Spanish Retailer NECK & NECK Improves Customer Relationships, Increases Sales with IBM Predictive Analytics

Using Analytics, Retailers Better Align Customer Understanding to Buying Patterns

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May 20, 2010, 06:05 ET

ROME, May 20 /PRNewswire-FirstCall/ -- IBM (NYSE: IBM) today announced that NECK & NECK, a children's clothing retailer in nine European countries with more than 200 stores, is using IBM predictive analytics software to maximize customer relationships and improve the overall business. Using IBM predictive analytics, NECK & NECK has effectively targeted sales promotions, improving campaign response rates by more than 25 percent and increasing the average amount of consumer purchases by 15 percent in one year.

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In April 2010, retail sales continued to show signs of improvement since early 2008, but at a more sluggish pace than in recent months. In a still uncertain economy, retailers today need to spot trends early and proactively reach customers, rather than react to demand. IBM predictive analytics gives retailers real foresight about customer trends and deeper customer understanding and increases the overall lifetime client value.

With IBM predictive analytics, NECK & NECK can now leverage and analyze large amounts of customer data instantly on profitability, purchasing, demographics and buying behavior from its Club NECK loyalty program to improve segmentation, and discover and connect the most profitable customers with its marketing campaigns.

For example, with Club NECK VIP customers, the organization customizes offers with an online sales card that contains contact information, transactional information and certain product pack recommendations by customer, and includes customized benefits with the increase of reward points, promotional products or customized presents during the point of sale.

For the remainder of the Club NECK customers, the organization develops a customer ranking that segments customer value according to profitability, family size and transactional status. With this, the organization is able to optimize campaigns on an individual level, targeting the most valuable and profitable customers while improving satisfaction through personalized member benefits.

Julio Eugenio Quinonez, business intelligence manager at NECK & NECK, said, "IBM predictive analytics software has helped our organization improve business through better customer behavior prediction. We have now learned how to find the best variables, such as customer profitability, to help us effectively reach customers most likely to purchase and also encourage customers who haven't purchased from our organization in a while to do so with the right promotion."

Specifically, after six months of deploying the software, the NECK & NECK marketing team impressed its executive committee by comparing results of a promotional campaign versus the year prior without the boost of predictive analytics. The result was an improved campaign response rate by more than 25 percent and an increase in the average amount of consumer purchases by 15 percent in one year as the organization mailed out fewer catalogs and promotions.

Jill Puleri, global leader for the retail industry at IBM, said, "Retailers need reliable information on customers, products, and the business that supports both tactical and strategic decisions. IBM predictive analytics helps retailers improve customer intimacy and make better decisions throughout their organization – improving everything from marketing and product development to customer retention and site selection."

Twenty-one of the top 25 retailers worldwide use IBM predictive analytics to maintain and increase profitability, through improved customer understanding, operational efficiency, location analysis and product development.

To check out the IOD EMEA 2010 online press kit, click here.

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