REVIEWER: Chang Suk Suh, team leader of the customer relationship management (CRM) team for Lotte Department Store.

BACKGROUND: With 23 locations, Lotte Department Store is Korea’s largest department store. Lotte has a 60 percent market share, yearly sales of $8.5 billion and more than 10 million customers. In a project to improve CRM, Lotte conducted a CRM business consulting project with Teradata in 2002 and a CRM implementation project with Teradata in January 2004. The project improved direct marketing (DM) response rate from 30 percent at the project’s beginning to 47 percent in 2007, the customer retention rate rose from 81 percent to 84 percent, the customer acquisition rate rose from 65 percent to 74 percent, and the customer loyalty rate rose from 69 percent to 72 percent.

HARDWARE PLATFORMS: Currently using extract, transform and load (DataStage), OLAP (MicroStrategy), mining (E-Miner) and campaign (TCRM V5.1) tools based on 5380 eight node and Teradata V2R6.

PROBLEM SOLVED: Using a Teradata (TCRM) solution based on Teradata Warehouse, we planned and implemented a systematic campaign and introduced a result analysis process. As a result, we could improve the campaign response rate, CRM key performance indicators and customer loyalty.

PRODUCT FUNCTIONALITY: We were able to select target customers by using OLAP for customer analysis and a mining tool for detailed customer studies. We also used a TCRM solution to conduct detailed one-to-one campaigns.

STRENGTHS: Teradata database management system allowed us to quickly process large quantities of data. Meanwhile, OLAP and TCRM solutions helped us analyze customer purchasing patterns and characteristics for different life stages, giving us insight into our customers. This allowed us to create different care strategies for different types of customers and to select customers for target marketing, resulting in a successful campaign and customer strategy. In addition, benchmarking Teradata’s many references in the retail sector in Korea and abroad and implementing a previous CRM business consulting project helped us to successfully complete the CRM project for Lotte.

WEAKNESSES: Lotte needed multiple campaigns for various users at the head office and each department store, but TCRM V5 had problems with speed. We hope these issues can be resolved with the release of TCRM V6.

SELECTION CRITERIA: Teradata had a strong reputation in Korea and abroad, and we looked at numerous customer reference cases. Teradata’s understanding of the client’s needs from its previous CRM business consulting project for Lotte was also a positive factor.

DELIVERABLES: We installed TCRM applications at the head office and each store, and conducted user training. Besides creating CRM systems, we also performed consulting for CRM organization and staffing, processes and required skills. In addition, we proposed a medium-term CRM roadmap for Lotte.

VENDOR SUPPORT: Teradata’s sales team and professional service team provided full business and technical support ranging from the CRM Business Consulting Project to the CRM Implementation Project. We also provided reference visit support for global best practices in the retail sector, giving an effective benchmark for global cases.

DOCUMENTATION: It was easy to run the product according to the documentation Teradata provided.

Teradata CRM and Teradata Warehouse
Teradata Corporation
1700 S. Patterson Blvd.
Dayton, OH 45479
(937) 445-5993

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