Technology Trends Customer Insight June 2011

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Technology Trends Customer Insight, a copy of the presentation delivered by Giles Pavey, Head of Retail Solutions, dunnhumby from the CIM East of England Summer Marketing Conference held on 9 June 2011 at ARU, Chelmsford

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<ul><li> 1. Customer MarketingHow dunnhumby are helping customers,retailers and manufacturers winPresentation to the Chartered Institute of Marketing, 9thJune 2011Giles Pavey, Head of Innovation, dunnhumby dunnhumby 2009 | confidential</li></ul> <p> 2. 2Winning withcustomers dunnhumby 2009 | confidential 3. Only two sources ofcompetitiveadvantage:- the ability to learn more about our customersfaster than the competition and - the ability to turnthat learning into action faster than the Jack Welch Jack Welch Former CEO General Electric competition dunnhumby 2009 2009 | confidential dunnhumby | confidential 4. dunnhumby 2009 | confidential 5. dunnhumby 2009 | confidential 6. dunnhumby 2009 | confidential 7. dunnhumby 2009 | confidential 8. dunnhumby 2009 | confidential 9. 9the customer model dunnhumby 2009 | confidential 10. 10300m+ revenue from 150+ clients dunnhumby 2009 | confidential 11. 1162 MM75 MM 238 MM 300 MM adults 310 MM 350 MM Customers 500 MM accounts dunnhumby 2009 | confidential 12. 1262 MM75 MM 238 MM 300 MM adults 310 MM 350 MM Customers500 MM accounts Facebook announcement; Nielsen Netrating of Google Audience estimated for adults only dunnhumby 2009 | confidential 13. 1362 MM75 MM 238 MM 300 MM adults 310 MM 350 MM Customers 500 MM accounts dunnhumby 2009 | confidential 14. How do you drink from the fire hydrant? dunnhumby 2009 2009 | confidential dunnhumby | confidential 15. Things should bemade as simple as possible,but notsimpler Jack Welch Albert Einstein dunnhumby 2009 2009 | confidential dunnhumby | confidential 16. 16How do we do it? dunnhumby 2009 | confidential 17. dunnhumbys blueprint for business success throughcustomer centricity AcquisitionDM Changes in behaviour Transaction CustomerCustomerAction history ProductInsightsegmentation developmentDataDemo- Propensity graphics PricingmodelsStrategy Research Customerresults link link KPIsATL AdvertisingCall centreProspecting datamodelsRetention DMprogrammes Customerresponsesjourney Retail strategy Capture changes in customer behaviour viadata and begin the journey again dunnhumby 2009 2009 | confidential dunnhumby | confidential 18. 18 dunnhumbys win win win approach Retailer Value CreationGrow Like for Like sales and Net Margin via better decisions throughout the businessInsights to Suppliers Media to suppliers Commercialise the unique customer dataSell targeted communications and in asset with suppliersstore media to suppliersMore Relevant Customer Experience Improved channel, promotions, products, prices and communications dunnhumby 2009 | confidential 19. 19Clubcard has enabled Tesco to know their customersLong TermCustomer CustomerCustomerto to CustomerDataInsightManagementenables... drive...grow... LoyaltyCustomer segmentation Communication strategy IncreasedLifestage RetentionCustomer Growth Lifetime ValueValue &amp; Loyalty Win-back / prospecting Sales growthLifestylesBusiness strategy Price Promotions Ranging Availability dunnhumby 2009 | confidential 20. 20this is a friend we know she is a busy young lady she looks after her health andloves fresh produce she drives to the supermarketon a Saturday morning she has a cat she doesnt pay attention tothe price of productsMiss Jones she does look out forpromotions we know 350m people around the Globe as well as we know Miss Jones dunnhumby 2010 | confidential 21. 21lifestyles are built from DNA profilesMiss Joness DNA Profile: a time-poor, food-rich customer 25,000 products are used tocreate a customers DNA we have a DNA profile for everysingle customerOver-indexingUnder-indexingDimensions dunnhumby 2010 | confidential 22. 22Really relevant to customers What are the key attributes of the products you choose? What are your favourite purchase channels? When do you buy? Promotional Behaviour Clubcard Offers Clubs dunnhumby 2009 | confidential 23. 23Range decisions based on sales AND shoppermetrics Optimised merchandising incleaning products The right product in the right store for the right customers Retain lines popular with loyal customers even if not top sellers retain their whole basket Range rationalisation based on product substitutions remove unnecessary lines, retain unique Increased facings of lower price lines products at stores dominated by price Product mix tailored to the profile sensitive shoppers. of customers that shop the store Sales increase +16% Units increase +48% dunnhumby 2009 | confidential 24. 