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  • Emmanuel : We work with some of the biggest brands in retail, our insight is valued and many brands actively want to work with us. Many relationships between brands and retailers are purely financial – e.g. Manufacturer: “This is the value of my product”,  Retailer: “This is what I want to pay for it”. We help build a relationship between retailer and brand that focusses on the customer.
  • Emmanuel:A month ago Stéphane asked us to help them invest in a smart wayThis is a great example:If you have to invest $1m, customer science will help you to maximise your ROI.As says Simon Hay, dunnhumby CEO: ‘it is tautologic’ price sensitive customers react more to price!!!When you lower price by more than 5%, you have 3 times more elasticity on price sensitive customers than on UM customersThen, the money you save then can be invested on what matters most to your upmarket customers: services & qualityIt is not products that are elastic to price, it is customers!
  • Stéphane:Pricing adjusted to lifestyle and income.It lead to totally reshuffle our pricingapproach vs what we did before 2010Before we have merely the same price index for all products and all stores.Now we are stretching price indexes taking into account importance of each products to PS customers and PS profile of each store.Emmanuel : explanation of the gridStéphane : conclusion on the stretch
  • Emmanuel:This a powerful quiz we use to run with buying teams when we start a partnership to make them understand from their own data how much they need to kill average sales if they want to respond better to their customers’ needs.
  • Emmanuel:This a powerful quizz we use to ask to buying teams when we start a partnership.
  • Emmanuel:We ran a test for 24 weeks. We lowered Grocery prices in the most PS stores and increased them in the most UM stores.What we learnt together is a smart price investment can be profitable because as it increases visits total stores it enabled PS stores to sell more Fresh and non food products and then to increase profit total store.From Monoprix data, we also know that visit is driving much more loyalty than average basket.So when you are increasing prices you decrease long term loyalty.Stéphane:We learnt that price investment or price increase should be owned by the exec as part of the halo effect.You can’t ask categories & stores to bear it.So it means we need to be more accurate in piloting our budgetary process.
  • Emmanuel:At dunnhumby, to measure the impact of our media plan, we run control sample of customers.We run 2 types, one control for each campaign or monthly mailing and we also run a permanent control sample of customers who don’t receive any mailings over the year.It enables us to measure the short term & the long term impact of our media plan.Short term, you can see that Opp. customers are more reactive to our mailings than Loyal customers.But long term, it is the opposite.How many organizations measure the long term impact of their comms?By focusing on short term results, you are not leveraging value.Finally, it is very profitable to reward regularly your best customers.When tracking customer over time, and basing decisions on customers, you’re making better long term decisions.
  • Emmanuel:Very often the DNA of Brands/Marketing teams is all about acquisition.Atdunnhumby, we believe rewarding your best customers can provide the best ROI.This example demonstrates it.We used to target various sets of customers with our product coupons.We discovered the best stretch in terms of additional sales was already on your best customers vsbrandswitchers or not brand buyers at all.We think brands & retailers should balance their customer contact plan.By the way, we can help also on acquisition with our ability to embed our algorithm ‘shoppers like you’.
  • Stephane:For short term profit consideration we have been asking ourselves recently if we should stop free home delivery from stores for our loyalty cardholders.From a short term cost point of view it is a no brainer but we asked dunnhumby to look at the impact on our customers before making this decision.Emmanuel:So we looked at 2 sets of customers with the same behaviour a year before.We identified that for customers who were not using free HD and who are now, they are spending an incremental 32m in sales compared to customers who remained not using FHD. Reversely customers who stopped using FHD spent 34m less than customers still using FHD. Given the additional costs of delivery c.3m, it leads to a +6m in additional margin.Stéphane:So we decided not to stop FHD for Loyalty cardholdersEmmanuel:For me it is another great example of FHD for a multichannel retailer. As a multichannel customer spend much more than single channel ones, if you look at the overall profitability of your customers you don’t need to charge the HD for your best multichannel customers. They will spend even more, in a profitable way for you and you will lock them against competitors such as Amazon.

