question are:

1. Explain why data mining is important to 1-800 Flowe?
2. Can you think of a business which use similar techniques to support its business? Explain your answer.?

APPLICATION CASE 5.1 Business Analytics and Data Mining Help 1-800-Flowers Excel in Business 1-800-Flowers is one of the best-known and most Specific benefits of the analysis were as follows: successful brands in the gift-retailing business. For More efficient marketing campaigns. more than 30 years, the New York-based company 1-800-Flowers has drastically reduced the time it has been providing customers around the world with the freshest flowers and finest selection of takes to segment customers for direct mailing. "It used to take 2 or 3 weeks now it takes 2 or 3 plants, gift baskets, gourmet foods, confections, and days," says Aaron Cano, Vice President of Cus- plush stuffed animals for every occasion. Founded tomer Knowledge Management. "That leaves us by Jim McCann in 1976, 1-800-Flowers has quickly become the leader in direct-order e-commerce after time to do more analysis and make sure we're sending relevant offers." opening its own Web site more than 14 years ago. Reduced mailings, increased response Problem rates. The company has been able to signifi- cantly reduce marketing mailings while increas- As successful as it has been, like many other compa ing response rates and be much more selective nies involved in e-commerce, 1-800-Flowers needed about TV and radio advertisements. to make decisions in real time to increase retention, Better customer experience. When a repeat reduce costs, and keep its best customers coming customer iogs on to 1-800-Fiowers.com, the back for more again and again. As the business has Web site immediately shows selections that are grown from one flower shop to an online gift retailer related to that customer's interests. "If a cus- serving more than 30 million customers, it has needed tomer usually buys tulips for his wife, we show to stay ahead of the competition by being the best him our newest and best tulip selections," Cano that it can be says. Increased repeat sales. The company's best Solution customers are returning more often because 1-800-Flowers knows who the customer is and Strongly believing in the value of close customer what he or she likes. The company makes the relationships, 1-800-Flowers wanted to better under- stand its customers' needs and wants by analyzing shopping experience easy and relevant and markets to customers at the point of contact. every piece of data that it had about them. 1-800- Flowers decided to use SAS data mining tools to dig As a result of using business analytics and data deep into its data assets to discover novel patterns mining, 1-800-Flowers reduced its operating expenses, about its customers and turn that knowledge into increased the retention rate of its best customer business transactions. segment to more than 80 percent, attracted 20 million new customers, and grew the overall repeat business Results from less than 40 percent to greater than 50 percent (a 10-basis-point increase in repeat sales across all According to McCann, business analytics and data brands translates into $40 million additional revenue mining tools from SAS have enabled 1-800-Flowers for the business). to grow its business regardless of the conditions of Sources: "SAS Helps 1-800-Flowers.com Grow Deep Roots with the larger economy. At a time when other retailers Customers," sas.com/success/1800flowers.html (accessed on are struggling to survive, 1-800-Flowers has seen May 23, 2009); "Data Mining at 1-800-Flowers," kdnuggets.com revenues grow, nearly doubling in the last 5 years. ews/200910/Zi.html (accessed on May 26, 2009). APPLICATION CASE 5.1 Business Analytics and Data Mining Help 1-800-Flowers Excel in Business 1-800-Flowers is one of the best-known and most Specific benefits of the analysis were as follows: successful brands in the gift-retailing business. For More efficient marketing campaigns. more than 30 years, the New York-based company 1-800-Flowers has drastically reduced the time it has been providing customers around the world with the freshest flowers and finest selection of takes to segment customers for direct mailing. "It used to take 2 or 3 weeks now it takes 2 or 3 plants, gift baskets, gourmet foods, confections, and days," says Aaron Cano, Vice President of Cus- plush stuffed animals for every occasion. Founded tomer Knowledge Management. "That leaves us by Jim McCann in 1976, 1-800-Flowers has quickly become the leader in direct-order e-commerce after time to do more analysis and make sure we're sending relevant offers." opening its own Web site more than 14 years ago. Reduced mailings, increased response Problem rates. The company has been able to signifi- cantly reduce marketing mailings while increas- As successful as it has been, like many other compa ing response rates and be much more selective nies involved in e-commerce, 1-800-Flowers needed about TV and radio advertisements. to make decisions in real time to increase retention, Better customer experience. When a repeat reduce costs, and keep its best customers coming customer iogs on to 1-800-Fiowers.com, the back for more again and again. As the business has Web site immediately shows selections that are grown from one flower shop to an online gift retailer related to that customer's interests. "If a cus- serving more than 30 million customers, it has needed tomer usually buys tulips for his wife, we show to stay ahead of the competition by being the best him our newest and best tulip selections," Cano that it can be says. Increased repeat sales. The company's best Solution customers are returning more often because 1-800-Flowers knows who the customer is and Strongly believing in the value of close customer what he or she likes. The company makes the relationships, 1-800-Flowers wanted to better under- stand its customers' needs and wants by analyzing shopping experience easy and relevant and markets to customers at the point of contact. every piece of data that it had about them. 1-800- Flowers decided to use SAS data mining tools to dig As a result of using business analytics and data deep into its data assets to discover novel patterns mining, 1-800-Flowers reduced its operating expenses, about its customers and turn that knowledge into increased the retention rate of its best customer business transactions. segment to more than 80 percent, attracted 20 million new customers, and grew the overall repeat business Results from less than 40 percent to greater than 50 percent (a 10-basis-point increase in repeat sales across all According to McCann, business analytics and data brands translates into $40 million additional revenue mining tools from SAS have enabled 1-800-Flowers for the business). to grow its business regardless of the conditions of Sources: "SAS Helps 1-800-Flowers.com Grow Deep Roots with the larger economy. At a time when other retailers Customers," sas.com/success/1800flowers.html (accessed on are struggling to survive, 1-800-Flowers has seen May 23, 2009); "Data Mining at 1-800-Flowers," kdnuggets.com revenues grow, nearly doubling in the last 5 years. ews/200910/Zi.html (accessed on May 26, 2009)