Targeted Intelligence

Managing Your Data to Maximize

Your LP Efforts

Cynthia Malizia, Director of LP Blockbuster, Inc.

Dan Shaw, VP of LP Gap Inc.
The LP Data Dilemma
Finance
Finance

Customer
Customer Operations
Operations

LP
LP
Labor
Laborand
and Data
Data Marketing
HR Marketing
HR

Supply
Supply
E-Comm
E-Comm Chain
Chain

2
 Create Store
Management
Responsibility

Emphasise
Talk Shrinkage Procedural
Control

Prioritise Innovation Prioritise

and Experimentation People

Strong LP Leadership Data Management

Organisational Ownership Embedding Loss Prevention

Senior Management Commitment

© For further information contact Adrian Beck: bna@le.ac.uk 3
 LP Dilemma to LP Dream
• Fragmented, multiple • Single version of
data sources/reports truth
• Disparate business • Business logic and
logic and rules rules driven
• High latency for TO • Real-time, proactive
BE
information makes data
data reactionary • Root-cause
• Raw data and basic oriented
reporting not • Predictive Modeling
actionable

4
 LP Data Transformation
Reporting Analysis Intelligence Targeted Intelligence

• Business rules
driven
• Single version
of truth • Actionable, real-
• Trending
time data
• Raw Data analysis • Dashboard
• Alert notification
• Multiple • Basic reporting • Performance
down to associate
sources Metrics
• Shows general level
• Actual vs direction • Business logic
• Directs resources
Budget driven
to root cause
• Non-actionable • Predictive Model

LOW Strategic Value HIGH

5
 Starting the Transformation
 What’s the Plan?
 Speak the Same Language
 Mirror and Mimic Ops Data
 What’s the Score?
 Two Clicks Rule!

6
 What’s the Plan?
Establish a LP Data Transformation Plan that:
• Is synchronized with what matters most to
Executive and Field Operations
• Drives broader business decisions
• Consolidates data for single version of truth
• Focuses on root causes and predictive
opportunities
• Is Actionable by both LP and Field Operations

7
 Speak the Same Language
LP reports, scorecards and dashboards should reflect how
your Executives and Operators routinely look at revenue,
sales and controllables data:
• Determine how key LP metrics should be stated so they are
universally understood by Operations and Executive
Management:
– per hour/shift/day/week
– per square foot
– per transaction
– per average check
– Gross vs. Net numbers
• Include Operations sales/revenue metrics for relational
comparison to LP metrics
8
Mimic and Mirror Ops Metrics

9
 Restate core sales metrics
for relational comparison to
LP performance metrics

LP - Key Metrics Results

Bad D
Weekly Average Per Store PTD Average per Store
Reporting for
Total Total
Store TNR
TNR Avg Check Bad Debt Total Shrink Controllable Bad Debt Total Shrink Controllable
Count Comp
Losses Losses
6-Apr
9.00 1000.0% $121.00 49.00 7 50.00
E01 172 $ (198) $ (378) $ (576) $ (857) $(1,140) $ (1,997)
E02 197 $ (207) $ (373) $ (580) $ (899) $(1,349) $ (2,248)
E03 218 $ (182) $ (226) $ (407) $ (856) $ (733) $ (1,588)
E04 186 $ (242) $ (33) $ (275) $ (1,074) $ (536) $ (1,611)
E05 196 $ (239) $ 9 $ (231) $ (1,032) $ (524) $ (1,556)
E06 176 $ (233) $ (128) $ (361) $ (1,087) $ (688) $ (1,774)
E07 273 $ (231) $ (188) $ (419) $ (1,023) $ (838) $ (1,861)
E08 181 $ (214) $ (140) $ (354) $ (1,018) $(1,069) $ (2,087)
E09 214 $ (237) $ (87) $ (324) $ (1,045) $ (801) $ (1,846)
E10 191 $ (226) $ (155) $ (380) $ (970) $ (772) $ (1,742)
1.2

1
TNR
NRR
0.8

0.6

0.4

10
0.2

0
1
 Color code risk to direct
focus to critical
opportunities and what
matters most