dunnhumby Monoprix NRF Presentation 2014 dunnhumby Monoprix NRF Presentation 2014 Presentation Transcript

  • Using customer data to increase profits and keep customers for life Stéphane Maquaire, Monoprix CEO Emmanuel Déchelette, dunnhumby France COO #monoprix #edechelette
  • The story we want to tell you ? Who we are Our journey together so far What we want to achieve together now Examples of customer insight based decisions
  • ?
  • ? Our portfolio of stores in France 502 stores 300 86 20 11 6 272 integrated 28 franchisees 61 integrated 25 franchisees 7 integrated 13 franchisees 11 franchisees 4 integrated 2 franchisees Convenience stores Quick & ultra fresh meals in railways stations health and beauty stores Organic food stores City markets All in one place 79 78 integrated 1 franchisee  1800 sq m  300 sq m  70 sq m  50 sq m  140 sq m  250 sq m  30 000 skus  5000 skus  400 skus  500 skus  3 400 skus  4 500 skus End of 2013 4
  • We have a unique market positioning Convenience Stores Supermarkets ? Department Stores Downtown specialized stores 5
  • ? All under one roof Home/Leisure 7% Clothing 14% Non food 34% Health & Beauty 13% Fresh 37% Food 66% Grocery 29%
  • offering a unique shopping experience ?
  • Monoprix ? movie
  • We understand over 400m customers ?
  • © dunnhumby 2013 | Confidential
  • dunnhumby ? movie
  • The customer at the heart
  • Each customer is unique
  • From the push model…
  • …to the pull model
  • Our journey together so far Empower staff to serve customers Collaborative category reviews 2013 Promotional healthcheck Personalized contact plan 2012 Store customer reports Customer pricing 2011 Customer category reviews Customer strategy / engagement 2010 Customer contact plan Customer knowledge 2009 Customer healthcheck
  • Our journey together so far Empower staff to serve customers Collaborative category reviews 2013 Promotional healthcheck Personalized contact plan 2012 Store customer reports Customer pricing 2011 Customer category reviews Customer strategy / engagement 2010 Customer contact plan Customer knowledge 2009 Customer healthcheck
  • Knowing better our customers Shopping Habits Price Sensitivity Lifestyles
  • Our journey together so far Empower staff to serve customers Collaborative category reviews 2013 Promotional healthcheck Personalized contact plan 2012 Store customer reports Customer pricing 2011 Customer category reviews Customer strategy / engagement 2010 Customer contact plan Customer knowledge 2009 Customer healthcheck
  • Understand better our customers 1 Loyal worth 5 Opportunity customers Only 1 out of 10 Opportunity cust. becomes Loyal 43% of Loyal customers are not loyal one year later Multichannel Loyal customers spend 30% more Only 3% of Loyal customers are multichannel
  • Our journey together so far Empower staff to serve customers Collaborative category reviews 2013 Promotional healthcheck Personalized contact plan 2012 Store customer reports Customer pricing 2011 Customer category reviews Customer strategy/engagement 2010 Customer contact plan 2009 Customer healthcheck Customer knowledge
  • Customers at the heart of our corporate strategy Customer Promises Vivement aujourd’hui ! Company commitments Staff requirements
  • Our journey together so far Empower staff to serve customers Collaborative category reviews 2013 Promotional healthcheck Personalized contact plan 2012 Store customer reports Customer pricing 2011 Customer category reviews Customer strategy / engagement 2010 Customer contact plan Customer knowledge 2009 Customer healthcheck
  • Price Sensitive Customers are more elastic to price Additional sales 100% 3x Price sensitive customers Mainstream customers <=5% Upmarket customers 50% 0% -5 - -2% +2 – 5% 40% >=5% -2 - +2% When you lower price by >5%, you have 3x more elasticity on price sensitive customers
  • Our Customer pricing strategy Stores Price Sensitive Upmarket M1 stores M2 stores M3 stores M4 stores Total Price Sensitive P1 104.2 106.1 107.9 109.7 107.1 Products P2 107.5 109.4 111.1 112.8 110.4 P3 109.5 111.2 112.4 114.3 112.0 Total 106.6 108.7 110.4 112.1 109.7 Upmarket 10.2 pts stretch vs 1.9 before
