Eddie Bauer Tests Data Warehouse

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Eddie Bauer recently became the first division of its parent company, Spiegel Inc., Downers Grove, IL, to use a new data warehouse that will help it eliminate duplicate mailings and increase efficiency.


According to Jon K. Nordeen, vice president and chief information officer at Spiegel, Eddie Bauer was chosen because it "had the business need." The system was installed last month.


"Of all the Spiegel divisions, it had the most retail channels," Nordeen said, "and the division offered the best business case."


Indeed, Eddie Bauer has its hands full. Each day, it collects data from its 500 retail stores across the United States, Canada, Japan and Germany; its call centers, which handle catalog offerings; and its Web site. This data was scattered into three systems: one supported retail marketing in the Eddie Bauer stores; another supported catalog marketing; and a third covered the Internet.


Enter the Integrated Marketing System, which was developed 10 months earlier and is based on IBM's DB2 Universal Database, the platform Spiegel used to develop a variety of data-warehouse applications. These include a vendor appraisal system and an item profitability system (for the Spiegel catalog) and a merchandise information system and financial planning system (for Eddie Bauer).


According to Nordeen, the core of the 1.2-terabyte system is that it allows Eddie Bauer to increase marketing effectiveness through data modeling and analysis.


"Since we are collecting data from all of these sources and pulling them into one place, we can do an analysis based on a total understanding of how that customer shops," he said.


A key component is that the system lets the company reduce duplicate mailings -- where it may be sending the same type of direct mail piece or catalog to the same customer several times.


"Beforehand, the decision as to who got what retail marketing information -- and the timing of that -- would be completely independent of the catalog," Nordeen said. "Many times, shoppers that shopped in both ways received duplicate mailings. As a result, we were sending out a lot of material that was really ineffective."


Instead, the system lets Eddie Bauer include notices of in-store sales within the catalog, so "if we know a customer is a catalog customer, we don't need to send out a separate mailer that says our stores are also having sales also," he said.


Another useful component is that the system will keep more detailed data over a longer period of time.


"Before, if you'd run a query over a five-year period, if you come back next month, it may be done," Nordeen said. "IMS now offers analysis-on-the-fly."


The system also includes a rapid modeling environment that lets Eddie Bauer quickly identify the best way to target its marketing and merchandising accordingly.


What's next? The company is putting together its first fall mailings, and its entire fall season's marketing programs will be based on the IMS system. Hopefully, the system will increase Spiegel's sales response, which exhibited lackluster performance both last fall and spring. Also, Spiegel may pick up where Eddie Bauer left off.


"Spiegel is a closely-linked set of merchandising companies, and each company is free to chose which systems they want to invest in," Nordeen said. "As a result, many divisions end up copying what other divisions have done. In this case, Eddie Bauer had a very solid business case for preceding with the Internet Marketing System. But the Spiegel catalog division, as we speak, is taking a look at copying this system."
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