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8 Ways To Use Customer Insights To Improve Business Performance

Table of contentsAnalyzing The Omnichannel Customer Journey...................................................................... 4

Big Data, Big Analytics, Big Pictures In Retail......................................................................... 5

Conclusion.................................................................................................................................... 18

About Retail TouchPoints............................................................................................................ 19

About SAS..................................................................................................................................... 19

8 Ways High Performance Retailing Can Improve Retail Businesses................................. 7

Attract New Customers And Keep Them....................................................................... 7

Improve Merchandising..................................................................................................... 8

9Implement More Efficient Replenishment And Allocation............................................

Optimize Inventory.............................................................................................................. 10

Enhance The In-Store Shopping Experience And Maximize Selling Space............. 11

Monetize Marketing Decisions......................................................................................... 12

Incorporate Social Media Into The Cross-Channel Communication Mix.................. 13

Identify The Best Customers............................................................................................ 16

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8 Ways To Use Customer Insights To Improve Business Performance

business performance through the best of retail domain

expertise and superior analytics, coupled with the latest high

performance computing capabilities. With these solutions in

place, many retailers are empowering store associates and

localizing inventory in order to improve customer satisfaction,

achieve greater efficiencies and grow basket size.

Using retail analytics, for example, Brooks Brothers

was able to reduce inventory by 27% and cut down the

average weeks of supply on hand by seven; Staples

saw a 137% response rate; and Macys.com has

saved approximately $500,000 in labor costs.

This E-book reviews best practices of retailers who know their

customers better and translate that insight into decisions to drive

better results and innovations, while forming a foundation to

ward off the “Tech Titans” who are entering retail these days.

The tables have turned on today’s retailers. Many shoppers

may never set foot in a brick-and-mortar store before

making a purchase. And when they do enter a store, they

possess competitive data on price and product detail.

So how does this new era of retail change the way

retailers market and sell to consumers? Merchants

must now be able to paint a picture of each customer

and create a personalized shopping journey. To

that end, advanced customer analytics is key.

Companies across industries — grocery, apparel, mass

merchandise and specialty, including Sobey’s, Macys.com,

Chico’s, 1800FLOWERS, Staples and Brooks Brothers

— are making strides by identifying their best customers

using high performance customer intelligence and analytics

solutions. High performance retailing drives superior

Companies across industries — grocery, apparel, mass merchandise and specialty, including Sobey’s, Macys.com, Chico’s, 1800FLOWERS, Staples and Brooks Brothers — are making strides by identifying their best customers using high performance customer intelligence and analytics solutions.

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8 Ways To Use Customer Insights To Improve Business Performance

said Larry Freed, President and CEO of ForeSee Results,

an industry research organization. “Retailers must extend

data collection to all channels and devices to combine

behavioral data along with demographics and feedback

gathered online and in stores. It is critical that they collect

the ‘right’ data then analyze it zealously to deliver the most

relevant messaging to today’s cross-channel customers.”

By consistently collecting customer feedback and

interactions across channels, retailers will be equipped with

the resources to better micro-segment their audiences

and even tailor offers to specific customers, added

Alison Paul, Retail Sector Leader for Deloitte LLP.

“Analytics is the source of insight that enables retailers to

understand who customers are, what they like, when they shop,

and their responses to specific offers and promotions,” Paul

said. “When combined with additional quantitative research,

merchants can better identify why customers behave like they

do.” Collectively, these capabilities enable retailers to target

customers with relevant, timely and highly targeted campaigns,

she said, that will increase response, sentiment and loyalty.

Analyzing The Omnichannel Customer Journey There’s no turning back to the time when retailers drove the

shopping experience. The shoppers are now in charge, they are

eager to share their desires with merchants, and they expect

their wants and needs to be met in real time. In order to attract

and retain today’s demanding shoppers, retailers must respond

appropriately to customer buying behavior across all channels.

The proliferation of technologies and communication

channels has created unique challenges for merchants

seeking to reach the household decision-makers effectively.

More leading retailers are turning to advanced analytics in

order to grasp the complexities of customer behavior.

“To create relevant marketing messages, offers and

campaigns, retailers today need to truly comprehend their

customers’ behaviors, but they can’t without analytics,”

“To create relevant marketing messages, offers and campaigns, retailers today need to truly comprehend their customers’ behaviors, but they can’t without analytics.”

