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Seeing the big picture

Sony Pictures Home Entertainment digs deeper into DVD sales figures.

by Dan Heilman

The dream of any maker of consumer products is to have instant, accurate access to data about who is buying those products, where customers are purchasing the products and what is motivating the sales. That vision is coming closer to reality for Sony Pictures' Culver City, Calif.-based Home Entertainment division (SPHE), thanks in part to its Teradata Warehouse.

Seeing the big picture
David Cortese, vice president and division CIO of Sony Pictures Home Entertainment, works to ensure top-of-the-line home entertainment options.

SPHE—a multi-billion-dollar division of Sony that supplies retailers and rental stores with Sony's roster of more than 3,500 DVD titles—selected an enterprise data warehouse (EDW) when implementing its new platform. The company saw its customer base expanding and realized that tracking the 500 million product units from warehouse to retailer was getting more and more challenging.

SPHE also wanted a way to make more timely decisions about when and where to replenish stock. The company was finding that sales information that was days or weeks old was nearly worthless, while hours-old data would be invaluable.

"Besides providing new information that wasn't visible before, putting together the reports has allowed considerable time savings," says David Cortese, vice president and division CIO of SPHE. "Prior to the data warehouse, some of our reports took up to 40 hours to put together. Now these reports are ready in literally a few minutes."

The adoption of the EDW system was a yearlong process that began in May 2005 with an internal predesign stage. Sony's 15-member project team hit all of their schedule and budget benchmarks during the development process, and eventually rolled out the data warehouse to 250 users within the Sony enterprise.

"The [data] warehouse is open to all of the users in the Home Entertainment business across all divisions, including sales, finance and operations," says Cortese.

Along with its breakneck speed, which is the EDW system's chief advantage, comes the level of detail it brings to product reports, both from the perspective of store activity and specific stock keeping units (SKUs) or product types.

"We can tell you how many copies of any given title were purchased by every customer at the individual store level," says Cortese. "For example, we can quickly learn that five copies of 'The Da Vinci Code' were purchased last Tuesday at a specific store in Watertown, Connecticut.

"The main areas where we hope to be able to leverage this data," Cortese adds, "are price point analysis, or determining the most advantageous pricing to optimize revenue; and marketing spend analysis, or analyzing the effectiveness of marketing spending relative to the performance of titles."

The system also lets users drill down into subcategory granularity of product sales. Instead of tracking only how many copies of a given DVD were sold in the time period specified, it can show how many widescreen versions of the title were sold versus full-screen versions, how many deluxe editions of the title were sold and so on.

Another tremendous feature is the ability to see activity across SPHE's different product types such as Sony's newly released high-definition Blu-ray format versus traditional DVD. SPHE also now has the ability to look at the profitability of products by retailer as well as by title.

"Additionally, the reporting also allows us to see at a SKU-level detail what product is being returned," says Cortese. "This gives Sony a better view of what product types are selling, and also allows us to see what is being returned relative to sales."

As much as the EDW enriches SPHE's product reports, Cortese says the company hopes to rely on it moving forward to create areas of efficiency that would have been either difficult or impossible to attain in the past. The next step, according to Cortese, is loading competitive data, such as Nielsen ratings, into the data warehouse.

"Another area in which we hope to leverage the information is in analyzing our freight spending," says Cortese. "We look at the type of freight used—overnight, ground and so on—and study that to determine areas to save costs.

"We can also analyze the customer rebates we offer to see if they actually are helping to increase revenues and how they are affecting our customer profitability," Cortese adds.

The main focus of this enterprise-wide adoption of the data warehouse, however, is to learn as much as possible about the product sales of each DVD in SPHE's catalog and to apply that information to the division's future plans.

"The hope is that Sony will be able to leverage the information going into the data warehouse for either cost savings or revenue enhancements," Cortese says. T

Dan Heilman is a writer and editor based in St. Paul, Minn.

Photograph by Brad Hines

Teradata Magazine-March 2007

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