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Customer Snapshot: Overview

> 3 Million products offered to manufacturing, automotive and construction customers

When they need maintenance, repair, and operations products (MRO), quickly and at a fair price, small businesses and midsize manufacturing companies across Japan turn to MonotaRO, a leader in the Japanese MRO market – the second largest industrial market in the world.

Company
MonotaRO Co., Ltd.

Revenue
¥34.55 billion (FY 2013) (US$339.46 million)

Number of Employees
~230

Industry
Consumer Products

Headquarters
Amagasaki, Japan

Customer Website
www.monotaro.com/

Line of Business
Marketing

SAP Solutions
SAP InfiniteInsight

Customer Snapshot: History

No Small Venture

Customer Snapshot: Business Model

Broad Supplier Network

MonotaRO sells maintenance, repair, and operations (MRO) products, to small and midsize manufacturing companies through their online channel and product catalogs. The company works with over 1,000 suppliers across Japan and imports goods from more than 10 countries. Thanks to this broad network of suppliers, MonotaRO can provide more than 3,000,000 high-quality products to their customers – quickly and at a reasonable price.

Customer Snapshot: Success Strategy

Continuously Improving Customer Experience

MonotaRO aims to set new standards in the business of MRO procurement and continuously optimizes operations to maintain strong partnerships within the manufacturing industry. Thanks to a well-managed distribution channel, customers benefit from same-day shipping for many of the company’s most popular products. MonotaRO also operates a customer care center and regularly gathers feedback to improve customer experience.

The Challenge

Successfully Targeting Customers

In an attempt to better market their millions of products to more than 1.3 million customers, MonotaRO wanted to significantly improve the targeting accuracy of the catalogs, pamphlets, and online offers that they send to customers on a regular basis. Targeting the right customer with the right offer used to be a challenge for the company, due the rapid pace of the business and the complexity of their customers’ needs. Given the vast number of factors that can influence a customer’s decision in the manufacturing industry, it was a challenge to take all of these into account and to draw the right conclusions in a timely manner.

After evaluating options to deploy advanced analytics technology that can scale to meet rapid growth, MonotaRO made the strategic decision to start innovating in the area of predictive analytics.

Enter SAP

Anticipating the Needs of the Customer

MonotaRO deployed the SAP® InfiniteInsight® solution to analyze data, discover rules and patterns, and create predictive models. Established as the company’s first-ever semantic layer for predictive modelling, marketing employees no longer have to rely on manual and error-prone processes. With the automated creation of predictive models, individuals no longer spend time trying to connect all the dots in an attempt to understand what customers actually want – instead they can focus on creating the right offer for unique customers.

Enter SAP: The SAP Experience

Analyzing all the Variables

SAP InfiniteInsight has dramatically simplified the process of analyzing customer data in order to anticipate their needs and preferences. The solution allows users to leverage over 2,500 variables and to aggregate data from over 12 million transactions and 1.3 million customer records to identify the most impactful factors to improve the success of direct mailing campaigns and online offers.

Better Business

Predicting with Great Accuracy

The move to predictive analytics has led to a superior ability to accurately address rapidly changing market conditions and customer preferences. MonotaRO can now create more targeted campaigns to support sales across a wide range of channels including fax, e-mail, catalogs, pamphlets, and the corporate website.

Better Business: Benefits

Results that are Off the Chart

Up to 200%

Increase in sales with campaigns backed by predictive analytics, making predictive modeling a contributing factor to 5% of annual revenue. 

>500

Marketing campaigns optimized annually for customer aquisitions and cross-sell and up-sell activities.

1,000%

Boost in predictive model productivity, compared to previous tool, which took a month for data preparation and another 2 to 3 weeks to build a single model.

Better Business: Run Simple

Customizing Customer

Today, the SAP® InfiniteInsight® solution helps MonotaRO gain deeper insight into their customer base, leading to a significant increase in sales for campaigns backed with predictive analytics. By analyzing the buying behavior of their 1.3 million customers, MonotaRO can now provide customized communications and recommendations to every customer. The company believes that this is one of the reasons why many customers come back and continue to rely on MonotaRO for their MRO needs.

Sales are up nearly 200% thanks to SAP InfiniteInsight. – Masaya Suzuki, President and CEO, MonotaRO Co. Ltd.

Journey Ahead

Only the Beginning

And MonotaRO does not stop there. The ability to identify actionable trends and patterns will not only help the company boost sales for their existing catalog of products. The company also intends to leverage the insight gathered to further improve their product assortment and to develop new offerings to customers, based on their individual needs and preferences.

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