-Larry Freed,

ForeSee Results

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8 Ways To Use Customer Insights To Improve Business Performance

Merchants should seek to create real-time offers based

on consumers’ browsing and buying histories, geographic

locations, and personal styles and preferences. “Customers

like and expect to be understood,” Paul stressed. “The

greater the personalization, the more likely they will feel

special and appreciative of retailers’ marketing efforts.”

This strategy is especially effective when personalized offers are

sent directly to shoppers’ mobile devices. “There’s no denying

the fact that consumers are becoming more tech-savvy and

want more knowledge and information at the point of decision-

making,” said Kasey Lobaugh, Direct-to-Consumer and Retail

Multichannel Leader at Deloitte Consulting LLP. Retailers

currently are working to implement mobile coupons, specials

and personalized promotions. “Only 20% [of respondents] offer

this ability today, but another 52% plan to implement these

services in the next two years,” Lobaugh added. The more

data that brands and retailers can collect about customers,

the more information they have to leverage in personalizing the

entire brand experience. However, in order to achieve these

more relevant omnichannel marketing campaigns, retailers

must make data collection and analysis a top priority.

Big Data, Big Analytics, Big Pictures In RetailNow aware of the new customer needs and demands,

retailers must respond with a more sophisticated approach to

marketing, personalization, pricing and inventory optimization.

High performance Retailing provides the in-database and in-

memory analytics needed to implement advanced strategies.

In-Database Analytics moves the decision-making

capabilities closer to all the data. As soon as POS information

is imported, the results are scored inside the database. In-Memory Analytics allows the data and analytics to run

together simultaneously. In a large department store with

millions of SKUs, this type of analysis took hours, but with

In-Memory Analytics the data is delivered in real time.

“Customers like and expect to be understood. The greater the personalization, the more likely they will feel and appreciative of retailers’ marketing efforts.”

-Alison Paul, Deloitte LLP

8 Ways To Use Customer Insights To Improve Business Performance

With high performance analytics, merchants can access

customer metrics in real time and integrate that information

with their traditional data in order to make more informed

decisions. They should have access not only to general sales

and margin KPIs, but also which customer segments shop

the category, how much each customer segment spends

and how often they buy. With customer data at the point of

decision, merchants can now view advanced customer metrics

lined up alongside traditional product movement metrics.

“The speed of the information, the knowledge of these

businesses is what truly differentiates company A from

company B,” said Eric Williams, Executive Vice President

and Chief Information Officer (recently retired), Catalina

Marketing. “If they don’t have the analytical tools to

evaluate the data, they face a significant disadvantage.

High performance analytics provides a true combination

of all marketing, promotions and merchandising teams

now reacting to changing trends in the marketplace.”

“Category managers and merchants need actionable

customer insights at the point of decision to improve

assortment, pricing and promotions,” said Wanda Shive,

Retail Product Manager, SAS Institute. For many retailers,

customer data remains primarily accessible to the marketing

department. Integration of customer metrics into merchandising

systems is limited at best. Category managers and merchants

must have shopper insights at their fingertips to enable

customer data-driven decisions that lead to relative, targeted

communications and customer-centric promotions.”

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8 Ways To Use Customer Insights To Improve Business Performance

Wal-Mart, the world’s largest retail, who believes the customer

is number one, has embraced advanced analytics to make

smart choices, employing SAS analytics in many facets of

the business. At Wal-Mart, executives shared their insights

in a discussion titled: Analytics at Work in Wal-Mart. Cindy

Davis, Executive Vice President of Global Customer Insights,

challenged the audience to help her understand what she

refers to as “insight logistics” — in other words: “What is

it going to take to understand the data we have, and how

do we infuse those insights into the decision making?”

1. Attract New Customers And Keep Them

Reacting to shopper behavior is a key element in the battle for

attracting and retaining customers. In many cases the larger

retailers may want to look to the smaller, private, more nimble

merchants for guidance. Smaller companies often have an

advantage in this fight, since they do not have to worry about

pleasing Wall Street. They are able to take more of a risk. But

in reality, all retailers must find effective ways to meet

customers’ demands.

“Communicating with customers in relevant ways is key

to maintaining and growing wallet share,” noted Shive.

“Retailers must pay attention to customer behavior and

make relevant offers that reinforce values that are important

to each individual customer. Doing so makes customers

think twice before switching to another retailer or brand.”