LP - Key Metrics Results

Bad D
Weekly Average Per Store PTD Average per Store
Reporting for
Total Total
Store TNR
TNR Avg Check Bad Debt Total Shrink Controllable Bad Debt Total Shrink Controllable
Count Comp
Losses Losses
6-Apr
9.00 1000.0% $121.00 49.00 7 50.00
E01 172 $ (198) $ (378) $ (576) $ (857) $(1,140) $ (1,997)
E02 197 $ (207) $ (373) $ (580) $ (899) $(1,349) $ (2,248)
E03 218 $ (182) $ (226) $ (407) $ (856) $ (733) $ (1,588)
E04 186 $ (242) $ (33) $ (275) $ (1,074) $ (536) $ (1,611)
E05 196 $ (239) $ 9 $ (231) $ (1,032) $ (524) $ (1,556)
E06 176 $ (233) $ (128) $ (361) $ (1,087) $ (688) $ (1,774)
E07 273 $ (231) $ (188) $ (419) $ (1,023) $ (838) $ (1,861)
E08 181 $ (214) $ (140) $ (354) $ (1,018) $(1,069) $ (2,087)
E09 214 $ (237) $ (87) $ (324) $ (1,045) $ (801) $ (1,846)
E10 191 $ (226) $ (155) $ (380) $ (970) $ (772) $ (1,742)
1.2

1
TNR
NRR
0.8

0.6

0.4

11
0.2

0
1
 LP - Key Metrics Results

Weekly Average Per Store PTD Average per Store

Reporting for

Store TNR
TNR Avg Check Bad Debt Total Shrink
Count Comp

Use charts for easy

6-Apr
9.00 1000.0% $121.00 49.00 7
E01 172 $ (198) $ (378)
E02 197 $ (207) $ (373)
E03
E04
E05
218
186
196
$ (182)
$ (242)
$ (239)
$
$
$
(226)
(33)
9
visualization of short- and
long-term trends
E06 176 $ (233) $ (128)
E07 273 $ (231) $ (188)
E08 181 $ (214) $ (140)
E09 214 $ (237) $ (87)
E10 191 $ (226) $ (155)
2004
1.2

EAS 1
$ 15,587
TNR -5.0% $7.41 $ (221) $ (169)
NRR
0.8

183 $ (196) $ (124)

1.2

W01 0.6
1
TNR
190 $ (223) $ (110)
0.4

W02 NRR
0.8

0.2
0.6

W03 178 $ (194) $ (58)

0
0.4 1

0.2

W04 182 0
1
$ (158) $ (168)
W05 213 $ (214) $ (184)
W06 187 $ (204) $ (315)
W07 206 $ (178) $ (305)
W08 211 $ (284) $ (316)
W09 196 $ (245) $ (207)
W10 213 $ (228) $ (196)
1.2

WES 1959 1
$ 15,282
TNR -3.7% $7.01 $ (214) $ (201)
NRR
0.8
1.2

DOM 3963
0.6
1
TNR
$ 15,436 -4.4% $7.21 $ (217) $ (185)
0.4

NRR
0.8

0.2
0.6

3965 $ 15,860 6.1% $ (176) $ (174)

0

PREVIOUS WEEK DOM

0.4 1

0.2

0
1

Shrink and Bad Debt Actual to Budget by Store

$5
ou
nt
m
A

$0 Shrink
1
Week Bad Debt
Shrink as % to TNR Bad Debt as % to TNR

1.60% 2.90%

1.40% 2.40%
1.20%
1.90%
1.00%
1.40%
0.80%

0.60% 0.90%

0.40% 0.40%
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Period Period

2006 2007 Actuals 2008 Budget 2008 Actuals 2006 2007 Actuals 2008 Budget 2008 Actuals

12
What’s the Score

13
 Gap NA Security Tier Profiles

Avg Avg % of Avg Avg Avg # of Targe

Risk Security # of Shtg Stores/ Cap EIS Strs/Agen t Str % of
Rating Tier Score Stores Rate Tier Index Index t % Shortage

