databasics; Mystery Shoppers - Todd & Holland Tea Merchants

American Demographics, Dec, 2000

There are several major software providers that are working with retailers to address this challenge, including SPSS (CustomerCentric), SAS Institute, and IBM (MerchantReach). Using a process called ETLM - which extracts, transports, loads, and manages a company's existing data stores into a single, comprehensive data warehouse - they can help provide a "360 degree" view of the customer. CustomerCentric, for example, then goes a step further and uses predictive modeling to understand a customer's shopping behavior and anticipate what they would like or want in the future.

Eddie Bauer is one major retailer that believes in integrating its channels. Using software and service from SAS, the apparel and outdoor-gear retailer created a channel-neutral data warehouse two years ago to unify customer data from its stores, catalogs, and Web sites. Using this data, the retailer is developing a segmentation program to personalize service and target appropriate marketing messages to different types of customers. The four distinct segments can be targeted with separate e-mail messages, Web site presentations, catalog layouts, and in-store displays.

"It takes data from all our channels in a customer-centric way, and it is applicable to all our channels. It's universal," says Michael Boyd, Eddie Bauer's director of CRM. Using only the data from either the Web site or the catalog would provide a skewed view of each customer, making it difficult to accurately categorize their shopping behavior and attitudes. The company has found that utilizing this segmentation system led to a 10 percent to 15 percent increase in spending for those shoppers who were targeted, according to Boyd.

Tracking customers across channels not only helps increase sales but can lead to reduced marketing costs by cutting unprofitable customers from target lists. Coldwater Creek, a Sandpoint, Idaho-based, multichannel retailer of women's apparel and jewelry, has been able to send more catalogs to its most profitable customers and fewer to its less profitable ones, thus reducing paper and postal costs. "These channels are different points on a triangle, but our multichannel strategy is one integral unit," says David Gunter, a spokesperson for Coldwater Creek. "It is really helpful to be able to see what percentage of a shopper's purchases come online and offline, and have a continuum of data on her, rather than separate silos."

Outside of targeted marketing, an integrated data warehouse allows customer service representatives to access purchase records in real time - regardless of where such purchases were made - and help resolve problems quickly and easily. Gift registries can be manipulated both online and in stores, and updated in real time as purchases are made - regardless of the channel. And automated replenishment services, such as for office supplies, can be manipulated and updated in a similar fashion.

One important barrier to full integration of retail data is the difficulty in collecting data in brick-and-mortar stores. "There is obviously a limit to what you can inflict on the customer in a store," says Anne Stern, a retail specialist at SPSS. A recent Jupiter study found that The Sports Authority and CVS pharmacy got less than 5 percent of their customers to identify themselves through direct requests at the register over a three-month period.