Caroline Papadatos, Senior Vice- President, International, LoyaltyOne

1. TURNING RETAIL FOOTFALLS
INTO GAINS
Caroline Papadatos, SVP International & Head of Global Alliances
Retail Leadership Conference, Mumbai, India
February 2013

2. FOOTFALLS
=
CUSTOMERS
=
DATA
=
GAINS

3. ENRICHING CUSTOMER
RELATIONSHIPS
®

4. CUSTOMER’S JOURNEY
Mass Marketing Targeted Marketing Service Management
In-Store Channel Management
Point-of-Sale
Customer Experience

5. MARKETING MEASURES
Awareness %
Facebook Users
Marketing
Reach
Impressions
Market
Segmentation
Demographics

6. RETAIL
FOOTFALLS
=
FINANCIAL
GAINS

7. 1 lac members mentioned their favourites
18,000 Gujaratis 16, 000 Bengalis
4000 GM / Directors 1.67 lacs – Members with 2 children
25,000 members with daughters of marriageable age
900+ million mobile phone users
15,000 Teachers
21,000 Marathis
31,000 Tamilians
6000 Doctors
46 million Indians active on Facebook 13+ million Indian broadband users

8. DATA & ANALYTICS
Contact Data Segmentation
Propensity
Marketing Modeling
Data Trigger-Based
Campaigns
Transactional
Data Geo-Targeting
Social Media Spend Curves
Data
Store
Redemption Assortment
Data Pricing
Optmization

9. LONGITUDINAL CUSTOMER
VIEW Acquisition
Activation %
Lift
Shift
Retention

10. CUSTOMER RETAIL
SCORECARD
Frequency / Sustained Effect
Store Visits – ROI & Pre /
Post
Basket size Lift in spend by engagement
Customer segment
Acquisition
High vs.
Sales
Low INCREMENTAL
Penetration by
Potential spend & retention
segment
Promo Attainability
Responses
By Channel
Sales
ROI
Penetration
Card BRAND
Activation MEASURES BY
Enrollment SEGMENT
Brand Baseline Brand Baseline
(pre) (by segment)
3 Months 6 Months 9 Months 12 Months Future State
Brand Metrics Retail Metrics Loyalty Metrics

11. CAPTURING
CUSTOMER
DATA
INSIGHTS

13. Retail
Customers Loyalty
Performance
Plan A Plan B Plan C
Retail Price Loyalty
Experience Promotions Programs

14. CUSTOMER
IDENTIFICATION
Loyalty Signup
Transactional Device
Data Collection
Behavioral Tracking
Customer Insight

15. ACQUISITION BY LIST, PROFILE
Behavior
Member Base
Best Customers

17. 3 1 1/2
1 12 ~10%
60 50 ~Rs

18. LOYALTY SCORECARD
Low shopping
frequency
Inflated customer – Low member points
Redemption barriers
promise
– Low redemptions
– High expectations
Low customer
engagement
High member signups High liability
– Increased cost – Low return on – High cost
loyalty investment
Price Discounting

19. COALITION BENEFITS
Superior
Currency
=
Footfalls
=
Retail Gains

20. SUPERNOSSO OUTPACED OVERALL MARKET SALES BY 7.5%
Jan 09 to Sep
Supernosso Store Sales, Pre and Post Dotz Oct 09 to
09, Grocer Launch July 09
trending Grocer
4.79% below (% Growth vs. previous year) trending
market 7.5%
Super Nosso YOY Growth Brazil Market YOY Growth
over
Market YOY Growth pre Dotz-launch: 5.4% YOY Growth since Dotz Launch: 13% market
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun ' Jul
'09 '09 '09 '09 '09 '09 '09 '09 '09 '09 '09 '09 '10 '10 '10 '10 '10 10 '10
SN YOY Growth pre Dotz-Launch: 0.7% Market YOY Growth since Dotz-launch: 5.5%
Sources: Abras BR Metrics Grocery sales Trend (www.abras.com.br ) - using the “REAL” numbers for the brazil market YOY growth.