“Retailers must pay attention to customer behavior and make relevant offers that reinforce values that are important to each individual customer. Doing so makes customers think twice before switching to another retailer or brand.”

-Wanda Shive, SAS

At 1800FLOWERS.COM, SAS provides an integrated data foundation that dramatically reduces the time it takes to perform analysis and share results.

8 Ways High Performance Retailing Can Improve Retail Businesses

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8 Ways To Use Customer Insights To Improve Business Performance

2. Improve Merchandising With customer segment metrics in hand, retailers

can adjust their merchandise assortments to appeal to

specific shoppers of the category. Using purchase history,

merchants can determine how adjusting the size of a particular

product section could impact their key customer segments.

Using SAS Merchandise Data Integration, 7,000-store Family

Dollar has been able to improve same-store sales, reduce

inventory, enable a more efficient supply chain and create

more tailored planning based on customer demographics.

“SAS enables the Family Dollar merchan dising organization to

quickly create integrated merchandise financial plans we can

share and adjust collaboratively on an almost real-time basis,”

said Scott Zucker, Vice President of IT Solutions Delivery.

In the example of Harris Teeter, Shive explained, “Their go-

to business strategy includes a deeper selection, greater

variety, and a focus on finer foods.” Efficient localized

assortments require that merchants consider customer metrics

for each market. If a key customer segment purchases a

Davis concluded her thoughts with the following: “I have

a dream. I dream that every executive who gets up at

4:30 in the morning to check the product sales numbers

[will] get up and first check the customer metrics. The

company that does that will be unstoppable. “

At 1800FLOWERS.COM, SAS helps the company uncover

customer insights, drive new revenue ideas and predict what

customers will want — then target campaigns to fill those

needs. An integrated data foundation dramatically reduces the

time it takes to perform analysis and share results. Instead of

analyzing sales and customer service information after a major

holiday, for instance, the company can see what’s happening

in real time and adjust its Web site offerings accordingly.

“Before SAS, our peak time would be over and then you’d have

to apply the results to the next holiday. Now we can do it in real

time, and it enhances the customer experience,’’ says Nachiket

Desai, Vice President of Enterprise Architecture and Business

Intelligence. “The SAS Analytics platform essentially brings all

these different data points into a single matrix so people can

access all the data without depending on IT to provide extracts.’’

“SAS enables the Family Dollar merchan dising organization to quickly create integrated merchandise financial plans we can share and adjust collaboratively on an almost real-time basis,” said Scott Zucker, Vice President of IT Solutions Delivery.

8 Ways To Use Customer Insights To Improve Business Performance

particular product in one market, but not in a similar location

elsewhere, making a decision to remove the product from

all locations could result in dissatisfied customers.

Merchandising also comes into play when determining the

choice of products for promotions and advertising. Traditionally,

product sales, margin and unit movement were the primary

measures used to determine which items to feature on the

front page of a circular. With high performance customer

analytics in place, that same decision can be made based

on customers’ transaction-level purchase histories.

“Retailers can look beyond the unit sales increase of

the product on the front page of the circular,” noted

Shive. “They can measure the growth of the total basket

of shoppers.” Understanding effects of promotions on

shopper basket size is critical given it’s on the decline.”

In 2010, approximately 25% of retail survey respondents

reported an average of two units sold per transaction, according

to the NRF in its 2012 Retail Horizons report. In 2011, that

number doubled to 56%, “suggesting that low-volume

purchases may be part of a longer-term trend,” NRF noted.

3. Implement More Efficient Replenishment And Allocation

In order to have the right products available in the right place

at the right time, merchants need access to an accurate, real-

time view of sales and demand. Brooks Brothers empowers

store managers and vendors to better manage the business

with advanced analytics. Store managers receive key reports,

provided through SAS, to help them find opportunities to

improve store performance and customer satisfaction. The

retailer also collaborates with vendor partners, providing

sales and demand data in order to ensure delivery of the

right merchandise in the right stores at the right time.

“Using SAS, we can give our vendors a more accurate view

into projected sales and demand,” explained Dave Donovan,

Manager of Business Intelligence at Brooks Brothers. “This has

really improved service levels, and it’s benefited both sides of the

supply chain.

“Using SAS, we can give our vendors a more accurate view into projected sales and demand,” explained Dave Donovan, Manager of Business Intelligence at Brooks Brothers. “This has really improved service levels, and it’s benefited both sides of the supply chain.”

