Paul Donovan

Global Senior Director, Retail Business Unit at SAP
Paul Donovan is a Global Senior Director, Retail Business Unit at SAP. In this role he oversees worldwide programs in Marketing, Merchandising and Predictive Analytics. He consults and advises on future trends in Retail to SAP customers and prospective customers and drives future requirements into product.

Paul is often featured in various publications on thought leadership issues. He has spent the last 20 years advising and consulting on technology solutions in both Retail and Consumer Products in areas such as Marketing Effectiveness, Pricing and Promotional Strategy and Consumer Insights. Previously, he worked at DemandTec, SAS Institute and Ariba in a variety of roles in strategy, sales and consulting.
  • Posted on: 09/12/2017

    Do grocers need to reset the center store?

    Roy makes a great point regarding what is the stimulus or tipping point that will motivate the center store paradigm shift. In my view it is possible that an effort to do digital in store merchandising, a revamp of the infrastructure will be needed. This would allow the grocer a chance to change the existing footprints.The larger question may be what % of trade funds come from traditional center store vendors. I can hardly think these smaller more innovative vendors can pitch in the amount of co-marketing funds the larger established players do. That may be a tipping point too, i.e. when the manufacturers do a significant strategy shift re trade dollars, even though this is talked about for many years, it may be coming closer due to digital competition and opportunities.
  • Posted on: 09/12/2017

    Nordstrom tries a no-merchandise store

    As with the other commentators I applaud Nordstrom for trying new experiences and formats. If they can solve the problem of what jeans fit you better as you age they will have done something good!
  • Posted on: 09/12/2017

    Gap Inc. leans more heavily on Old Navy and Athleta

    The risk for Gap is that the Old Navy brand is far more promotional in merchandising strategy and this would drive gross margins lower overall which would affect their profit margins and thus their appeal to shareholders. They need to be measured with this change of strategy as we have seen all the other examples of impact when retailers make dramatic changes to their approach -- J.C. Penney, Kmart etc.
  • Posted on: 09/12/2017

    Will lower everyday prices boost Target’s traffic and sales?

    Target's grocery segment is a small part of their operation, at least according to grocery estimates from industry magazines. This is the area in which the shopper would notice the price the most. It seems that Target also needs to think through a new form of experience in their stores. My local store really has not changed much in the last several years and therefore it doesn't have that destination appeal needed to overcome price-only decision makers.
  • Posted on: 08/25/2017

    Will Amazon become a dominant force in grocery after acquiring Whole Foods?

    Four companies control about 80% of the US Grocery market. Walmart, Kroger, AB Acquisition (Albertsons) and Ahold/Delhaize. According to Cowen (2016), AMZN Fresh is an $8.7B business (excludes the center store business) so already Whole Foods plus Amazon is at least No 7 in the US Grocery business with a combined revenue of > $20B in grocery. (the 1.x % figure mentioned above is somewhat misleading in this regard) . All this without leveraging the combined assets. From 2009 Walmart went from about 25% of US grocery to about 50% now, so I think there is plenty of room for growth for both Amazon and newer players such as Lidl, Aldi etc. as there is clearly both growth for some players and, pardon the pun, shrinkage for others!
  • Posted on: 08/25/2017

    What’s delaying BTS selling?

    On a recent BTS visit to a physical office supply store (not a common undertaking), I noticed about 10+people waiting for quite some time in checkout line with one person serving and less than 3-4 associates in the whole store. I decided to exit without purchase and do the purchase later (online). I don't like to typically use anecdotes as common practice, but this was quite alarming to see given the stress this retail sub vertical has been under.
  • Posted on: 08/25/2017

    Do retailers need to buy the loyalty of consumers?

    According to one study 86% of shoppers are willing to pay more for a better experience even while most shoppers claim price is top of mind. The truth may be somewhere in the murky middle.I agree that price and value are important however the retailer doesn't always understand the true price they are representing in the market because they can't keep up with the competitive onslaught of data. Price intelligence at a systemic level is rare, rather there is price matching, reactionary pricing, not well understood discounting going on. Surveys rarely match scientific benchmarks, so there is a variance between perception and reality.Customer experience is also a hazy area to define well. The concept of dealing with a store associate who is really trying to help you is equally rare. Loyalty can be gained through empathy based service rather than up-selling based tactics. I am not sure how many training programs emphasize this vital component of loyalty.
  • Posted on: 08/16/2017

    Will military tech give Amazon an edge delivering packaged meals?