Low 1 394 552 (1.51)% 50.7% 190 46 80.4 3% 21.6%

Medium
Low 2 619 179 (2.55)% 16.5% 284 107 11.3 12% 15.1%

Medium 3 727 165 (3.32)% 15.2% 308 145 7.5 42% 21.0%

High 4 828 113 (4.16)% 10.4% 361 192 2.7 58% 20.1%

Very High 5 963 79 (4.62)% 7.3% 579 355 1.0 81% 22.1%

  Avg/Ttl 568 1,088 (2.46)% 100% 271 109 6.4 22%  

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Tier 5
Tier 4
Tier 3
Tier 2
Tier 1

15
Tier 5
Tier 4
Tier 3
Tier 2
Tier 1
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 New Store/Remodel Loss Prevention Resource Calculator
                             

Longitud If you do not have Lat/Long for a US o

    Latitude   e   store, go to this web site:   Geocod r Lat/Long    
er.us Finder

-
Enter Latitude & 39.615 105.062 If you do not have Lat/Long for a o
  Longitude 767   021   Canadian store, go to this web site:   Geocod r Lat/Long    
er.ca Finder
-
Use the following 39.615 105.062
              Lat/Long format: 767   021        

                             

Security Tier of Calculated based on the average of the five

  Store 1       closest stores across the Gap Inc. NA Fleet.      

                             

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Nearest Stores          

Ran Distance
Old Navy NA k (miles)
Tier Store # Store Name

*** 1 1.4 1 5719 S 5719 BELLEVIEW SHORES

*** 2 5.4 1 5720 S 5720 CHERRY HILLS MKTPLACE

0 3 6.5 1 6435 S 6435 LAKEWOOD CITY COMMON

0 4 9.9 1 5895 S 5895 DENVER WEST VILLAGE

0 5 10.2 1 5858 S 5858 MEADOWS MARKETPLACE

           

Banana Republic Ran Distance

Tier Store # Store Name
NA k (miles)

*** 1 3.0 1 3047 S 3047 ASPEN GROVE

0 2 9.2 2 8156 S 8156 CHERRY CREEK
0 3 9.6 1 8444 S 8444 DENVER FASHION
0 4 10.7 2 8261 S 8261 PARK MEADOWS
0 5 22.0 1 8560 S 8560 FLATIRON CROSSING
           

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 Step 1. Choose State Step 2. Choose Brand Step 3. Choose City or Choose Airport
Florida Gap Orlando, FL

Distance Distance
Store # Location Name Brand Company Address City Name State Zip
Rank (miles)

