Data-driven analytics yield better offers at Navy store

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Client: The Navy Exchange
Objective: This global retailer needed a better data analytics system to simplify its data processing and improve marketing ROI.

The Navy Exchange is a $2.5 billion retailer with more than 300 stores across the globe that caters to active and retired US sailors and their families. Its merchandise runs the gamut from clothing and food to electronics and home and bath products with brand names, such as Victoria's Secret and Levi's.

“We treat our business just like any other retailer,” says Tess Paquette, SVP and chief merchandising officer of Navy Exchange Service Command (NEXCOM), a government entity.

With 13 store formats, store revenue ranges that differ by more than $100 million and oversea locations that mandate 90-day lead times, the Navy Exchange found it was drowning in customer and store data but did not have a good solution to leverage the possible insights that existed in its mass of data.

STRATEGY: Navy Exchange merchants were spending more than 20 hours a week compiling data, Paquette says. The group began looking for an “out of the box” business intelligence solution to better analyze its data. “We wanted it to be simple and different than just our data warehouse,” she says. The retailer turned to QuantiSense, a business intelligence and analytics software provider, specializing in retail. The QuantiSense tool lies on top of NEXCOM's existing Netezza data warehouse and works in conjunction with its MicroStrategy software platform. It shows store managers which inventory is aging, which product to increase and which to get rid of — all data that informs marketing strategy. “Data is formatted, so everyone sees the same thing.” Paquette says.

RESULTS: The QuantiSense system allowed the Navy Exchange to run more focused marketing programs by analyzing current and past customer transaction data.

For example, during a July 4 promotion, it compared prior year sales of soft drinks in its stores and found that Coca-Cola had greater “pull” with its customers. Customers who bought Coke during the previous July 4 and Memorial Day holidays had baskets that were on average 16% larger. Noting the positive impact of Coke purchases, NEXCOM pushed this soft drink in summer holiday promos, including circulars, and achieved a 9% increase in transactions for that period.

A similar Black Friday sale comparison found that apparel was a leading revenue category during this period. Taking this into account for Black Friday 2010, NEXCOM improved sales for that weekend 5% year-over-year by including more pages related to apparel in its holiday weekend circular. The 20 hours of labor spent on data processing was cut to about a half hour spent printing automated reports, Paquette estimates.

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