Like many retailers, Sears Holdings, the parent of Sears and Kmart, is trying to get closer to its customers. At Sears’ scale, that requires big-time data analysis capabilities, but three years ago, Sears’ IT wasn’t really up to the task.
“We wanted to personalize marketing campaigns, coupons, and offers down to the individual customer, but our legacy systems were incapable of supporting that,” says Phil Shelley, Sears’ executive VP and CTO, in a meeting with InformationWeek editors and his team at company headquarters in suburban Chicago.
Improving customer loyalty, and with it sales and profitability, is desperately important to Sears as it faces fierce competition from Wal-Mart and Target, as well as online retailers such as Amazon.com. While revenue at Sears has declined, from $50 billion in 2008 to $42 billion in 2011, big-box rivals Wal-Mart and Target have grown steadily, and they’re far more profitable. Meantime, Amazon has gone from $19 billion in revenue in 2008 to $48 billion last year, passing Sears for the first time.
A Shop Your Way Rewards membership program started by Sears in 2011 is part of a five-part strategy to get the company back on track. Behind the scenes is a cutting-edge implementation of Apache Hadoop, the high-scale, open source data processing platform driving the big data trend. Despite Sears’ less-than-cutting-edge reputation as a retailer, the company has been an innovator in using big data. In fact, Shelley is leading a Sears subsidiary, MetaScale, that’s pitching services to help companies outside retail use Hadoop.
But will companies be interested in buying big data cloud and consulting services from Sears? And can Sears’ own big data efforts help the company regain its footing in the retail industry?