Belgrade - Retail IT 2014

transcript

Loyalty programs

perceptions

Retail IT Summit

Belgrade, 14.10.2014

george.yankov@explicato.com

www.explicato.comIntroduction

Methodology george.yankov@explicato.com

www.explicato.comThe problem

www.explicato.comThe Problem

So far, I have always missed the customer.

Really?

Yes, just think about it!

www.explicato.comThe Problem: Design

There is a lack of knowledge about the customers

experience, expectations and preferences.

Sometimes the bandwagon effect plays a role, while

other times the projects are led mostly by IT capabilities

instead of business reason.

Last but not least: there are few proper solutions to

measure the results.

A Loyalty system is not a goal, nor a panacea.

www.explicato.comThe Problem: Follow-up

Once started, programs rarely adapt with new features.

Because of IT-driven design, actionable insights remain

buried.

Although the number of people signed up for loyalty

programs may be high, few chains know their

abandonment rate.

Each of these can quickly render a loyalty program redundant.

www.explicato.comThe Problem: Info Gap

Profile of potential and existing customers?

Program’s impact on customers’ usual behavior?

Motivational and value perceptions driving customers to

join loyalty programs?

Best channels to communicate with the customer?

Nowadays, loyalty program design is

a shot in the dark.

www.explicato.comMethodology

and Findings

www.explicato.comExplicato ‘Five Steps’

www.explicato.com

Traditional segmentation dimensions

- gender

- household income

Satisfaction levels of current loyalty program users- uptake status

- participation by industry

- satisfaction levels

Additional information about customer-perceived

value - willingness to join loyalty programs

- decision drivers and expectations

- preferred communication channels

Methodology: Segmentation

www.explicato.comFindings: Motivational perceptions

Motivational drivers for current and future loyalty program

members

- Better spending control 32% vs 36%

- Access to new/modern products 27% vs 23%

- Access to best quality products 11% vs 8%

- Feeling special 2% vs 7%

- Bonus points to spend later 8% vs 5%

- Added layer of confidence 3% vs 5%

- Cross-platform functionality 2% vs 4%

- Longer-lasting shopping pleasure 0% vs 1%

2% see no benefits in being part of a loyalty program

www.explicato.comFindings: Segmented Motivational Drives

Perception of quality in relation to loyalty programs is

lowest in the most desirable market segments –

upper-middle classers between 25 and 55

0% <10%

www.explicato.comFindings: Cross-industry participation

Consumers taking part in loyalty programs in different

industries are still few…

But 65% are interested in cross-platform functionality

37%31%

19%31%

FMCG chainsGas Stations

Both industries

30%14%

Lower-Mid Mid Upper-Mid

www.explicato.comFindings: Is plastic still fantastic?

Loyalty programs are often associated with cards. But a

peek into people’s wallets tells a different story…

Plastic is becoming a thing of the past

42%37%

34%30%

www.explicato.comThe Value Chain

www.explicato.comValue Chain: The big picture

Retailer’s

sales data

Customer basket

analysis

Other SystemsLoyalty SystemPOS System

Retailer IT

infrastructure

Transactional sales

and loyalty data

Incremental data loads

following own designed

data modelPoints

Earn & burn

Discounts

Information

Privilege

www.explicato.comValue Chain: SaaS, Data Warehouse, BI

Client 1 Cube

Client 2 Cube

SSAS/SSRS

Web-based Reports (SSRS)

MS Excel Reports

Client 1 Site

Client 2 Site

Multi Branded

Web Portal

Client 1 User(s)

Client 2 User(s)

Standard Input Format

(extracts)

Unified Data Model

POS System Loyalty System Other Systems

Client s Site

Native Data Formats

www.explicato.comValue Chain: In a nutshell

www.explicato.comQuestion Time

Belgrade - Retail IT 2014

Data & Analytics