-Dave Donovan,

Brooks Brothers

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At Brooks Brothers, SAS solutions empower store managers and vendors to better manage the business with advanced analytics. Store managers receive key reports to help them find opportunities to improve store performance and customer satisfaction.

8 Ways To Use Customer Insights To Improve Business Performance

SAS provides a common sales forecast to allocation

and replenishment teams and systems.” This

eliminates discrepancies between systems that

could lead to under-stocks and overstocks.

“There are no surprises for our vendors,” added Donovan.

“They have a pretty good view of what they’ll be delivering

by week or month.” With this system in place the company

was able to reduce inventory by 27% and cut down

the average weeks of supply on hand by seven.

4. Optimize Inventory With high performance analytics, “the speed

of information is allowing retailers to make decisions

very quickly — that’s why we’re seeing these changes in

stores,” said Williams. He highlighted Publix, GreenWise,

Whole Foods and Wegmans as examples in grocery that

have used information gleaned from the analytical data to

understand shoppers’ interest levels in certain products

and build assortments to meet those needs and desires.

Knowing the specific items shoppers are interested in, retailers

now are able to alert those shoppers of specials at a moment’s

notice. For example, “Some are sending text messages at

3pm to let consumers know a certain product will be available

in the prepared service areas for dinner,” Williams noted.

Different industries have advanced down the path of advanced

analytics slower or faster than others, Williams added. “The

grocery guys are relatively midway down the timeline; several

I’d argue, such as Kroger and Safeway, are significantly further

down the line. The specialty retail businesses are in the early

days. Many are still purchasing based on volume of sales of

product. They haven’t yet really looked at individual purchases.

Mass merchants such as Target and Wal-Mart are doing it.“

Grocers and mass merchants, in particular, are uniquely

challenged because of the volume of data coming in.

Wegmans sells approximately 90,000 SKUs. That is where

high performance comes into play…because of the high

volume of information that needs to be analyzed.

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8 Ways To Use Customer Insights To Improve Business Performance

respond to requests for a more customized approach. “These

are big companies that are fairly set in how they distribute their

product.” But today 90% of DSW’s partner shoe companies are

using the customized pack recommendations. The result? “Our

out-of-stocks are fewer, our markdowns are fewer and our

margins are higher — which, at the end of the day, is what every

retailer wants,” Mustafa noted. “We were looking for a robust

solution that was simple to use, and that’s what we are seeing.’’

5. Enhance The In-Store Shopping Experience And Maximize Selling Space

Using high performance analytics to improve the

everyday shopping experience for individual consumers

can be accomplished through a logical progression of

steps. Those steps could include questions such as:

What is our best-selling item in each store? What is the

highest corollary item with the best-selling item in store?

Not just the second item, the highest corollary.

This approach makes a difference when promoting cross-sell

With 1,300 stores across Canada, for example, Sobey’s is

using SAS for grocery analytics to help deliver on its commit-

ment to offer the right products, in the right stores, across

multiple banners, for each individual market it serves.

“Customer insight and intimacy is one of Sobey’s strategic

pillars,” said Clinton Keay, Senior Vice President and Chief

Information Officer. “With SAS Analytics we can understand

who our key customers are, as well as understand the

different types of customers we have by individual market.

We’re a locally driven organization, with resources dedicated

to providing customer service that is tailored to the markets

they serve. Unless you can get it down to the operations of

the individual store level, it’s not going to add any value.”

DSW (Designer Shoe Warehouse) has implemented SAS Size

Optimization in order to improve the efficiency of size and style

offerings in its 350+ stores across the U.S. DSW has had great

success convincing suppliers to work with the new solution,

according to Harris Mustafa, EVP of Supply Chain Merchandise

Planning and Allocation. In some cases, suppliers managed

the size packs, so Mustafa was not certain how they would

With 1,300 stores across Canada, Sobey’s is using SAS for grocery analytics to help deliver on its commit-ment to offer the right products, in the right stores, across multiple banners, for each individual market it serves.

“With SAS Analytics we can understand who our key customers are, as well as understand the different types of customers we have by individual market.”

-Clinton Keay,

Sobey’s

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8 Ways To Use Customer Insights To Improve Business Performance

and merchandising performance in a matter of seconds in order

to create more effective displays.