21. CHANGING
CUSTOMER
BEHAVIOR

22. CUSTOMER
RELATIONSHIPS
(RECIPROCITY)
Rewards
Data Recognition
Relevance

23. REWARDS
Dream
Aspirational
Attainable

24. DATA FUELS RELEVANCE
Potential to migrate or
consolidate spend in
Organized Retail
Indicator of increased Grocery
retail spending potential Value Added Spends,
Services on Frequency
smart phone?
Opportunities to drive
Travel Specialty cross-shop between
frequency, Retail Spends, brands
national / Frequency,
international? Preferences
Drive two- % of overall
wheeler, four- spend on
wheeler? credit card?
Premium Which
Indicators of household gas? categories?
spending and Identification of potential for
consumption increased card usage

25. PERSONALIZATION
1:1 tailored
and
relevant
messaging
Ability to
integrate into
broader
marketing
platform Highly
personalized
to individual
locale
Insight into
using Currency more
currency vs. cost-efficient
price (lower offer)
discounts

26. RELEVANCE SELLS

27. RECOGNITION
IMPORTANCE VS. SATISFACTION
40% pt. gap
27

28. Welcoming customers Interaction with Senior management
Teachers from UP understanding the finer Doctors from Ahmedabad & Surat, busy in
details of jewellery manufacturing Diamond Session

29. RESULTS
RAPID-FIRE

30. 3 R’S AT WORK
MCI Friends & Family Program
– 22 members in your “calling circle”
– 10M customers within 24 months
– Market share lift of 6%
– Lower COA
– Higher conversion rate
30

31. Product
Revenue
Assortment
6%
15%
SEGMENTATION

32. Average Basket Size Average Transactions/Member
15%
25%
3 2.7
120 26% 42%
96 2.5
100 1% 1.9
27%
76 2 1.8
80
63 64 1.5 1.4
60
1
40
0.5
20
0
0 DM Responder DM Control
DM Responder DM Control
Pre Promo
Pre Promo
• Promotion lifted average basket size by 25% and average transactions per
member by 15% pre vs. post

33. PROMOTIONAL IMPACT
Lift _ The Power of The Currency1
1 AIR MILES Reward Program, 2008
33
33

34. “POTENTIAL”
Who are my most important Customers?
SEGMENTATION
Most current sales come from Biggest opportunity comes
Families with Children from Active Singles and
Couples
Segment Current Value & Potential Value
Sales $
Value- Famililies Older Familes with Working Active Active Empty Golden
Conscious with Teens Familieis Young Singles Couples Singles Nesters Years
Families Children
Current Sales Potential Sales
Provides the foundations for Customer-Centric strategy by
identifying, quantifying & prioritizing Customer Segments

35. APPAREL & FOOTWEAR RESULTS
AIR MILES AIR MILES
AIR MILES Same store sales annual member
member vs. non-member rewards markets spend increase
vs. rest of Canada during bonus period
84%
82 5.2 62 ROI!
% % %
Average spend / member Same store sales Average spend / member
• On average, Air Miles members responding to bonus offers spend 74% more at a footwear partner
• For example, a four-month bonus offer of 10x the Air Miles at the footwear partner resulted in 62%
increase in annual spend per Collector and 44% increase in spend per transaction, generating a
84% ROI for the retailer
35

36. PRODUCT SEQUENCING
Definitions
Visit #1 Visit #2 Visit #3
Plumbing Drywall Paint Cabinetry
“Sequence Rule: {Plumbing & Drywall} => {Paint} => {Cabinetry}”
• Support (%): 2%
– 2% of collectors purchased Plumbing and Drywall in one visit and then purchased paint and cabinetry
in the next two visits (regardless of any other items purchased in those visits)
• Confidence (%): 20%
– Of those customers that purchase Plumbing and Drywall on one trip and Paint on subsequent trip,
20% purchased Cabinetry after that
• Lift: 3.2
– Collectors who purchase Plumbing and Drywall on one trip and Paint on a subsequent trip are 3.2
times more likely to purchase Cabinetry then people who do not
36

37. PAGE PRODUCTIVITY

38. FOOTFALLS…
MEASUREABLE GAINS
Zone 1 Zone 4
Zone 2 Zone 3

39. FROM LOYALTY TO RETAIL GAINS
Marketing Category &
Operational
Loyalty Effectiveness Product
Optimization
& Efficiency Management
Product Store, Branch &
Customer ID Modeling
Rationalization Online Experience
Enrolment / Activation Segmentation
Product & Category Staff Development
Direct Targeting Direct Marketing Development Real Estate Strategy
Acquisition Improved ROI Improved Margins Return on Capital
Basket Size Improved New Product Reduced
Frequency of Response Rates Innovation Turnover
visits Resource Partner Incremental sales
Spend Allocation Management