All this is changing at Myer, the venerable Australian retailer. Founder Sidney Myer came to Australia as a penniless Russian immigrant and opened his first outlet in Melbourne in 1900. Today, the company has 62 up-market department stores across the nation and employs more than 20,000 people.

Myer is moving all its transactional data into one warehouse and uses SAS Customer Intelligence to better understand its customers and maximise the potential of its MYER one loyalty program.

A complete solution
“We started collecting transactional customer data in a structured way three years ago,” says Aaron Sarson, Myer’s Customer Strategy Manager. “This resulted in the creation of a large and valuable data warehouse, but we had no tools sitting on top of it to enable us to mine the information and gather intelligence on how our customers are behaving in our stores.”

In evaluating the tools available, Myer considered both what was needed in the short term and what was likely to be required later as the use of analytics was progressively refined. “At the same time, we wanted a non-complex solution that would enable us to get started quickly while giving us a platform on which we could develop in the future,” says Sarson. “The system needed to be one which would keep us moving forward; not one which could possibly require that we backtrack and redesign anything.”

The choice of SAS, and the way in which the solution was to be implemented, was part of a high-level strategic plan in two areas – merchandising and marketing – in support of the development of the MYER one program, and with specific three and five year goals, explains Sarson.

Understanding customers, maximising growth
The MYER one data warehouse has segmented customers according to obvious profile factors such as gender and age, and what they buy in which stores and when. In addition, the company is also addressing store profiling; analysing which goods sell in what patterns in which locations. This enables the company to adjust the merchandising plans at a store-by-store level. Myer embarked on this exercise with 500,000 customers in its database and now has nearly two million. 

In addition to customer data, Myer has enriched its warehouse by loading third-party data into the system. This provides a greater understanding of, for example, the likely affluence or household composition of any given member, and ultimately gives a clearer understanding of the market potential around a store.

The MYER one warehouse is now the core repository and will be progressively leveraged with data sets from the company’s call center, layaway system, bridal gift registry and other previously separate silos of valuable information.

“Having a better understanding of who our customers are and what and when they buy gives us an important foundation on which we can lead the organisation towards growth,” says Sarson. “The better understanding comes from segmenting MYER one customers based on the brands and products they purchase and monitoring how the segments respond to different marketing messages.

“For example, some shoppers might purchase specific cosmetics and apparel brands in combination while others might be purchasing the same cosmetics brand but never purchase apparel at Myer. The marketing opportunity to encourage cross-shopping is apparent in this instance, but there is also a requirement to understand other possible influencing factors such as the customer’s mindset or the store layout. We can look at such patterns and ask ourselves, ‘Where is the scope for growth, and what do we have to do to realise it?’”  

Three-fold ROI
With detailed intelligence increasingly available – which, Sarson points out, is willingly provided by customers when they sign up for the MYER one program – the company can now engage in meaningful dialogue with them. "We can start building profitable relationships; tell them about new brands which have landed; about special offers we believe will appeal,” says Sarson.   

For example, if a retailer knows that one of its regular shoppers has school-age children, then offers of teenage swimwear as summer approaches makes sense. Conversely, telling the retirement age demographic about deals on skiing equipment is probably a waste of marketing expense.

Myer’s use of customer intelligence extends to finding out its customers’ attitudes at the brand level, their likes and dislikes. At the macro level, Myer knows how customers feel about their Myer shopping experience and how it compares with their experiences of Myer’s competitors. 

Just three years after the launch of MYER one, its ambitious revenue goals have been fully realised. Compared with industry standards, an impressively high percentage of total sales are attributed to the program, and the company estimates that its investment in the program has been recovered some three-fold.

Myer, however, is not resting on its laurels and plans to take analysis to an even higher level. As Aaron Sarson puts it, “We want a single view of our customer opportunity; to make the customer the center of everything, including activities outsourced to third parties and what the competition is doing. The aim is to grow the business significantly, via the MYER one loyalty program supported by SAS Customer Intelligence.”

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