For Castorama, predictive analytics is a cinch with IBM

Published on 15-May-2013

"With IBM SPSS we have optimized the process of targeting our mail-shot and SMS campaigns, tripled the number of national surveys and quadrupled the number of local initiatives that we run at the request of particular stores." - Cédric Packowski, Database and Customer Intelligence Manager, Castorama

Customer:
Castorama

Industry:
Retail

Deployment country:
France

Solution:
BA - Business Analytics, Business Integration, Empowering People, BA - Predictive Analytics

Overview

Castorama pioneered “do it yourself” home improvement in France with the opening of its first DIY store near Lille in 1969. Now a division of British retail group Kingfisher, Castorama is the leading European distributor of home improvement products and the third largest home improvement distributor in the world. With 103 stores in France and additional locations in other countries, Castorama offers customers everything they need for DIY, gardening and home improvement.

Business need:
Castorama wanted to improve the effectiveness of its direct marketing campaigns by better exploiting the information held in its extensive customer database.

Solution:
Using IBM® SPSS® Modeler for data mining and IBM SPSS Data Collection to conduct surveys and market research, the company has developed a highly effective direct marketing strategy that is helping to support better business growth.

Benefits:
Tripled the number of market research surveys conducted at a national level. Quadrupled the number of local marketing initiatives. Campaigns are more targeted and effective, helping to increase customer loyalty.

Case Study

To read a French version of this case study, click here

Castorama pioneered “do it yourself” home improvement in France with the opening of its first DIY store near Lille in 1969. Now a division of British retail group Kingfisher, Castorama is the leading European distributor of home improvement products and the third largest home improvement distributor in the world. With 103 stores in France and additional locations in other countries, Castorama offers customers everything they need for DIY, gardening and home improvement.

The company is highly focused on using direct marketing as a lever for business development, and manages a rich database containing information on millions of customers. Since 2009, Castorama has been using IBM SPSS Modeler as a data mining solution, supplemented by a suite of IBM SPSS Data Collection software for surveys, to gain better insight into its customer base and optimize marketing activity.

Capturing a greater market share
Cédric Packowski, Database and Customer Intelligence Manager at Castorama, states: “IBM SPSS Modeler is a centralized tool that we use to support our strategy of capturing a greater share of the market. Without this solution, it would be impossible for us to carry out a lot of the work that we do today in terms of direct marketing and geo-marketing.”

Using the IBM solution, Castorama centralizes customer information in a data mart, which is populated with data obtained through the company’s loyalty card scheme, in-store orders made by customers without a loyalty card, and points of contact established via the Castorama website.

“With IBM SPSS we have optimized the process of targeting our mail-shot and SMS campaigns, tripled the number of national surveys and quadrupled the number of local initiatives that we run at the request of particular stores,” Cédric Packowski adds.

“We also use SPSS to measure the return on investment of each campaign, including an assessment of the distribution of flyers, and we report the findings back to store managers. The results are clear to see: the business is growing, and so is customer loyalty.”

Powerful approach to customer intelligence
More generally, Castorama has improved its understanding of customer profiles and behavior. “Thanks to the data mining we can perform using IBM SPSS Modeler, we are able to analyze the factors that drive customers to purchase a particular product, based on a particular customer profile. This operational information allows us to adapt our product range to cater for a variety of profiles,” comments Cédric Packowski.

To extend its use of predictive analytics, Castorama decided to combine IBM SPSS Modeler with IBM SPSS Data Collection – a solution specifically designed to support surveys and market research. The company was able to complete this survey work without external support, which had the dual benefit of saving money and producing a greater number of more targeted surveys.

“While analyzing a sales receipt can give an indication of what type of customer is buying which products, it doesn’t provide any information about purchasing criteria, information sources, or ‘how’ customers purchase products. Combining this analysis with online surveys is extremely powerful for customer intelligence,” says Cédric Packowski.

Supporting better business activity
Castorama selected the IBM solutions because they are streamlined, robust, easy to deploy and easy to use. Equipped with these powerful analytical tools, the company has launched a new initiative that aims “to prove that the world of market research can create tools for the business world.”

The idea came about as the result of an observation made when using SPSS Modeler to analyze kitchen furniture sales receipts: the purchase rate for related products (electrical appliances, utensils, accessories, etc.) proved to be marginal.

When asked about this issue in a survey created using IBM SPSS Data Collection, customers reported that it was unusual for in-store salespeople to make product recommendations. Castorama responded by collaborating with its local stores to create a reporting tool using SPSS Modeler that could help remedy the situation. Since then, sales of supporting products have been increasing steadily.

While the slogan “Castorama, c’est castoche” (“Castorama, it’s a cinch”) was coined for advertising communication, the state of mind that it evokes can also be seen in the way the company’s employees work. Going far beyond marketing strategy, this ethos embeds itself in the company’s culture, and has played a significant role in the choice of decision-making tools.

About IBM Business Analytics
IBM Business Analytics software delivers data-driven insights that help organizations work smarter and outperform their peers. This comprehensive portfolio includes solutions for business intelligence, predictive analytics and decision management, performance management, and risk management.

Business Analytics solutions enable companies to identify and visualize trends and patterns in areas, such as customer analytics, that can have a profound effect on business performance. They can compare scenarios, anticipate potential threats and opportunities, better plan, budget and forecast resources, balance risks against expected returns and work to meet regulatory requirements. By making analytics widely available, organizations can align tactical and strategic decision-making to achieve business goals.

For more information
For further information please visit ibm.com/business-analytics

Products and services used

IBM products and services that were used in this case study.

Software:
SPSS Data Collection, SPSS Modeler

Legal Information

© Copyright IBM Corporation 2013. Compagnie IBM France, 17 avenue de l’Europe, 92275 Bois-Colombes Cedex. Produced in France. May 2013. IBM, the IBM logo, ibm.com and SPSS are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the web at: www.ibm.com/legal/copytrade.shtml. This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates. The client examples cited are presented for illustrative purposes only. Actual performance results may vary depending on specific configurations and operating conditions. THE INFORMATION IN THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided.