AData-Filled Journey
While retail expansion is slowing for many chains, Cabela’s is picking up steam as it transitions from a direct-to-consumer operator to multichannel status. Analytics is at the core of this change.
Analytics, a decade-old tradition for the outdoor lifestyle retailer, dates back to when the company was solely a direct-mail retailer. Then, the company used the technology for insight into its customer base and for tracking marketing programs. Today, Cabela’s is applying the same metrics to support an evolving multichannel strategy. This involved expanding the analytics process, however.
When Cabela’s dedicated its efforts solely to direct channels, five to 10 statisticians analyzed marketing programs using a server-based solution from Cary, N.C.-based SAS. Data resided in a separate data warehouse. Problems arose as some data was not accessible to the growing number of new users, and results were produced more slowly.
Cabela’s streamlined the process by customizing its existing software. Next, the chain integrated the solution with its enterprise data warehouse from Teradata, Miamisburg, Ohio, which created more reporting efficiency.
“Not only did we begin to get better answers to our questions, but over time, with the help of new software upgrades, we are getting results more readily,” said Corey Bergstrom, Cabela’s director of market and analysis.
Years ago, long waits for results were not uncommon. But with each new release, response time has been shortened to weeks, days, hours, and now, “We receive answers within minutes,” Bergstrom said. “This more readily accessible information gives us a more real-time solution to problems.”
Armed with the latest version of SAS 9.2, Cabela’s analysts now tackle marketing from all business angles and selling channels. From a direct-channel perspective, the company has expertly learned to use the technology to identify the optimal number of marketing efforts needed to capture market share and determine whether current programs should be cut back or increased.
This framework also helps Cabela’s understand how marketing efforts are supporting its growing bricks-and-mortar channel. The chain currently has 29 stores and relies on print media—from direct-mail pieces to insertions in catalogs—to drive store traffic and sales. As Cabela’s continues to expand, it targets promotions to specific shoppers and the stores to which they travel.
“By applying analytics, we have improved flyer performance by 60% and driven significant incremental revenue,” Bergstrom said.
This is a perfect example of how far Cabela’s analytics strategy has come. Historically, it generated bricks-and-mortar promotions based on how close shoppers lived to stores—a strategy that lost steam as the chain grew in size.
“More shoppers caught on to the in-store experience offered in each location, and they began adding new, alternate stores to their list of potential stops,” Bergstrom noted.
Once Cabela’s uncovered this information, the chain began monitoring shopper behavior in each store. These details prompted the chain to create marketing campaigns that catered to store-specific shoppers.
The chain also looks at key performance components across channels—a challenging process for the new multichannel retailer. “We need to ensure we are not counting the same marketing dollar twice in more than one channel: the store, catalog or e-mail,” Bergstrom explained.
The marketing department’s success with analytics has other Cabela’s divisions demanding similar insight and functionality. To date, merchandising, inventory and store site-selection processes are also driven by analytics.
“Our goal is to use the technology on an enterprise level by the end of this year and beyond,” Bergstrom said. “We want to instill a corporate culture that readily and comfortably uses analytics to aid in decision making.”