Sainsbury's marketing campaigns improved by new datawarehouse

Posted:

17:21 10 May 2004

Topics:

Data Warehousing

Users reveal their success stories at the Teradata user conference

Sainsbury's may have struggled financially during its lengthy business transformation programme, but one department has reaped the benefits of new IT systems over the past two years, delegates at the annual Teradata user conference heard last month.

Return on investment from direct marketing campaigns at Sainsbury's has risen threefold since the company invested in a Teradata datawarehouse system in 2002, revealed Alex Fovargue, the retailer's head of customer marketing analytics.

The 5Tbyte datawarehouse, which is used to analyse Nectar card information to improve the accuracy of marketing campaigns, has provided a number of benefits across the business, Fovargue said.

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"Return on investment from campaigns has risen threefold and we have made significant savings by doing analysis in-house instead of using agencies," he said.

"We have a single customer view, which helps other areas of the business, such as energy and utilities, and we can report how a campaign is going days after it has dropped. Most importantly, targeting is data-driven rather than being done on gut feel."

The datawarehouse, which runs Teradata CRM software, analytics from SAS, and Microsoft Access database software, has provided a number of improvements on the systems the marketing department used previously, Fovargue said.

"Life before Teradata was reward card data held in databases with no direct access - it was affectionately known as 'the vault'," he said. "Decision making was limited as there was no clear understanding of customer behaviour. Also, IT staff were required to extract data - this had to be right first time, which led to long lead times."

Richard Zanetti, head of customer segmentation at Sainsbury's, said the improved information has also allowed the retailer to ensure stores are offering the correct product mix.

"We have 10 segments for customers, which are based on purchase behaviour," he said. "Using Teradata has allowed us to create clustered store formats to deal with variations."

This summer, when Sainsbury's is due to complete the business transformation programme it began with Accenture in 2000, will see the company merging its Teradata datawarehouses for customer and trading information.

This will allow the marketing department to analyse till roll data as well as Nectar card information, increasing the accuracy of campaigns, Fovargue said.

As well as Teradata products, the IT overhaul at Sainsbury's has included 14,000 NCR point of sale systems running Retalix software, 1,000 servers based on Sun Microsystems and EMC technology, 6,000 Compaq HP desktops and Retek merchandising and forecasting software.

Teradata user conference round-up       

Teradata is joining forces with CRM supplier Siebel to make it easier for companies to manage and analyse large volumes of data. Teradata said the focus of the collaboration is to provide better integration between its datawarehouse systems and Siebel's Analytics products, both of which are used by many global firms. A report from analyst firm Ventana Research said the partnership would benefit businesses that need to perform complex analyses on large volumes of data. But the report also warned that the deal could create some market confusion given that Teradata has its own set of CRM analytical applications 

Teradata launched the latest version of its data mining software. Warehouse Miner 4.0, which incorporates best practice from Teradata's data mining consultancy, now automates the generation of data for analysis. It also offers built-in business intelligence capabilities that identify patterns and anomalies in information, the company said.   

Nearly 80% of European executives and 66% of US business leaders consider the information that is available to them for making business decisions to be "somewhat" or "not very" accurate, according to a survey commissioned by Teradata. Nearly 75% of US executives and more than 50% of their European counterparts said the lack of "right-time information" has cost their company money, the research found.   

Teradata's parent company NCR reported record revenues of £170m for the datawarehouse division in the first quarter of 2004, up by 10% on the same period last year. NCR said it had seen signs that users were becoming less constrained in their IT spending, with increasing numbers rolling out systems to store and analyse data. It expects further business as companies act to comply with forthcoming financial regulations, such as Basel 2.