24Winning house brand new product development540 new lines, designed to winagainst limited range discountformatsdunnhumby helps by using customerdata to analyse The most important products for pricesensitive / less affluent customers, bycategory Into which stores to focus distributionof these productsResultsBetween 3% (beauty) and 11%(Household) penetration of weekly usersTypical customer buys 2.1 discounteritems per week dunnhumby 2009 | confidential 25. 25The Clubcard Statement is at the heart ofTescos contact strategy c. 15 million customers mailed every quarter Delivers in excess of 160m Reward to customers 7 million variations of product coupon offers Significant impact on revenue 6 x per year A valuable tool for suppliers helps off set costs dunnhumby provide targeting and coupon sourcingVoucher redemption: 95%+;product offers : 20%+ We run similar customer communications in most of our markets with our retail partners dunnhumby 2009 | confidential 26. 26Every till transaction is an opportunity Deliver relevant offers based on customers purchase behaviours over time and today dunnhumby source offers both solus and as part of integrated campaigns with other mediaTypical redemption: 17.5% dunnhumby 2009 | confidential 27. 27In store &amp; on the roadPump Trolley TalkersTalkersLorry 6 sheetsIn Store TVFloor StickersSampling Coupons @ TillIn store &amp; car park dunnhumby 2009 | confidential 28. 28At homeLoyaltyThemed MailingsMagazineWeb &amp;Internet Coupons @ TillClubs dunnhumby 2009 | confidential 29. 29 Putting thecustomer first inthe digital world dunnhumby 2010 | confidential 30. 30we can populate my favourites from your store shopping increasing click through andreducing abandoned visits dunnhumby 2010 | confidential 31. 31credit card tells us more abouthow you live your lifegives added benefitsstrong synergy betweencredit card and shoppingdrive behaviours in andout of store dunnhumby 2010 | confidential 32. What you buy and when you buy tells us a lot about youFilm buffBlockbuster loverThese purchases indicate radicallyHi-techdifferent customers, even though theyEarly adopterare buying the same productFirst to buy Blu-ray 14.99Film buff Blockbuster buyerDiscount shopperBlockbuster lover Prepared to wait MainstreamFirst to buyGift purchasemoviesLow-tech11.99 10.99 4.99 Launch Month 3 Month 12 dunnhumby 2010 | confidential 33. We can replicate this across all categories F&amp;F Couture sequin jacket 90 Canon EOS 7D 15-85 ISFashionista1,899High priceCouture High performanceSmall sizeCamera buffHigh priceEarly adopter F&amp;F Faux leatherbiker jacket 20 Nikon D5000 SLR 499New release Brand buyerLow price Promo purchaseYouth culture 5-star reviewUpgrade cameraF&amp;F Boyfriend Jacket Sony Cyber-shot W270 18 159Latest craze/trendy Entry levelLow price Easy to usePromo purchaseLow specLarge sizeLong warranty dunnhumby 2010 | confidential 34. Combining this data can help us be predictive offuture behaviour in non-food What products you click onHigh What you browse &amp; search Previous purchases of the same product Browse &amp; search history Previous purchases in same category Stated preferences Predictive Power Previous purchases in adjacent category Lifestage and Price Sensitivity Other purchases in non-food Grocery purchases Nothing LowPredicting what youll buy, not when youll buy dunnhumby 2010 | confidential 35. Understanding how different customers searchcan tell us where we are winningDigitalCanon EOSCamera Digital SLR7DFirst-timeUpgradeCamerabuyer customerbuffDigital Photography www.which.co.ukReview.com Amazon.com Sony.com PURCHASETesco.comCanon.com Amazon.com Jessops.com JohnLewis.comPURCHASE PURCHASETesco storeJohnLewis.com dunnhumby 2010 | confidential 36. We can help customers find what they want This customer has searched kettles on Direct We use what we know Price Sensitive shopper Promotions purchaser Previously bought Tesco brand small electricals Previously bought a silver toaster to deliver RELEVANT RESULTS#1 #2 #3 #4#5 dunnhumby 2010 | confidential 37. Ensuring we have the right dialogue with eachcustomer will be keyRight offer right customerright channelProduct Promotions &amp; Coupons Website Category Offers Banner Ads Email Who gets whatWho and whendriven by insightMessages &amp; Editorial Catalogue MobileSupplier Media &amp;Advertorial Clubcard dunnhumby 2010 | confidential 38. 38Coming soon to the UKOnline Communities Helping me live my life Smart TrolleyE-Cash / Payment vehiclesOffers direct to phone dunnhumby 2009 | confidential 39. 39Thank you giles.pavey@dunnhumby.comGilesPavey on Twitter dunnhumby 2010 40. 40 dunnhumby 2010 | confidential</p>