Cecile implements high-speed mail distribution system; large volumes of mail distributed rapidly, and customer data used in marketing

"Cecile on Network" top page http://www.cecile.co.jp/ (Japanese)

Cecile Co., Ltd. one of Japan's largest catalog mail-order shopping companies, operates the "Cecile Net Club (CNC)" targeting E-commerce site users, and has attracted 630,000 members. It has implemented a mail distribution system that enables rapid distribution of large volumes of mail to facilitate distribution of a mail magazine for CNC members. The introduction of this system has made it possible to use customer data for marketing as well. In the future, Cecile plans to aim for more efficient mail distribution and more effective data applications, with attention to data analysis applications and reductions in the time required to create data for distribution.

Capable of sending up to 100,000 individual mail messages per hour

Mail server

Cecile Co., Ltd. one of Japan's largest catalog mail-order shopping companies, operates the E-commerce site "Cecile on Network" in an effort to strengthen its Internet sales operations. As a part of these efforts, it has established the "CNC" member organization for customers using the E-commerce site. CNC currently boasts some 630,000 members to whom Cecile distributes a mail magazine twice each month. In addition to this regular mailing, the company also sends E-mail directed to specific customer segments based on individual member attributes and purchase histories.
Cecile implemented the mail distribution system to ensure quick, efficient distribution of mail to all CNC members. This mail distribution system is comprised of six NEC Express servers; the mail distribution software is "MailShooter," which was developed by NEC Software Hokkaido using highly reliable Linux clustering. "HDE Customer Care," a one-to-one marketing system from Horizon Digital Enterprise, is used to create the mail magazine, and the mail created is distributed based on data stored in a member database server. The member database server executes matching of three types of information - accumulated information, information added or updated from Host Computer throughout the company, and information updated by the customers themselves via "Cecile on Network" - to ensure that the newest information is always available.
The most unique feature of this mail distribution system is its high-speed operation, which enables around 100,000 messages to be sent each hour. Under full operation, the system can complete transmissions to all members within about six hours. "Error mail," which is generated when mail does not reach the intended members for any of a number of reasons, is sorted based on error type by an "error mail server" to facilitate centralized processing. The system also allows the company to see which sites the customer linked to from the mail magazine.

Enabling rapid distribution of high volumes of mail

Takashi Shimoda Section Chief, E-Commerce Project Dept., E-Commerce Div. Cecile Co., Ltd.

When Cecile put out a call for CNC members, it received applications from far more E-commerce fans than it had expected. Realizing that the existing mail distribution system would soon be extended beyond its limitations, the company thus began studying the implementation of a new system. Kazunori Ogawa, who works in Cecile's Network Promotion Department, explains.
"In May 2000, five months after we started CNC, we already had 100,000 members. It was clear that if the membership continued to grow at this pace, the system wouldn't be able to keep up. That's when we started detailed investigations into the introduction of a mail distribution system. As we were getting further into these investigations, the membership reached about 200,000, and we decided that the first essential condition for the new system was speed in mail distribution."
Cecile selected the candidates for system construction, and began negotiations. Takashi Shimoda, a Section Chief in the Network Promotion Department, explains the reasons that NEC was chosen to build the system.
"We looked at a lot of different systems as potential candidates. There were systems from vendors that focused on software, and vendors that focused on infrastructures. We narrowed the candidates down to three companies, and finally called on NEC and NEC Software Hokkaido to build the system. The main reasons were that NEC could provide a system that combined both hardware and software, and that we could feel confident in relying on NEC for every stage of implementation, from design to construction and support. Even when membership reaches one million, which we expect that it will, a system based on MailShooter offers the scalability to handle this scale of operations. This was a very important point for us.
"When we got to the actual system construction stage, NEC responded sincerely to meet all our requirements, for example in terms of customization."
Satoru Onishi, also from the Network Promotion Department, talks about the actual status of mail distribution.
"At first, we expected to have about 500,000 members by the end of 2001, but the actual number reached 580,000. If the server was only being used for mail transmissions, MailShooter could distribute 100,000 messages per hour, but the same server also handles communications with the E-commerce site and responses to inquiries from members. Assuming a 10 KB volume of mail, actual mail distribution is thus conducted at a rate of between 30,000 and 40,000 messages per hour."