6. Monetize Marketing Decisions

A number of retailers are realizing improved returns on marketing

investments with high performance analytics. While sending

out mailings to promote upcoming sales is a common practice,

the challenge is to customize the mailings in a way that truly

drives store business without spending too much time and

money. Brooks Brothers uses SAS to segment customers

and automate the customization process, achieving significant

savings on just that one aspect of the marketing campaign.

The company also uses SAS to figure out which types of

specials will work best. Does it make more sense to offer three

shirts for a discounted price? Or is two the number that will drive

revenue and profits? Should shirts and ties be marketed together

at a promotional price, or separately? “We’re doing some market

basket analysis,’’ said Donovan, adding that one of the goals

and upsell. “At the point you understand the nature of your

consumer, then you can reverse engineer based on the basket

data,” according to Williams.

A number of larger retailers have begun employing this strategy,

including mass merchandisers. “They have been astounded

with the results,” Williams said. For example, he explained that

one retailer found out that the number-one selling women’s

apparel item in the store had a traditional consumer packaged

goods product associated with it as a second corollary — the

Keurig K Cups. The retailer began merchandising the two

items next to each other and boosted sales of both items.

The reason more retailers may not be discovering these

correlations, is that they continue to operate with siloed

data. The purchasing business unit is not conferring with the

merchandising teams. In the apparel/coffee example, the group

that buys women’s apparel has no interactions with the group

that purchases coffee. High performance analytics can alter that

scenario and motivate disparate business units to work together.

With High Performance Retailing, retailers can review inventory

“At the point you understand the nature of your consumer, then you can reverse engineer based on the basket data.”

-Eric Williams,

Catalina Marketing (retired)

8 Ways To Use Customer Insights To Improve Business Performance

others monthly — that are sent to employees in marketing and

finance. These data-rich reports were taking analysts four

to 12 hours to produce — much of it busy work that involved

cutting and pasting from Excel spreadsheets. Macys.com is

now using SAS to automate the reports. “This cuts the time

dramatically,” said Kerem Tomak, Vice President of Analytics.

“It saves us more than $500,000 a year in terms of comp FTE

hours saved — a really big impact,’’ Tomak said, noting that the

savings began within about three months of installing SAS.

7. Incorporate Social Media Into The Cross-Channel Communication Mix

Best-in-class merchants are incorporating feedback and

comments from social channels to create a cohesive cross-

channel brand experience for shoppers. These merchants

typically use the most common channels — Facebook and

Twitter — to access web site browsing history and store

check-ins via mobile geo-targeting applications such as

foursquare and Shopkick.

is to engage individual stores in determining what works. “We

don’t want this information locked in the back office. We want

the store managers to start cultivating their analytical skills.’’

Instead of sending costly mass mailings to every zip code

within a 120-mile radius of a store, Cabela’s uses SAS to

focus its marketing efforts in the geographies of customers

most likely to generate the greatest possible incremental

sales, resulting in a 60% increase in response rates.

Cabela’s can identify the customer’s favorite channel and

selectively send related marketing materials. “Does the customer

like the 100-page cata logs or the 1,500-page catalogs?’’ asked

Corey Bergstrom, Director, Marketing Research and Analytics.

“The customer tells us this through his past interactions so

we can send the catalog that matches his or her needs.

SAS gives Cabela’s the power to conceivably personalize

a unique marketing message, flyer or catalog to every

customer. The only limitation is the creation of each piece.”

At Macy’s, the Analytics team is responsible for creating a

variety of mission-critical reports — some daily, some weekly,

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By automating reports, Macy’s cuts costs by “more than $500,000 a year in terms of comp FTE hours saved — a really big impact.”

-Kerem Tomak,

Macy’s

At Macy’s, SAS Analytics has helped automate the creation of a variety of mission-critical reports — some daily, some weekly, others monthly — that are sent to employees in marketing and finance.

8 Ways To Use Customer Insights To Improve Business Performance

Furthermore, 29% of men and 30% of women share feedback

with their social graphs regarding brand items or experiences.

To better keep pace with a constant stream of customer

feedback and other insights on social networks, the Aberdeen

report indicated that retailers are investing more in predictive

analytics (45%) and real-time data integration (32%) tools that

offer real-time insights into customer wants and needs.

