How Pier 1 Uses Predictive Analytics To Drive Growth
If you're still on the fence about investing in business intelligence software this year, consider what it's done for the savvy home goods company, Pier 1 Imports. The company sought out Microsoft's Azure HDInsight tool to analyze the strengths and weakness of their current business practices and processes; using predictive analytics, business intelligence, and machine learning. What they uncovered from the software and their initiatives triggered a number of strategic modifications across their entire organization.
What Pier 1 did...
Pier 1 wanted to harness the power of machine learning for predictive analytics. From the onset, the company's departments shared a common vision: create a unique shopping experience for customers, either in store or online. With a custom business intelligence solution, Pier 1 could anticipate which products might bring customer back to the brand.
With data-driven insights, Pier 1 was able to identify customer behavior in the store and make inferences about the buyer based on their purchase. Predictive analytics further revealed the influence some merchandise had on others.
How they did it...
For example, Pier 1 is a large retailer of candles. By placing candles at the front of the store, customers primarily purchased items they found in the general area. By moving this display towards the rear of the store, Pier 1 was able to expose customers to more merchandise. The insight gave each store the opportunity to generate more sales and pushed the buyer to discover something special they otherwise wouldn't have seen.
Even more importantly, the company improved relationships with vendors. When Pier 1 reshaped the layout of their floor displays using predictive analytics, it granted equal exposure to high priced and specialized offerings. Improving the exposure to customers gives merchandise an equal chance for purchase. Pier 1 can then cease procurement of this product and free up real estate in the event an item truly doesn't sell, or predictive analytics determines the item is not a fit for the market.
A personalized campaign strategy
Predictive analytics further allowed Pier 1 to develop more personalized marketing campaigns geared to extend offerings and promotions based on a customer's previous purchases. You may be thinking, "Well, that’s nothing new. We do that, too." Keep reading. BI allowed Pier 1 to take their data capture strategy to an entirely new level. Using the performance indicators of their products and services, Pier 1 was able to apply these metrics to sold merchandise. Depending on when the customer bought a product or service warranty, Pier 1 used performance indices to render the utility life of the purchase. Knowing this, the company could then market similar products or upgrades to customers when the life of their previous purchase was nearing a close— personalizing their Pier 1 experience, as well as stiffening brand advocacy.
And since Pier 1's custom BI solution is powered by machine learning, the company could visually identify purchasing trends. If the product or service was then deemed irrelevant in the market, Pier 1 shifted their efforts to drive demand for commodities BI deemed on the uptick.
BI creates these predictions after analyzing all of Pier 1’s transaction data. The software then makes inferences about long-run profitability, trends, and buying criteria based on what its’ learned.
What was accomplished?
Essentially, the tool pushed Pier 1 to look to their data to determine how a one-stop, end to end solution for customers created value for the enterprise. By using data to restructure business models, the company was able to improve relations throughout their value chain and host customer needs and wants, as a result.
In the end, a custom BI solution and predictive analytics presented data query results in an actionable, visual, and meaningful way for the business. This strategy led to more effective business process and increased revenue.
Not sure how integrating BI or predictive anlytics into your business could benefit your organization? Find out more by talking with a Datix software expert today.