Data moves to center stage
Hastings VP of marketing, Kevin Ball, and its director of merchandising, Miea Levery
Cross-channel marketing still challenges retailers, but some are using platforms that bring data together, Chantal Todé reports.
Amarillo, TX-based Hastings Entertainment Inc. is a multimedia retailer which sells movies, books, CDs and video games, both online and in 154 stores located throughout the US. The chain's movie rental business, however, serves as the foundation for its latest multichannel marketing strategy: It is mining the data from its millions of rental customers to send targeted e-mails and direct mail offers.
That is only the beginning. In June, Hastings will inform customers that their movie rental cards are now Entertainment Passports that can be used anywhere in the store and will come with loyalty card benefits such as targeted offers.
At first, the company wasn't sure how to use the movie rental data. “Through research, Hastings learned that it had millions of people with rental accounts and a lot of customer information as a result,” says VP of marketing Kevin Ball. “However, the company didn't have a good way to dive into any of that information.”
Data are often in separate locations
Industry talk of multichannel marketing is so prevalent that one would think it was a fait accompli for many companies. But creating a cohesive communication strategy is still a work in progress for some retailers.
Part of the problem, experts say, is that retailers can't find people who understand each of the channels well enough to effectively manage a multichannel program. Another is that the necessary data from each channel is often still located in separate repositories.
One way retailers are addressing the latter problem is with powerful business platforms that automate campaign creation and execution across multiple channels, housing all the necessary data in a central repository.
Hastings went live with Unica's Affinium multichannel campaign management platform in January, after spending a year developing an internal CRM system that could provide customer data going back only 90 days and only offered recency and frequency analytics. With Unica's system, Hastings can look deeper into the database and run queries based on customer patterns.
In an industry where CD sales are dropping and many retailers are suffering, Hastings has a diversified model that it thinks helps buffer it from those problems. For the fiscal year ended January 31, revenue decreased 0.1% to a total of $547.7 million. Used and budget-priced products account for approximately 11% of sales while rental accounts for 16%. Some of the other top categories contributing to the coffer are books, video, music and video games.
Then there's the company's Internet business, which offers consumers access to 1.5 million new and used products. Through its proprietary GoShip program, Hastings fills Internet orders for used products placed at its Web site, GoHastings.com, as well as on Amazon, for product that is shipped directly from 110 of its stores.
One of Hastings' goals for the future is to “deliver relevant entertainment to customers without wasting marketing dollars,” says Ball. While the internal CRM system helped accomplish this for a while, he explains, last year Hastings decided it “needed to go further to find out about customer likes and dislikes” in order to market to them even more efficiently.
For example, to promote the launch of the latest Grand Theft Auto video game, Hastings sent people who might be interested in the game an e-mail or direct mail piece with a link to a microsite in order to reserve a copy of the game. Information about an upcoming midnight release party was also included. Previously, Hastings would have marketed a new release such as this with a free-standing insert distributed in local Sunday newspapers.
Platform helps deliver relevance
One of the benefits of the new strategy is that it delivers relevant messages. “The more Hastings can tie the customer base to things that they enjoy, the more it creates Hastings advocates,” says Miea Levery, Hastings' director of merchandising.
For retailers with centralized customer data, “the next big shift they are starting to make is looking at marketing from the customers' viewpoint,” says Jay Henderson, director of retail segment management at Unica.
One example is JCPenney, which uses its data warehouse, supplied by the Teradata campaign management platform, to determine a contact strategy for each of its customers. This includes how many contacts are appropriate as well as what the right mix of communications will be.
Higher value customers tend to be inundated with messages when the various divisions of a retail operation are separate, says Mark Swenson, principal consultant at Teradata Corp. JCPenney, however, can determine if it has already contacted a specific customer too many times and decide to not go there again.
The retailer also benefits from the ability to determine the total value of customers and where its opportunities for growth are, he continues.
“JCPenney is taking advantage of the platform more than most retailers,” Swenson says.
For Hastings, time is of the essence when it comes to multichannel marketing — after all, keeping up with what's new and what your customers want can be tough for retailers. “Hastings has to move quickly, that's what it's all about right now,” Ball says. Using the new system, he adds, “will give us guidance into how to move quicker.”