With system implementation, customers gradually become visible as individuals

Satoru Onishi E-Commerce Project Dept., E-Commerce Div.

Kazunori Ogawa E-Commerce Project Dept., E-Commerce Div.

Four times each year, Cecile sends out catalogs through extensive direct mail operations. Shimoda compares the features of mail order catalogs and the mail magazine targeting CNC members.
"In the case of catalog distribution, there is generally a peak in purchasing one or two weeks after the customers receive the catalogs. The purchasing peak in the case of the mail magazine appears within three days of distribution. This response speed means that we can accurately recognize the best-selling products, which represents a very important function for us; by utilizing E-mail, we can use this information in test marketing activities."
Onishi added the following comments from a marketing perspective.
"With this mail distribution system, we can measure the effects of mailing activities, for example by tracking the links that individual customers have clicked on. This way, by analyzing various data, we can determine the unique characteristics of each customer. Also, by conducting E-mail surveys, we can receive comments from customers, and reflect this information in product selection and sales."
After mail has been transmitted, a certain number of messages are returned for one reason or another. Processing this "error mail" generally requires considerable time and effort.
"There are several possible reasons that mail might be returned," explains Ogawa, "and this system sorts the error mail according to these reasons. As a rule, we know the customer's mailing address, so if there's an error in the e-mail registration, we send the customer a postcard requesting that they update their registration information. In that sense, the new system makes follow-up very easy for us."
The average age range for CNC members is seven or eight years lower than the overall average age range for Cecile's customers. Shimoda says that the operation of the E-commerce site and the mail magazine has brought to light aspects of marketing that had never been seen before.
"Cecile has always practiced one-to-one marketing based on the customers' purchase history on catalog sales. The E-commerce site and the mail magazine have made this aspect of marketing faster and less expensive, and have made it possible to analyze customer response. In the past, this process was limited to analysis of the customer's purchase history, but because the new system can provide us the customer's activities on the purchasing process, we can now see whether the customer has any interest in a given product even before the purchase is made. This has allowed us to develop a more effective marketing approach."

Finding further applications for customer data to tie into business developments

For many customers, the arrival of Cecile's catalog is a very real reminder of the arrival of a new season. And many customers order products via the Internet after selecting the desired item from the traditional catalog. Shimoda talks about the integration of catalogs and IT.
"For the past two years, we have been studying broadband web sites and E-mail operation methods, keeping a close eye on the developments in broadband infrastructures. Even so, we feel that catalogs will be an essential element of our business in the future as well. Our customers look forward to being able to relax and look through our catalogs at their leisure. In that sense, a major issue for us will be to determine how to use E-mail effectively in marketing, as separate from catalog distribution."
We asked Ogawa about the company's specific plans for future improvements to the mail distribution system.
"We are thinking of two areas in particular with regard to developing more effective applications for the mail distribution system. The first is really an operational issue---we feel there is still room for improvement in terms of creating the best possible data in the shortest period of time. The second issue we are studying is the introduction of data analysis tools that will enable us to use customer data more effectively in marketing activities. We believe that with the continuing growth in the number of CNC members, this type of advanced data analysis will be essential to ensuring personalized customer-oriented communications.
Onishi commented on the prospects for membership growth and future business developments.
"We have adopted a number of approaches to increase membership; for example, using the catalog to reach our core customers, offering a point service for customers that use E-commerce shopping or reply to E-mail surveys, and providing services that are only available to CNC members. There is no question that we will exceed the one million member mark by the end of 2003, which is much earlier than our original target. Even now, we have a relative clear understanding of the target groups for CNC memberships, so the system has high utility value as an advertising media. We've had quite a lot of applications from companies as well. When the number of members reaches one million, the system will have even more value as a marketing media."
Shimoda summed up as follows.
"Mail-order sales is an extremely tough business. If you don't get results with each successive season, then you immediately see the effects in reduced sales and profits. On the other hand, we have valuable assets in terms of our many loyal customers, as well as customer data that we have accumulated over the years. Using these assets effectively represents the key to our business success. We believe that effective IT applications will be the main cornerstone that supports business development in the future."