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Pam Lawson May 27, 2016
LCBO Customer Insights for Sale Customer Insights & CRM
Customer Insights Analytics
Capabilities
• In 1999, LCBO introduced Air Miles rewards as a value-added feature
• Highest penetration loyalty card in Ontario: 75% Air Miles Penetration
The Relationship
• 68% of Air Miles customers purchase at LCBO
• 4.6 Million collectors at LCBO that are Ontario residents.
• 50% of LCBO Customers have Air Miles:
• 54% Vintages, 53% Wines, 37% Beer, 42% Spirits
• Profile: GenX, families, boomers, seniors
• A household card
The Relationship
• Understand what products customers are purchasing, and where and when they’re purchasing them.
• Products and categories
• Stores and regions • Frequency
Air Miles Advantages
• Determine the value/cost of customers.
• Customer value
Air Miles Advantages
• Linkages to other consumer databases
• Demographics • Psychographics • Usage and attitude
studies
Air Miles Advantages
• More effective advertising and promotions through targeting
Air Miles Advantages
• Purchase Cycle • Affinity Analysis • Brand Switching • Top Shoppers • Market Customer
Analysis • Share within a Category • Surveys
Types of Analysis using Air Miles
Purchase Cycle
• Determining average length of time it takes for a customer to make a repeat purchase of the same product
• Usually calculated in days (i.e average/mean/mode # of days) • Helps determine the number of repeat customers vs. single visit customers
• This type of report takes a look at customers before, during, and after, a time period to find out whether a promotion/new brand/price change made an effect.
• Some customers shop in all three time intervals, while others shop only during one or two periods. (Venn diagrams are particularly useful here.)
A/M Customer Profile Previous Promo Post
The Lost X
Cherry-Pickers X
Bar-Stockers X X
Loyalists X X X
Won-Overs X X
Asleep-at-the-Wheel X X
Late-Risers X
The Lost
Late -Risers Cherry Pickers
Bar Stockers
Won-Overs
Brand Switching
(Lost, Loyal & New)
Loyalists
Category
• Products in an AM customer’s basket over a fixed period of time. • What else does a person who buys a particular product normally buys over time.
Affinity Analysis
• These reports usually conducted in conjunction with Brand Switching reports • Explores the story of shoppers who are Loyal, Lost, and New to particular product • What products are these people buying now?
Affinity Analysis/ Sourcing Reports
$3,646,617 $6,675,128
ABCDEF Revenue ABCDEF Non-Top ShoppersABCDEF Top Shoppers
$13
$79
$- $20 $40 $60 $80
$100
ABCDEF Non-TopShoppers
ABCDEF TopShoppers
ABCDEF Average R13 Spend Top Shoppers
For any product, set, subset, etc… we look at the mean spend over a time interval and those customers who spend more than that value are considered as ‘Top Shoppers’.
• Looking specifically at product /set/etc.. combinations • How many AM customers purchased these products together • This report shows the combinations of products purchased by AM collectors
• These reports show the popularity of products bought together. • It’s used to identify promotional operations and for selecting customers to target for email
campaigns
Market Basket &
Customer Analysis
Market Basket &
Customer Analysis
• This report determines how much spend customers allocate towards a subset of a larger set
• i.e. Vintages Releases compared to all of Vintages • Over time, patterns can emerge where spend in certain sets/subsets increase or
decrease
Share within a
Category
• Age • Gender* • Income • Education • Segment • Ethnicity • Engagement level
This information is available through data collected from LCBO surveys. * Air Miles is a household card
Profiling Customers
• Postal Code • Psyte Clusters
Loyalty One shares Postal Codes with LCBO once a year. Psyte HD clusters (Life stage segments by Postal Code) are available through Pitney Bowes.
Surveys
Surveys & POS Data
Examples Where do Top Beer Customers live?
