Nectar improves data mining and segmentation
The UK retail coalition programme, Nectar, is to upgrade its data mining capabilities to include analytical software from business intelligence firm, SAS UK. The new tools will allow Nectar's operator, Loyalty Management UK (LMUK), to use data mining techniques such as predictive modelling and cluster analysis in preparation for points update mailings.
Since the Nectar programme launched in September 2002, LMUK has made use of a range of data analysis tools, including BusinessObjects reporting, and ArcGIS for spatial analysis such as market penetration mapping, and catchment area analysis. The SAS solution is the latest addition to the programme's growing set of analytical tools.
A spokesperson for LMUK told The Wise Marketer that the firm has recently been developing its Points Update Mailing (PUM) coupon targeting capability in SQL (structured query language database). At present, approximately every other household receives a different version of the coupon sheet as part of the regular PUM mail drop.
Improved segmentation Now that the programme has sufficient transactional history, LMUK is ready to increase the level of sophistication of the various segmentations and analyses it develops for the programme's sponsors, and will be making use of the SAS solution's data mining techniques (such as predictive modelling and cluster analysis) in doing so.
To date, Nectar has signed a total of 13 sponsors: Sainsbury's, Barclaycard, Debenhams, BP, Threshers, Vodafone, Adams, e-Energy, all:sports, Winemark, Ford, Hertz, and Magnet. These sponsors are all provided by LMUK with insights into activities such as campaign selections, marketing opportunities, and performance measurements.
Heavy analysis When LMUK evaluated SAS, it was found that it can also be used to make efficiency gains in the PUM segmentation process, and Nectar is currently preparing to produce the next PUM segmentation within SAS. The use of SAS's software is expected to help LMUK deliver the PUM significantly faster than was previously possible.
The system will be required to analyse more than 1 billion transactional records generated by Nectar's active card-using population, and various analyses and campaign selections will be produced on an ongoing basis.
"Organisations are increasingly recognising that improved access to data, and advanced analysis of that data, is key to strong performance," noted Phil Bond, CEO for SAS UK. "LMUK is leading the trend for customer loyalty schemes in the UK and we look forward to delivering the knowledge they require to support their sponsors, suppliers, and customers."
"We looked for a supplier that could provide a business critical solution for our demanding performance, flexibility, and scalability requirements. These were critical to us due to the speed at which the Nectar programme has grown," said Duncan Stirling, client services director for LMUK. "SAS is able to provide LMUK with the sophisticated analysis we require, at the speed we require. Its size, stability, and length of time in the market were also key factors in the selection process."