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Retailer Profits from BA Tool

September 1, 2009
By

Cabela’s Uses SAS Business Analytics Tool
to Boost Bottom Line

Business Intelligence (BI) applications are becoming more important within the global corporate marketplace by helping businesses with managerial decision making, streamlining operational processes, improving customer relations, enhancing marketing initiatives, and providing timely access to relevant data to boost their competitive advantage. One company taking advantage of BI to boost its bottom line is outdoor sporting goods retailer Cabela’s.

Cabela’s bills itself as the “World’s Foremost Outfitter®” (Cabela’s Investor Relations, 2009), having built its empire more on catalog and internet sales than on numerous retail outlets. Cabela’s has 30 retail stores across the United States and Canada, with its website announcing future store locations in Colorado and New Jersey. Total revenue went from $1.4B in 2003 to $2.3B in 2007. (Cabela’s, 2008)

To increase market share, Cabela’s has used SAS Business Analytics (BA). (SAS, Customers, 2008) This software application tool provides capabilities in data and text mining, data visualization, forecasting, operations research, and marketing optimization. (SAS, Products & Solutions, 2008) SAS BA is fully integrated with data warehousing capabilities provided by Teradata, which allow data to be modeled quicker with greater degrees of flexibility. This holistic software tool is designed to help leaders at Cabela’s make smarter strategic decisions, drive revenue growth, and make quicker, more informed decisions that will enhance its competitive advantage in the marketplace.

Effective and Efficient Marketing

According to Corey Bergstrom, Cabela’s Director of Marketing Research and Analysis, the primary way that Cabela’s uses the SAS BA tool is to hone and improve on its marketing strategies and campaigns. (SAS, 2008) Bergstrom states,“Using SAS, we create predictive models to optimize customer selection for all customer contacts. Cabela’s will use these prediction scores to maximize marketing spend across channels and within each customer’s personal contact strategy. These efforts have allowed Cabela’s to continue its growth in a profitable manner.” (SAS, 2008)

Cabela’s is already seeing a strong return on investment. According to the SAS Customer Success Story, these benefits have included a 60% increase in direct marketing response rates, the ability to choose better retail site locations, a method for identifying its top clients by tracking catalog and internet purchases, an analysis feature that calculates the profitability of individual promotions, and the ability to use previous customer interactions to create and dovetail ideal marketing offers to client preferences. (SAS, 2008)

Cabela’s is working hard to identify and target potential new customers before its competitors do. With the BA tool, Cabela’s can make each marketing piece unique to the desires and habits of its clientele. Customized data can be used to execute targeted mailing campaigns with seasonal coupons based on buying preferences, and on a broader scale, the data can help management choose new retail locations in areas that will likely yield higher revenues. For example, if you don’t have to mail a flyer to every person in every zip code and can tailor mailings to the most likely to buy, why not do it? If you can build your next store in a geographic area with prospects most likely to buy your products, why not do it? If you can help your cashiers take better care of top clients by identifying them at the point of sale, why not do it? If you can send that guy who buys gloves every October since 2003 a customized marketing flyer on new gloves, why not do it?

The BA tool has allowed Cabela’s to spend more time analyzing data versus managing it. Managerial decision making that results in a competitive advantage requires that kind of thorough analysis. Cabela’s has proven that a tool like this can be profitable in terms of additional revenues and increased market share. Bergstrom added, “These efforts have allowed Cabela’s to continue its growth in a prof­itable manner. We’re not talking single-digit growth. Over several years, it’s double-digit growth.” (SAS, 2008)

References

Cabela’s. (2008, February 26). Cabela’s 2007 Annual Report. Retrieved January 22, 2009.

Cabela’s Investor Relations. (2009). Retrieved 22 January, 2009.

SAS. (2008). SAS.com Products and Solutions/Analytics. Retrieved January 22, 2009.

SAS. (2008). SAS® helps Cabela’s reel in more customers. Retrieved January 22, 2009.

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