Pier 1 Case Study Microsoft


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.

Finding a Better Connection with Customers Through Cloud Machine Learning

Retailer Pier 1 Imports wanted to better connect with its customers using insights and data. To do that, the company took to the cloud to pilot a predictive analytics solution based on Microsoft Azure Machine Learning and Microsoft Power BI. As a result of the pilot, Pier 1 Imports may use data insights to predict which products customers will want in the future, create a dynamic website using predictive modelling and create more efficient and effective marketing campaigns.

“In the future, we believe we will have the ability to get predictive data with the Microsoft Azure Machine Learning solution, which we would be able to use to put a more-customized message in front of our customers.” Eric Hunter Pier 1 Imports Executive Vice President of Marketing

Business Needs

Shopping at a Pier 1 Imports store is an exciting, fun and inspiring experience filled with endless possibilities for her home.  The store is filled with high quality furniture, colorful home accents, and one-of-a-kind items.

So can customers still get that unique shopping experience in an era when they’re increasingly using their tablet or phone to shop online?

Pier 1 Imports thinks so. In fact, the retailer is seeking to better engage all of its customers—both online and in stores—to deliver a shopping experience that connects on a personal level and differentiates the brand in a competitive and ever-evolving marketplace. “The retail industry is going through a paradigm shift,” says Andrew Laudato, Senior Vice President and CIO, Pier 1 Imports. “Customers are shopping more online and they have more choices. In response, our goal is to ensure wherever she engages with the brand, whether in the store, on her home computer, on her mobile device – it’s a very personal and consistent message.”

As a purposeful step forward in this strategic direction, Pier 1 Imports committed to an “Omni-Channel Retailing” approach, combining stores and the organization’s recently redesigned e-commerce site to serve customers. By integrating data from these disparate sources, the company gained new insights into customers’ shopping behavior and product preferences. But integrating data for a broader perspective wasn’t enough. The company still needed to find a way to use that data in a meaningful way. “Pier 1 is a very data-rich company,” says Eric Hunter, Executive Vice President of Marketing, Pier 1 Imports. “We needed a way of leveraging these multiple sources to better match our customers to the products they’re looking for.”

Specifically, the company needed to better customize its marketing message to different customers. “For many years, we’ve treated all customers very similar through traditional marketing vehicles,” Hunter says. “But our customers are like our product, very unique.  We need to ensure we customize and personalize the right message at the right time using the most effective and efficient marketing vehicle in order to maximize our marketing efforts – this is what we’re working towards.”

To meet its goals, Pier 1 Imports wanted to combine online and in-store transactional and behavioral data to predict customer purchase intent.  With this, Pier 1 Imports can put forth a much more targeted and relevant message at the best possible time.

Solution

As it began thinking about a predictive data solution, Pier 1 Imports knew it needed to rely on the best possible technology. That’s why the company chose to build on its existing relationship with Microsoft. “Pier 1 Imports has had a long, strategic partnership with Microsoft,” says Laudato. To help implement a solution for Pier 1 Imports and its distinct needs, Microsoft recommended its partner MAX451, which specializes in cloud-based data solutions. “MAX451 gave us the opportunity to find solutions to our problems in the cloud, where we might not have looked for analytics,” says Louise Crooks, Senior Manager of Analytics Applications, Pier 1 Imports. “The cloud lets us get our hands on clickstream data without having to make significant technology purchases.”

MAX451 recommended that Pier 1 Imports take advantage of a program piloting Microsoft Azure Machine Learning solution, a predictive analytics software solution that can be embedded in applications or used along with the cloud-based Microsoft Power BI analysis solution. “Pier 1 Imports did not want to choose an on-premises solution. This was an innovative approach, and it allowed the team to have deep analytics capabilities in the cloud,” says Kristian Kimbro Rickard, Founder and CEO of MAX451.

MAX451 helped Pier 1 Imports develop a web-based solution that collects the retailer’s e-commerce site data and point-of-sale store data in Microsoft Azure HDInsight. That data is then made anonymous and processed with Azure Machine Learning models and exported into actionable Power BI reports and visualizations that can be accessed by Pier 1 Imports’ data analysts. “We were able to quickly  consolidate and process relevant Pier 1 Imports data and use it to create an analysis model to help them ask better questions and use the answers to predict which products customers might want to purchase next,” says Rickard.

As omni-channel leaders, Pier 1 Imports launched a mobile-friendly pier1.com, making shopping online and selecting preferred delivery options – whether choosing direct shipment to their home, picking up their products in their local store, or a choosing the white-glove delivery option – a breeze, from any mobile device.

Pier 1 Imports is also placing Windows tablets in stores, empowering their store associates to collaborate and problem solve directly with the customers on the sales floor.

Benefits

Learning How to Best Serve Customers

Taking the learnings from this pilot, in the future, Pier 1 Imports expects to gain more data driven insights to make better decisions.  “As we learn the patterns in our data, it will help us personalize our website, and merchandise our stores with more accurate and robust data driven decision making,” says Laudato.

More Effective Marketing, Stronger Relationships

By better understanding customer behaviors and purchases, Pier 1 Imports can create more effective marketing campaigns. “In the future, we believe we will have the ability to get predictive data with the Microsoft Azure Machine Learning solution, which we would be able to use to put a more-customized message in front of our customers,” says Hunter. “That creates a better relationship, where customers will see something they are actually interested in. For example, we don’t want to continually send them sale or discount messaging when they might be more interested in new trend driven products. This level of predictive modeling will make us more efficient and effective and more in-tune with our customers.”

Adds Sharon Leite, EVP Sales and Customer Experience, “Although the Pier 1 Imports brand is the same as it has been for more than 50 years, we are continually getting better at identifying what our customer wants, using Microsoft Azure Machine Learning and resulting data insights.”

As it works to gain new insights from its customer data, Pier 1 Imports will continue working with Microsoft Azure. “At Pier 1 Imports, we’ve embraced the cloud,” says Laudato. “It helps us operationalize technology quickly and react to our ever-evolving business needs.”

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