FRAMINGHAM (08/04/2000) - Saks Inc. is rolling out a new online bill payment system that the retail giant is betting will also boost its ability to deliver highly tailored marketing messages to customers.
The $6.4 billion Birmingham, Ala.-based operator of department stores like Saks Fifth Avenue, Proffitt's and Parisian recently signed up with Natick, Mass.-based Edocs Inc. to implement an Internet billing and customer relationship management platform.
When it's deployed later this year, the technology will let Saks customers pay their credit-card bills online and receive previews of sales events, exclusive promotions, giveaways and other targeted perks, based on their billing profiles, said Michael Rodgers, Saks' vice president of credit.
Connecting With Customers
Saks is an example of the brick-and-mortar retailers that are attempting to take advantage early of online billing software to establish interactive relationships with their best customers, said Avivah Litan, an analyst at Gartner Group Inc. in Stamford, Conn.
"What's really driving companies like Saks is the ability this gives for them to target their marketing much more effectively" at their most profitable customers, Litan said.
"A lot of players in this space are trying to demonstrate that there is a value to this beyond just presenting a bill over the Internet," agreed Paul Hughes, an analyst at The Yankee Group Inc. in Boston. "The bill is just the hookup mechanism."
The real return on investment comes from the potential to embed very customer-specific marketing messages - based on previous purchasing behavior - in online billing statements, Rodgers said.
In the case of Saks - which has 357 stores in 39 states - Edocs' BillDirect software is providing this capability.
The technology lets Saks transform its legacy billing data into a format that can be presented, accessed and manipulated over the Web. Saks customers will be able to view statements that go back six months and ask questions or dispute line items with customer representatives via online chat sessions.
Saks is also implementing Edocs' MarketWorkz software, which allows for rules-based profiles to be built using data contained in a customer's billing statement, such as types of purchases the customer has made, frequency of purchases, amount spent or ZIP code.
"You can have rules that say, If a cardholder carries a balance of more than $2,000 a month and lives in this area and is part of this demographic group, then show them the XYZ offer,' " according to Jim Moran, a co-founder of Edocs.
Saks will use such profiles to cross-sell products from companies it has partnerships with and to target customers for its own marketing messages more effectively, Rodgers said.
"I can show you exactly what you want to see, to drive your purchases," Rodgers said. "It's a great payback if we can generate even a minor sales lift."
Rodgers wouldn't say how much it will cost Saks to implement the billing technology.
"I can tell you, it's not cheap," said Rodgers. But the system will immediately pay for itself through operational savings if a mere 5% of the 3.5 million customers billed monthly by Saks opt to receive all their bills electronically, he said.