With many different businesses and verticals within Gilt

Groupe, the company sought to ensure that cross-promotion

in the most effective and efficient way, according to Tamara

Gruzbarg, Director of Analytics. When the company launched

its Home division, Gilt used SAS to build a predictive model

to identify the key characteristics of women shoppers who

are likely to shop Home as well. “Once we identified the

target audience, we sent an email with a specific offer — in

this case, 10% off their order from Gilt Home,” Gruzbarg

explained. “We increased conversion on the Home tab from

this target audience by almost 100% and saw an immediate

and very positive incremental return on investment as well.”

Then they can use high performance analytics to combine

that data with loyalty program accounts and transactional

information. As a result, these organizations are making

smarter marketing decisions with messages and offers

that will directly address specific customer segments.

“If you’re not playing in social you will be dead soon,”

said Williams. “People can destroy a brand these days

with comments.”

As many as 85% of organizations believe social media and other

customer sentiment information is critical to their efforts to tackle

Big Data, according to The Aberdeen Group research brief,

titled: The State Of Big Data. In addition, 83% of companies

worldwide are finding value in collecting clickstream data.

Social media sites alone have greatly altered how consumers

interact and follow their favorite brands. Facebook, Instagram,

Twitter and other social networking sites also are influencing how

often and quickly shoppers share feedback. A study from Burst

Media, titled: Online Insights: Let’s Get Social indicated that

nearly 50% of consumers frequently or occasionally “Like” and

follow brand-name products or services on Facebook, Twitter

and other social media.

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29% of men and 30% of women share feedback with their social graphs regarding brand items or experiences.

-Burst Media,

Online Insights study

8 Ways To Use Customer Insights To Improve Business Performance

Prantner continued: “Take a Facebook ad. If we get a spike

in new fans or ‘likes’ the first day, we’re able to judge the

long-lasting impact and predict how it will trail off in the

future. When doing PR activities like events, we can use

the same model to judge the success of that event not

just based on that day, but on the long-term impact of the

event. For any campaign, based on what the overall goals

are, you can use these measures to course-correct.”

Organic also uses SAS to measure interactive and social

media sentiment. “If you’re able to measure your imprint and

your Web traffic, you’re able to capture that for computation

as well through social sites,” Prantner explained. “Essentially,

clients can see how they’re gaining or losing compared to

competitors. If your competitor had a market increase this

month, we can see which social metrics are driving that.”

• Overall, as a result of better segmentation through

analytics, Gilt Groupe has achieved the following results:

• A 10% to 20% lift for customers browsing

in new merchandise categories;

• A 100% lift for women who shopped at the

men’s site but had not yet purchased; and

• A 20% increase in new member conversion rates.

Following the implementation of social media analytics tools

from SAS, Organic, Inc. is able to use sentiment analysis

and velocity and acceleration calculations to create digital

marketing strategies for its retail clients. Jonathan Prantner,

Manager of Statistics for Organic explained how the solution

works: “It looks at the rates of change in how your social

media imprint is growing. At the point when you examine

results and you’re able to see spikes in your increase, you

look at the cumulative social imprint and look at first and

second derivatives. When we see the spike, we’re able

to relate the height of that spike to the ceiling that you’ll

eventually see from that spike further on down the line.”

15

“Take a Facebook ad. If we get a spike in new fans or ‘likes’ the first day, we’re able to judge the long-lasting impact and predict how it will trail off in the future.”

-Jonathan Prantner,

Organic, Inc.

Following the implementation of social media analytics tools from SAS, Organic, Inc. is able to use sentiment analysis and velocity and acceleration calculations to create digital marketing strategies for its retail clients.

8 Ways To Use Customer Insights To Improve Business Performance

“We’re tailoring offers directly to shoppers based on their

purchase histories, which has increased the effectiveness of

communications sent out by the marketing department,” added

Dave Eddy, Director of Decision Support Systems at Sobeys.

High Performance Analytics: Next StepsWhile a number of retail companies are investing in high

performance analytics, many more continue to struggle with

leveraging customer data. “When talking with grocery CEOs

across the world, few routinely discuss customer metrics,”

noted Shive. “It is a customer data-rich industry, but most

executives remain primarily focused on traditional KPIs. For

them, it’s still all about the movement of product. They talk

about sales and gross margin, but customer metrics are not on

the tips of their tongues. Few mention how they manage key

results by customer segment to transform decisions across

their organizations.” The advancement of high performance

analytics enables retailers to incorporate customer insights into

all strategic decisions.

8. Identify The Best Customers

Being able to break down the data into individual

chunks now allows retailers to better identify

their best customers at any given time.

