review Frames IBERIA Frames: STARS Frames ITALY, GERMANY Change Management 20

21 Luxottica RPAS: Current and future footprint Sales org already live Next streams Spain Turkey SEA Brazil, Chile & Latin America 21

22 Luxottica RPAS: Support Team and Change Control Board RPAS Support Team For all global RPAS issues, Luxottica developed a support team to support the business. Change Control Board As a result of a global template approach for the RPAS roll-out, a Change Control Board (CCB) has been identified to govern and check all the Change Requests (CRs) and their consistency with the global strategy. The CCB is representative of the different businesses and geographies. 22

24 Sunglass Hut Global Growth ~2,000 stores 4 Countries 665 Million Sales YOY Comp: ~ -7% ~3,000 stores 9 Countries 1.1 Billion Sales YOY Comp: +11.5% ü Mature Markets growing at 7% ü Emerging Markets doubling at 105% growth +42% +65% SGH Ambition for the next 3-5 years: ~4000 stores and 2B! 24

25 Sunglass Hut NA: RPAS Drives Results SALES ü POLARIZED SERVICE ü IN STOCK INVENTORY ü UNIT TURN 25

26 Sunglass Hut NA: Attribute Strategy Drives Sales ü Strategic polar attribute planning provided clear roadmap to 48% polar penetration and four years of 15% to 25% polar sales growth per year SUN UNIT POLAR PENETRATION SALES GROWTH 50% 48% 46% 44% 42% 40% 38% % 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% POLAR POLAR TTL SUN 26

27 Sunglass Hut NA: Increase In Inventory Productivity ü Strategic RPAS parameter planning drove 17% unit turn increase, while maintaining in >97% in-stock service level on key items KEY ITEM IN STOCK (GOAL >97%) P12M UNIT TURN 100.0% 98.0% 96.0% 94.0% 92.0% 90.0% 10 Q2 10 Q3 10 Q4 11 Q1 11 Q2 11 Q3 11 Q4 12 Q1 12 Q2 12 Q3 12 Q4 13 Q1 13 Q2 13 Q3 13 Q Q4 11 Q1 11 Q2 11 Q3 11 Q4 12 Q1 12 Q2 12 Q3 12 Q4 13 Q1 13 Q2 13 Q3 13 Q4 QTR QTR 27

28 Sunglass Hut NA: Fresh Flowers from Idea to Reality New Product Flow balanced with Key Items ~1,000 new skus represent 65% of product offering Still, 60 UPC s, 7% of store display, generate 25% of sales, with service level >97% New Storytelling ~120MM visits with ~7% conversion ~40 Front Door campaigns, an average of 2 per segment per month 28

30 Luxottica is fully focused on global consistency Apr 10 Aug 10 Jun 11 Aug 11 Mar 11 Jun 12 Aug 12 Jan 13 May 12 Aug 12 Program Management Business Blue Print Implementation Streams Frames SGH: US + UK Global model definition Blue Print Lenses Frames + Lenses: LC considering sun and optical divisions: Frames RSA Frames + Lenses LLB Frames: MEX Global template Frames DC UK Frames + Lenses LLB 1 Complete the Retail roll out finalization and Project Approach review Change Management 2 Launch STARS, wholesale model 3 Fully leverage Customer Data within Store Clustering 4 Bolt on Optimization Engines 30

31 Q&A 31