Cloud-Based Analytics Helps Maximize Profitability
By Bob Violino
The largest online retailer in the Netherlands, Wehkamp.ni, plans to use a new cloud-based merchandising analytics service to help it maximize profitability and improve inventory productivity for items that have entered the clearance process.
The retailer is now implementing the IBM DemandTec Markdown Optimization system, which is designed to help identify product markdown opportunities and make sure products are being sold efficiently. The offering is part of an array of IBM cloud services designed to help executives meet business objectives in concert with their organization's IT strategy.
Through other IBM offerings it's using, including Digital Analytics, LIVEmail, Campaign, and Customer Experience Management, Wehkamp.ni has experienced a 271 percent higher sales-per-send ratio for marketing emails, a 68 percent higher clickthrough rate and a 500 percent increase in the clickthrough rate for its banner ads.
With the addition of DemandTec Markdown, Wehkamp.ni expects to achieve similar benefits within its merchandising function.
By applying analytics in a cloud computing environment, Wehkamp.ni is able to deliver a more personalized shopping experience for its customers. The company can combine historical data and clickthrough rates to better understand consumer browsing and buying habits. With this insight, it can also more easily develop and change its marketing campaigns.
"We believe that being relevant to our customers is key," says Alexander van Slooten, marketing director of Wehkamp. "To stand out in all the messages that reach a customer, your message has to be relevant."
Focusing sales and marketing efforts on individuals has become a top priority for many companies. For an online retailer such as Wehkamp, that means being able to do things such as send a customer an email that contains the right products, available in the size the customer normally buys, from the brands he or she likes, van Slooten says. The email also must be sent at the right moment to the specific device the customer prefers to use, he adds.
"To be able to do this for almost two million customers, you have to use specialized software," van Slooten points out. "You don't want to worry about technical things or issues like big data." Wehkamp.ni has been personalizing emails for years now, and will soon start to present the most relevant products to individual customers on its Website.
Technology to improve the customer experience is nothing new to Wehkamp. Several years ago, the company began using technology from Coremetrics (which IBM acquired) to get a "grip on what is happening on our Website," van Slooten says. "We initially used this information only to optimize the customer journey. Web analytics only shows you what happens on a Website, but not why it happens."
To remedy that, Wehkamp.ni started using Tealeaf, a customer experience tool that shows movies of a complete customer session. "That way, you can see exactly which pages the customers visited," van Slooten says. "We are always looking for the solution that best fits our needs."