    Once I hear the word microwaved, I think it cannot possibly preserve the natural benefits of products. One of the more recent topics I was engaged in is the re-invention of the center store grocery offering. A lot of grocers are planning what the future may look like. The notion of a more healthy nutritional set of products is one area of discussion using smaller manufacturers that have more flexibility to develop innovations. It seems this offering is moving away from healthy, at least in the process description (MATS)!
  • Posted on: 08/16/2017

    What bad habits do retail solution providers need to break?

    One of the things that greatly influences the retailer/vendor process is "competition." Essentially most engagements are competitive at the onset as the retailer wants choice and pricing leverage. The competitive process itself can sometimes blur the ultimate goals as it influences a lot of the interactions. Many RFPs that are written can be vast in scope and clearly not well understood or correlated to the problem at hand. In newer studies on project success both internal and partner based, have found that true collaboration across stakeholders with shared KPI's can lead to the best outcomes. This could be a way to rethink the vendor/sales retailer interaction process.
  • Posted on: 08/16/2017

    Will more promos fix Dick’s Sporting Goods pricing challenge?

    It's an interesting coincidence that the CEO of Under Armour just came out with statements saying they needed to preserve brand pricing power to be successful in the long term. In this regard, that vendor would probably not want to discount their products. Dick's itself has been noted about their various pricing optimization initiatives over the years so perhaps it really is a price perception rather than price competitiveness issue? Either way, the other commentators are spot on when they talk about the experience being the differentiator as that is what ultimately drives traffic along with a good assortment and newer digital engagement practices.
  • Posted on: 08/11/2017

    Is it time to reinvent category management?

    Great points Graeme! I would say that even though analytics and category management methodologies have developed rapidly over the years, other execution systems have lagged. What this has resulted in is a highly difficult ability to scale strategy around the consumer-centric analysis. A large portion of FMCG retailers in the US still have many mainframe systems in place which pre-date category management origins. What this results in is a lack of capability to execute around a shopper/consumer dimension and general system disconnects across stakeholders in operations/supply chains, etc. This is why we see category managers still spend a lot of their time chasing fires over implementing new strategies. It's almost akin to the strategy/planning systems talk one language e.g. French and the execution systems talk another e.g. English. What the industry needs is someone to develop these translation or reconciliation methods as much as more advances on the strategy side.
  • Posted on: 08/11/2017

    Is a positive quarter a sign of results to come for Nordstrom?

    After looking at the breakdowns, it seems that full line physical, while down (4.4%) was not down as much as last year at (6.5%) and full line .com up 19.8% from 9.4% in prior year.Rack physical went down to negative comparable to (1.0%) from positive 1.1% last year. Rack .com growth slowed to 26.7% from 34.7% last year.One could make the point that physical comps are still under pressure due to lack of cross channel growth. Clearly online is in good shape as a standalone, but not the cross channel engagement as the physical comps are still under pressure.Nordstrom has enviable online results in a lot of respects doing 43% of total sales in full line and 20% of sales in rack business which are good figures for ratio comparisons. If they convert a healthy % of the online shopper to visit physical, over time it should help greatly their long-term prospects.
  • Posted on: 08/04/2017

    Are the four Ps of marketing irrelevant for retailers?

    Great point Kevin, I definitely notice a correlation between the happier store associates in certain brands and the experience and the not so happy associates in other brands. I often wonder is this just down to wages or perhaps a combination of influences such as training, corporate culture etc. I think the experience is driven by the people agenda as much as any other factor, at least in the physical realms of shopping. Of course the price and or good value is also important given the US consumption and wages history over the last several years.
  • Posted on: 08/04/2017

    Can customer journey methodology level the playing field for brick and mortar retail?

    When I engage with merchants and category managers, the single largest concern is the time they have on hand to make decisions. They are consumed with fighting a lot of fires regardless of channel purchase. It leads me to think that even though customer journey mapping, foot traffic analysis, market basket analysis etc. are all highly useful tools that something is missing from the equation in terms of how to consume these insights and act on them intelligently and at scale. As one of the earlier posters mentioned quite insightfully, there are lots of data/knowledge sources and they're growing daily, but how to harness in a practical and scalable way will be the real breakthrough for merchant practitioners, IMO.

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