My Day-to-Day: In Business Week

It is cool to wake up this morning to a case study of how we (Omniture) helped Best Buy covered in Business Week - particularly since it's a client and a project that I'm involved in day-to-day (and that had me in Minneapolis at their HQ nearly weekly last summer and fall.)

I know that when friends and family ask what I do in my 9-to-5, I explain that I consult on Omniture's Discover OnPremise solution, helping clients configure it, learn how to use it, and push the boundaries of their usage to get the most out of it. But it helps to have concrete examples, like this:

As the financial meltdown spiraled in September, spending habits changed quickly. Many consumers stopped spending altogether. Those who were still hitting stores showed some disturbing patterns that weren't lost on retailer Best Buy (BBY). The number of customers signing up for financing on such purchases as big-screen TVs and computers surged. At the same time, the number of shoppers spending $1,000 or more per trip plummeted.

In response, Best Buy began offering free financing for entire shopping carts full of items--rather than one product at a time. "We realized that storewide financing could be a powerful differentiator in the marketplace," says Best Buy Chief Marketing Officer Barry Judge. That left just one question: At what dollar amount should Best Buy start offering the free financing?

To find its answer, Best Buy turned to software from analytics company Omniture. In trials, Best Buy offered financing at different levels: $499, $699, or $999. Every time a customer signed up for payments, Omniture (OMTR) tracked purchase details and homed in on the answer: $499. Within weeks, the software cranked out data that the store's own systems, with their antiquated databases, couldn't have matched.

Omniture's software is emblematic of a new breed of analytics that's helping retailers capture as much as possible from the dwindling pool of dollars being spent by penny-pinching consumers. Even as retailers trim staff, curtail marketing, and close stores, they're ramping up spending in one area: technologies that help them track customers' behavior and purchase patterns. "A lot of retailers are looking for small technology investments that produce big results, and analytics is one of those things," says Gartner (IT) researcher Hung LeHong.

...

Analytics had a tangible result at Best Buy, which introduced the free financing offer in November. The following month, Best Buy reported that the Omniture system had helped create tens of millions of dollars in profits. "As ad dollars become more precious, we all have to be smarter," Judge says. "We think one of the ways we're going to win in this new game is understanding our customers better than anyone else."

Check out the whole article. (And this comes, of course, with a hat-tip to my wonderful clients up at Best Buy. It's great to read stuff like this, but even better to have the blessing to work with you!)

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