Where do Top Beer Customers live? Surveys & POS Data
Examples
Thank you
May 27, 2016
LCBO PSM Trade Symposium
2.9M Air Miles Collectors are active at LCBO Demographics
17.2% 29.0%
19.7% 18.1%
15.9%
41-50 31-40 19-30
64+ 51-64
Age
Gender
Household with Teen
27.9%
Household with Child
26.2%
Single/Couple
10.5%
Gen Y
4.1% Senior
15.9%
Empty Nester 15.4%
Lifestage Segments
30.3% 30.2%
39.5% Female Other
Male
2.9M Air Miles Collectors are active at LCBO [cont’d]
Air Miles Program Engagement
17.2%
21.3%
9.4%
Mid
Premium
High
Brand Engagement
Dream vs. AM Cash
44.7% 4 - 6 Partners
23.8%
1 - 3 Partners
24.1% 7 - 9 Partners
7.4%
10+ Partners
Collector Tier
Partners Visited
72%
28%
1% 12% 87%
2.9M Air Miles Collectors are active at LCBO [cont’d]
Air Miles Channel Engagement
Contact Language
72% 28% 92% 44% 48%
Mailable Emailable Web Active
EN FR
8%
Mobility
There are some differences by Category
• Beer Collectors tend to be younger than Wine and Spirits Collectors
• Beer and Spirits Collectors tend to be Male • Wine Collectors tend to be Female
• Spirits and Wine Collectors have a longer tenure in the Air
Miles Program than Beer Collectors • Beer and Wine Collectors shop more Partners than Spirits
Collectors
Air Miles Collectors love to earn Air Miles at LCBO
57% Would select WINE with a BAM Offer
over another
Perceptions
58% Have purchased a BAM Offer in the
past
Participation
68% Air Miles
encourages them to collect more Miles
(Baseline: 59%)
Young Adults
We have created segments that Suppliers can leverage to target Collectors based on their engagement at LCBO
• Reward – Always looking for BAM Offers
• Premiumization – Upsell to more premium BAM Offer products
• Frequent Engagement – Target regularly to switch product through bonus
• Occasional Engagement – Target mainly during peak seasons
• Bonus Introduction - Engage with richer BAM Offers on New products
• Growth Potential – Engage with richer BAM Offers on established products
LCBO Collector penetration is very high based on LCBO locations
• Overall, 86% of LCBO Active Collectors live within a 5km radius of an LCBO location
• Top 5 location for Bonus Miles Issuance in
last 12M: 1. Hawkesbury (Store 83) 2. Ottawa (Store 624) 3. Toronto (Store 164) 4. Ottawa (Store 38) 5. Toronto (Store 10)
• This can help improve targeting for in-store tastings with BAM Offer products, and eCommerce BAM Offers
And geo-targeting helps to target based on penetration
• LCBO sees strong Active Collector Penetration in much of the downtown Toronto and Mississauga core (+65%) vs. Overall Air Miles program
• This data can be
combined with BAM Offer Engagement Model for email and DM campaigns to optimize targeting
So, how does a Supplier create a strong BAM offer?
Define the objective 1 Sales Margin Volume
Product Launches
Determine the offers that will change customer behaviour
2 Geo Location
AIR MILES Customer Profiles
Customer Segments
LCBO Engagement Model
TAR
GET
C
ON
TAC
T
AIR MILES Channels
LCBO Channels
Measure the impact and optimize future campaigns 3
Measure Optimize
Examples: Best Offers to drive Sales
Optimal offers:
33
Sales
ROI
Buy 2 Get 5 AM
Buy 2 Get 2 AM
Buy 4 Get 3 AM
Buy 1 Get 1 AM
Offers to Avoid | 1:1 ratio
+
+
- -
Buy 3 Get 4 AM
Offers to Test | Multiples Units
Objective: Sales Category: Beer (single cans)
Examples: Best Offers to drive Margin
Optimal offers:
34
Margin
ROI
Buy 1 Get 8 AM,
Buy 2 Get 25 AM
Buy 2 Get 15 AM
Buy 1 Get 4 AM
Buy 1 Get 10+ AM
Offers to Avoid | Overly rich (Same customer behaviour; Use for product trial offers)
+
+
- -
Buy 500ml Get 4 AM,
Buy 1L Get 10 AM
Offers to Test | Upsell (Move customers to
larger format)
Objective: Margin Category: Spirits (mid)