1 5.1 4404 S 4404 FLORIDA Gap US GAP                             8001 South Orange Blossom Trail ORLANDO FL 32809
2 7.9 7036 S 7036 MALL@ MILLENIA Gap US GAP                             4200 CONROY RD ORLANDO FL 32839
3 11.8 4405 S 4405 PARK AVE-WINTER PARK Gap US GAP                             400 PARK AVENUE WINTER PARK FL 32789
4 16.7 4401 S 4401 ALTAMONTE Gap US GAP                             451 E ALTAMONTE DR ALTAMONTE SPRINGS FL 32701
5 26.1 9357 S 9357 SEMINOLE T/C Gap US GAP                             140 Towne Center Circle SANFORD FL 32771
6 26.1 4407 S 4407 SEMINOLE T/C Gap US GAP                             136 Towne Center Circle SANFORD FL 32771
7 46.2 4015 S 4015 LAKELAND SQUARE Gap US GAP                             3800 US Highway 98 North LAKELAND FL 33809
8 47.4 6343 S 6343 MELBOURNE SQUARE Gap US GAP                             1700 W New Haven Avenue MELBOURNE FL 32904
9 55.1 4601 S 4601 VOLUSIA Gap US GAP                             1700 W International Speedway Blvd DAYTONA BEACH FL 32114
10 70.2 4011 S 4011 BRANDON T/C Gap US GAP                             420 BRANDON TOWN CENTER MALLBRANDON FL 33511
11 72.3 4410 S 4410 PADDOCK Gap US GAP                             3100 SW COLLEGE RD OCALA FL 34474
12 75.8 6336 S 6336 INDIAN RIVER Gap US GAP                             6200 20TH STREET VERO BEACH FL 32966
13 80.2 4014 S 4014 CITRUS PARK T/C Gap US GAP                             7964 CITRUS PARK TOWN CENTER TAMPA
MALL FL 33625
14 80.8 4003 S 4003 WEST SHORE PLAZA Gap US GAP                             288 WESTSHORE PLAZA TAMPA FL 33609
15 85.2 4008 S 4008 GULF VIEW SQUARE Gap US GAP                             9409 US HIGHWAY 19 PORT RICHEY FL 34668
16 90.8 4004 S 4004 COUNTRYSIDE Gap US GAP                             27001 US HIGHWAY 19 N CLEARWATER FL 33761
17 90.8 9730 S 9730 COUNTRYSIDE Gap US GAP                             27001 US HIGHWAY 19 N CLEARWATER FL 33761
18 96.8 4012 S 4012 TYRONE SQUARE Gap US GAP                             6901 22ND AVE N ST. PETERSBURG FL 33710
19 96.8 9408 S 9408 TYRONE SQUARE Gap US GAP                             6901 22ND AVE N ST. PETERSBURG FL 33710
20 104.0 6318 S 6318 TREASURE COAST SQ Gap US GAP                             3444 NW FEDERAL HWY JENSEN BEACH FL 34957
21 107.5 4013 S 4013 SOUTHGATE PLAZA Gap US GAP                             3501 S TAMIAMI TRL SARASOTA FL 34239
22 107.5 4320 S 4320 OAKS (THE) - FL Gap US GAP                             6655 W NEWBERRY RD GAINESVILLE FL 32605
23 109.6 4002 S 4002 SARASOTA SQUARE Gap US GAP                             8201 S TAMIAMI TRAIL SARASOTA FL 34238
24 121.9 9729 S 9729 AVENUES (THE) Gap US GAP                             10300 SOUTHSIDE BLVD JACKSONVILLE FL 32256
25 122.0 4304 S 4304 AVENUES (THE) Gap US GAP                             10300 SOUTHSIDE BLVD JACKSONVILLE FL 32256
26 123.9 4302 S 4302 ORANGE PARK Gap US GAP                             1910 WELLS RD. ORANGE PARK FL 32073
27 126.9 669 S 0669 ST. JOHN'S T/C Gap US GAP                             4711 River City Drive JACKSONVILLE FL 32246
28 126.9 9517 S 9517 ST. JOHN'S T/C Gap US GAP                             4712 River City Drive JACKSONVILLE FL 32246