  • Our journey together so far Empower staff to serve customers Collaborative category reviews 2013 Promotional healthcheck Personalized contact plan 2012 Store customer reports Customer pricing 2011 Customer category reviews Customer strategy / engagement 2010 Customer contact plan Customer knowledge 2009 Customer healthcheck
  • A personalized contact plan Monthly spend: Uncommitted (Opp.) Potential (Opp.) 30€ 90€ Good (Loyal) 200€ Best (Loyal) 400€ 600,000 customers contacted every month Each customer receives a unique version Launch of targeted mailings in 2010 10 personalized mailings per year
  • A personalized contact plan Personalized mailing participation rates 2013 2011 70% Personalization increases customer participation over time 58% 60% 2010 2009 50% 43% 40% 28% 30% 20% 10% 5% 3% 1% 0% Best Good Potential
  • Our journey together so far Empower staff to serve customers Collaborative category reviews 2013 Promotional healthcheck Personalized contact plan 2012 Store customer reports Customer pricing 2011 Customer category reviews Customer strategy / engagement 2010 Customer contact plan Customer knowledge 2009 Customer healthcheck
  • A customer report for each store • Key customer profiles & indicators • Benchmark vs. region and comparable stores OBJECTIVE Prioritize actions at store level based on this customer knowledge
  • Our journey together so far Empower staff to serve customers Collaborative category reviews 2013 Promotional healthcheck Personalized contact plan 2012 Store customer reports Customer pricing 2011 Customer category reviews Customer strategy / engagement 2010 Customer contact plan Customer knowledge 2009 Customer healthcheck
  • Category Reviews are Collaborative % manufacturers’ teams agree : % of Monoprix’s teams agree: Did CCR meet your expectations? CCR improve quality of the collaboration? 73% Are CCR adding value to my business? 80% Did CCR improve your relationship with Monoprix? 80% 77%
  • What we want to achieve together now PROFIT Ebit Short term LOYALTY Loyals Retention Long term
  • What we want to achieve together now Respond to what’s most important to our Loyal customers Monoprix and Brands make better decisions based on our customers Improve our price perception by smarter investment for our customers Provide a seamless shopping experience to each customer
  • Kill average! • 1.5l Coca-Cola Reg • 1.5L spring water Monoprix 67% of • Milk 1L ½ skimmed value • 6 fresh eggs Monoprix cardholders didn’t buy any of these products! • Emmental cheese Monoprix 100g • Activia nature 4 x 125 gr • Tissues box Monoprix • Beer Bavaria 50 cl 8,6 • Butter 250 gr Monoprix • 1L orange juice brik Monoprix What is the proportion of customers who didn’t buy any of the Top 10 Food products over 6 months? A. 10% C. 25% B. 33% D. 67%
  • Kill average! Price Sensitive customers Upmarket customers 0! What is the number of products in common between Top 10 Food products for Price Sensitive and Upmarket customers? A. 0 C. 4 B. 2 D. 6
  • Silos vs halo effect Price Sensitive stores Upmarket stores -5.3 +1.4 % Total Grocery additional units +4.9% -1.2% % Total Grocery additional sales +2.5% -0.5% % Total Grocery additional profit +0.1% +0.5% % Total store additional visits +3.5% -2.0% % Total store additional profit +1.7% -1.5% Total Grocery price decrease / increase (in % pts)
  • Short term vs long term Net profit by euro invested 1.7 Opportunity customers Loyal customers 0.6 0.5 0.2 Short term Long term Basing decisions on customers means making better long term decisions
  • Rewarding loyals is profitable Additional sales by euro invested 4.00 € 3.78 € You can stretch your best customers when it is relevant to them 2.93 € 2.00 € .76 € 0.00 € Loyals to the brand Switchers to the brand Category buyers but not to the brand
  • Free home delivery is profitable Same Customers Last Year This Year Uplift in Sales Additional Costs Additional Margin €+32m €+3m €+6m Uplift in Sales Additional Costs Additional Margin €-34m €-3.5m €-6m Same Customers Last Year This Year
  • We are walking as one team
  • In conclusion, to make better decisions Kill average Use long term customer KPIs Capture the halo effect Test & learn Thank You!