ü As a general rule, best customers

meet the following criteria:

ü Spend the most each year

ü Visit most frequently

ü Buy higher-margin items

ü Purchase from more departments and categories

ü Post the lowest defection rates

At Sobeys, for example, “Customer insight allows

Sobeys to recognize loyal shoppers, and helps us

provide better offerings to our custom ers so that they’re

happy with their shopping experience,” said Keay.

“Senior management has to agree to transition business into an information-driven organization and compensate based on attributes of consumer, not the product. Analytics is then a critical component.”

-Eric Williams,

Catalina Marketing (retired)

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8 Ways To Use Customer Insights To Improve Business Performance

To move forward and reap the benefits of high performance

analytics, retailers should take the following steps:

1. Asses the status of all data currently being collected throughout the organization;

2. Confirm the identity of the brand’s most valuable target shoppers;

3. Use analytics to monitor the customer journey;

4. Prioritize the business processes that warrant the quickest improvement;

5. Formulate a go-forward business improvement strategy, taking advantage of insights gleaned from high performance analytics;

6. Test and learn;

7. Move forward with strategic implementations;

8. Use high performance analytics to evaluate the success of implementations, in real time; and

9. Make relevant changes, based on analytical data.

Williams concurs. “Management has to come into play —

they need analytics that cross the business groups. People

truly changing retail are looking at the consumer. It used to

be that product was king — now the consumer is queen.”

He continued, “Senior management has to agree to

transition business into an information-driven organization

and compensate based on attributes of consumer, not the

product. Analytics is then a critical component. What I am

finding is that people think that if they put together an analytics

organization, hire PhDs…if they don’t address the true

structure and operational aspects of their business, it will fail.

Operational piece and data piece must be done in logical and

methodical process into the business. It’s not rocket science.

Data doesn’t get used unless operational processes change.”

“It is never too early to start with analytics, even if you don’t have full-blown capabilities right away.”

-Tamara Gruzbarg,

Gilt Groupe

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8 Ways To Use Customer Insights To Improve Business Performance

For other companies to get started down this path of

success, they must embrace the need for advanced

analytics from the top down. Executives at the C-level

must realize the value of moving from a product-centered

organization to a customer-centric organization. Then

the rest of the puzzle pieces will fall into place.

“It is never too early to start with analytics, even if you don’t

have full-blown capabilities right away,” said Gilt Groupe’s

Gruzbarg. “Simple segmentation based on one or two key

variables, implemented at the right time, could go a long way in

helping to move the business forward. Those initial insights can

then be incorporated into future comprehensive strategies.”

ConclusionThe time is now for advanced, high performance analytics

to come to the forefront in order to help retailers in all

industries reach and retain loyal shoppers. With individualized

customer metrics in hand, merchants can enhance the

in-store shopping experience, improve merchandising,

optimize inventory and monetize key marketing decisions.

High performance analytics also can help bring vital

social data into the mix, providing a well-rounded view of

omnichannel customer sentiment. With an overall view of

the shopper, merchants can measure their best customers

and deliver strategies based on that valuable information.

Today, companies like Macy’s, Cabela’s, Brooks Brothers,

1800FLOWERS and Chico’s are seeing significant results

with their analytics strategies. They are improving all aspects

of their businesses while delighting individual shoppers.

19

8 Ways To Use Customer Insights To Improve Business Performance

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About SASSAS helps retailers and grocers spend less time crunching numbers and more time

growing revenue with key technologies customized for today’s multichannel merchants.

Built around a powerful core of market-leading business analytics, our comprehensive suite

of retail solutions tackles the industry’s greatest challenges, including customer insight

(customer intelligence and social media analytics); price optimization (regular, promotion and

markdown); size optimization (size profiling and pack optimization); assortment planning;

integrated merchandise planning (allocation, space management and optimization);

forecasting (across the enterprise and across market segments); and loss prevention.

With more than 35 years of experience working with leading grocers and retailers, SAS

helps retailers make better decisions faster. Learn more at www.sas.com/retail.

About Retail TouchPointsRetail TouchPoints is an online publishing network for retail executives, with content focused on

optimizing the customer experience across all channels. Tapping into the power of the Web 2.0

environment, the Retail TouchPoints network is made up of a weekly e-newsletter, category-

specific blogs, twice monthly Special Reports, web seminars, benchmark research, virtual

events, and a content-rich web site at

www.retailtouchpoints.com.

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