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  Shortage
2006 % of 2005 % of 2005 Target/
 Shortage Rate Cost 2006 Shortage EIS Bad Agents
Cost of Cost of Shortage Cap Tier Non-
'06 v. '05 '06 v. '05 Cost Index Debt (Aug '06)
Sales Sales Cost Index Target
B / (W) ppt B / (W)
(0.12) $ (995) (1.46) $ (30,744) (1.35) $ (29,749) 499 315 $ 5,660 2 - N
2.47 $ 83,723 (2.36) $ (95,517) (4.83) $ (179,240) 554 909 $ 6,728 5 - T
0.96 $ 9,058 (1.42) $ (22,243) (2.38) $ (31,301) 463 11 $ 1,548 2 - N
(1.24) $ (23,845) (2.27) $ (37,883) (1.03) $ (14,038) 206 169 $ 5,096 1 - N
0.87 $ 2,858 (0.63) $ (2,410) (1.50) $ (5,268) 238 - $ 1,406 1 - N
1.59 $ 10,665 (2.14) $ (15,284) (3.73) $ (25,949) 228 176 $ 2,753 2 - N
0.99 $ 6,485 (0.71) $ (4,863) (1.70) $ (11,348) 342 10 $ 3,856 1 - N
0.33 $ 3,174 (1.16) $ (13,233) (1.50) $ (16,407) 162 93 $ 1,335 1 - N
(0.40) $ (3,730) (2.81) $ (20,892) (2.41) $ (17,162) 492 - $ 1,640 2 - N
1.13 $ 18,172 (2.39) $ (40,321) (3.52) $ (58,493) 149 164 $ 1,147 3 - N
2.34 $ 22,364 (1.46) $ (16,593) (3.80) $ (38,957) 420 144 $ 3,599 3 - N
1.46 $ 15,444 (1.84) $ (18,084) (3.31) $ (33,528) 284 107 $ 629 2 - N
0.26 $ 4,199 (1.72) $ (32,400) (1.97) $ (36,599) 62 90 $ 1,639 1 - N
0.24 $ 1,762 (3.28) $ (43,008) (3.52) $ (44,770) 607 139 $ 1,089 4 - N
2.05 $ 13,190 (1.07) $ (7,186) (3.12) $ (20,376) 56 133 $ 4,983 1 - N
0.29 $ 3,979 (1.24) $ (19,033) (1.53) $ (23,012) 116 105 $ 3,872 1 - N
(0.08) $ (1,247) (1.16) $ (7,701) (1.08) $ (6,454) 116 - $ 3,907 1 - N
2.01 $ 25,100 (2.77) $ (30,745) (4.78) $ (55,845) 345 504 $ 7,718 4 - N
(0.92) $ (4,423) (1.96) $ (9,317) (1.03) $ (4,894) 345 - $ 71 1 - N
0.80 $ 9,471 (2.03) $ (27,760) (2.83) $ (37,231) 109 249 $ 914 2 - N
1.27 $ 16,625 (2.24) $ (33,347) (3.51) $ (49,972) 159 134 $ 503 2 - N
1.66 $ 22,737 (1.51) $ (22,299) (3.17) $ (45,036) 276 72 $ 2,231 2 - N
0.33 $ 2,196 (0.60) $ (4,436) (0.94) $ (6,632) 29 48 $ 3,859 1 - N
0.87 $ 6,237 (1.60) $ (12,392) (2.46) $ (18,629) 113 - $ 1,300 1 - N
(0.83) $ (6,748) (2.02) $ (31,191) (1.19) $ (24,443) 108 24 $ 1,502 1 - N
2.03 $ 19,706 (4.04) $ (39,433) (6.07) $ (59,139) 71 167 $ 1,406 3 - N
0.54 $ 9,068 0.54 $ 9,068 - $ - 0 6 $ 20 1 - N
(1.02) $ (10,422) (1.02) $ (10,422) - $ - 0 - $ (5) 1 - N
20
21
22
23
 Ghana & Nigeria Orders: High Fraud Rate

ALL ORDERS
from Ghana & Nigeria

Cancelled
shipped
due to fraud

potential
labor
savings
shipped & opportunity
shipped & “legit” shipped & returned (secondary)
charged back

later
“legit” potential reduction
charged back*
in charge backs
opportunity

By targeting orders from Nigeria and Ghana, our Total Fraudulent Orders from
exposure to potentially cancelling “legit” orders and Ghana & Nigeria
decreasing satisfaction of “legit” customers is ~ 97%
relatively low. *charged back & cancelled
25
 LP Data Transformation
Reporting Analysis Intelligence Targeted Intelligence

• Business rules
driven
• Single version
of truth • Actionable, real-
• Trending
time data
• Raw Data analysis • Dashboard
• Alert notification
• Multiple • Basic reporting • Performance
down to associate
sources Metrics
• Shows general level
• Actual vs direction • Business logic
• Directs resources
Budget driven
to root cause
• Non-actionable • Predictive Model

LOW Strategic Value HIGH

26
 LP’s Seat at the Table
• Traditional security viewpoint or business
partner
• Engagement in all aspects of business
• LP alignment with Company vision and
strategies
• Accurate and objective information that provides
visibility across all business functions

27
 Thank You
Cynthia Malizia – Blockbuster Inc
Dan Shaw – Gap Inc

Questions & Answers

28