What is data good for? Absolutely nothing without the right people and the right tools, says Angela Watson, Vice President of Analytics at Overstock.com, an online retailer that offers brand-name merchandise at discounted prices.
It’s common for organizations to have “analysis paralysis” where not all departments use data, analytics to make business decisions. But Watson says she has seen some real benefits from analytics in terms of costs savings. So it’s hard to argue with that. She uses SAS to help Overstock.com understand its customers and measure the effectiveness of various marketing initiatives.
As I watched Watson present at the SAS Global Forum Executive Conference 2011, not only did I think about what a good deal I could get on a rug I’m in the market for on Overstock.com, but I considered how Watson applies analytics to know that I’m in the market for it. It’s these types of insights that analytics will provide, as well as a plan of action to get me to buy that rug – a plan that works every time.
“What you really want to do is predict the future – that’s the Holy Grail of analytics. But it’s actually possible with insights gleaned from the data, or in our case customer behavior patterns,” says Watson about predictive modeling.
Watson explained that her group worked side-by-side with SAS through its solution implementation, iteratively building and testing statistical models before arriving at the right one. It used in-database processing and periodic and automatic scoring to get results. Overstock.com is now able to dissect customer behavior, optimize marketing campaigns and reduce marketing spend. For example, it used SAS to optimize a very expensive email campaign, decreasing costs by 8 percent!
“Predictive analytics is all about targeting the right offer to right customer at the right time,” Watson says. “And the beauty about SAS Enterprise Miner in particular is that you don’t have to have a PhD to understand it.” Watson can take a screenshot of the solution, present it to executives and they appreciate the value it brings right away. So truly, with the right people and the right tools, the data becomes your greatest asset.
Check out Watson’s paper, “Implementing a Data Mining Solution with SAS and Teradata” for more on how Overstock.com embraces analytics.