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Macy's enhances its customers' online shopping experience, increases overall profitability

After more than 80 years in business, Macy's Inc. is one of America's most iconic retailers. With annual revenues exceeding $20 billion, Macy's enjoys a loyal base of customers who come to its stores and shop online each day. To continue its legacy of providing stellar customer service and the right selection of products, the retailer's e-commerce division – Macys.com – is using analytical software from SAS to better understand and enhance its customers' online shopping experience, while helping to increase the retailer's overall profitability.

To more effectively measure and understand the impact of its online marketing initiatives on Macy's store sales, Macys.com increased its analytical capabilities with SAS^® Enterprise Miner™, resulting in an e-mail subscription churn reduction of 20 percent. It also uses SAS to automate report generation, saving more than $500,000 a year in comp analyst time.

Ending "one size fits all" email marketing

"We want to understand customer lifetime value," explains Kerem Tomak, Vice President of Analytics for Macys.com. "We want to understand how long our customers have been with us, how often an email from us triggers a visit to our site. This helps us better understand who our best customers are and how engaged they are with us. (With that knowledge) we can give our valuable customers the right promotions in order to serve them the best way possible.

"Customers share a lot of information with us – their likes and dislikes – and our task is to support them in return for their loyalty by providing them with what they want, instantly,'' adds Tomak. Macys.com uses Hadoop as a data platform for SAS Enterprise Miner.

Initially, Tomak was worried that segmenting customers and sending fewer, but more specific emails would reduce traffic to the website. “The general belief was that we had to blast everyone,’’ Tomak said. Today, emails are sent less frequently, but with more thought, and the retailer has reduced subscription churn rate by approximately 20 percent.

 

Time savings, lower costs

Tomak's group is responsible for creating a variety of mission critical reports – some daily, some weekly, others monthly – that go to employees in marketing and finance. These data-rich reports were taking analysts four to twelve 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. It saves us more than $500,000 a year in terms of comp FTE hours saved – a really big impact,'' Tomak says, noting that the savings began within about three months of installing SAS.

Now his staff can maximize time spent on providing value-added analyses and insights to provide content, products and offers that guarantee a personalized shopping experience for Macys.com customers.

"Macy's is a very information-hungry organization, and requests for ad hoc reports come from all over the company. These streamlined systems eliminate error, guarantee accuracy and increase the speed with which we can address requests,'' Tomak says. "Each time we use the software, we find new ways of doing things, and we are more and more impressed by the speed at which it churns out data and models."

Moving forward

"With the extra time, the team has moved from being reactionary to proactive, meaning they can examine more data, spend quality time analyzing and become internal consultants who provide more insight behind the data," he says. "This will be important to supporting the strategy and driving the next generation of Macy's.com."

As competition increases in the online retailing world, Tomak says there is a push toward generating more accurate, real-time decisions about customer preferences. The ability to gain customer insight across channels is a critical part of improving customer satisfaction and revenues, and Macys.com uses SAS Enterprise Miner to validate and guide the site's cross- and up-sell offer algorithms.

Tomak is also training staff on SAS/OR^®, business process optimization software, to further optimize the promotions that the company sends to clients. "We want to maximize the efficiency in sending these promotions to the right customer at the right time.''