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CVS Better Targets Customers With New DBM System

CVS Corp., Woonsocket, RI, the largest drugstore retailer in the United States,

is testing a customer-level data warehouse and data mining system that will target its best customers and will offer the retailer merchandising opportunities.

“We want to create very targeted offers that are based on [best customers’] prior consumption behavior,” said Mark Robinson, relationship marketing manager at CVS.

The system, which is being tested in three markets, is based on an Oracle database and works with numerous utility tool vendors including Prime Response, Denver, for its campaign management needs; SAS Institute, Cary, NC, for its data mining, reporting and ad hoc queries; and Microstrategy, Vienna, VA, for its OLAP tools.

Prime Response’s campaign manager software product Prime Vantage provides CVS with offer-pool batch processing, which optimizes the prioritization of offers and marries those offers to the eligible customers.

“This is a very process-intensive functionality,” Robinson said. “It is very well-suited to retailers who are sending out en masse monthly types of mailings, where you need to prioritize offers and synch those up with the customers eligible to receive these offers.”

Last fall, the $15 billion retailer began testing the system in Albany, NY, Baltimore, MD, and Greensboro, NC, and began sending targeted mailings to customers in its 300,000-count loyalty card database file. The retailer is currently processing its February mailings.

These mailings feature precise customization — including customer-defined coupons and updates on information of interest such as health, beauty and nutrition. Loyalty-card customers have the chance to receive in-store benefits, such as immediate incentives based on what they have purchased in the past. The retailer will use this information for continuity mailing programs, where customers can win rewards for meeting a threshold over a two or three month period.

It will also allow the retailer to look at data for new merchandising opportunities, such as defining store layout and category adjacency in its stores.

“This data will be integrated into our category-management process,” said Robinson. “Customer-level data certainly can enhance how we define the roles of a specific category, for example, and will offer a more strategic approach to cross-promotions and merchandising opportunities.”

CVS plans to expand its system chain-wide.

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