1. Orchard Supply Hardware Builds Customer
Loyalty with TIBCO
Improves traffic, transactions, understanding,
and connection
CHALLENGE
Orchard Supply Hardware built its business on legendary customer service, but
now it needed a better way to connect with customers outside of the stores.
“Over the years, we had invested significantly in market research, but it was our
store associates who had the one-on-one customer relationships,” says Roxanne
Joe, director of marketing strategy and analysis at Orchard. “While our marketing
team was quite knowledgeable about industry trends and shopping habits, being
able to point to specific customer attributes and behaviors was beyond our reach.”
SOLUTION
The team decided it needed to expand channels to engage prospects and
customers; newspaper advertising alone was not enough. “Our customer still
reads the Sunday paper, but we had to think ahead to the next generation who
are more digitally oriented,” says Ms. Joe.
The company selected the TIBCO®
Reward platform for email marketing and for
the Club Orchard loyalty program. The platform would be used to help effectively
introduce a new store format, support the growth plan, and show off the Orchard
philosophy of neighbors helping neighbors. The goals: identify and understand
customers; connect with them on a more personal level; increase foot traffic; and
test hypotheses, measure effectiveness, and learn how to serve customers better.
“With our loyalty program,
Club Orchard, members are
spending more than non-
members. We wouldn’t be
able to do what we’re doing
now without this program
and without our partnership
with TIBCO.”
— Roxanne Joe,
Director, Marketing Strategy
and Analysis
DETAIL
2 MILLION
Club Orchard members enrolled
in the first two years

2. SUCCESS STORY | 2
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04/13/15
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BENEFITS
In 12 months, Club Orchard reached a million members. Today, membership
is approximately two million, with more than 10,000 new members joining
every week. “Even with a maturing program, we continue to surpass enrollment
expectations,” says Joe.
IDENTIFYING AND UNDERSTANDING CUSTOMERS
Orchard wanted its loyalty program to benefit customers as much as the company.
“Beyond our store associates striving to know them by name, for decades our
customers shopped without being asked for any contact information. Knowing
that getting email addresses for program identities would be a challenge, we
focus on solidifying our value proposition and providing great training to our in-
store teams,” Ms. Joe says. The company was also concerned that the hardware
store crowd, which appreciates Orchard convenience and quick in-and-out service,
would react negatively to loyalty programs that emphasize coupons, mail-in
rebates, or anything that had the potential to hold up the checkout line.
So, to begin to identify and better understand its customers, Orchard began
by segmenting its database, identifying six revenue-generating groups. Using
the analytic capabilities of the TIBCO platform, the team can focus on specific
groups of customers, identify consumer behaviors, and segment groups based on
past purchases. The data can be used to drive traffic to the stores and incentivize
larger purchases. It also provides a foundation for expanding test and learn
capabilities. Club Orchard is benefiting everyone.
BUILDING STRONGER CONNECTIONS THROUGH EMAIL MARKETING
With its new email capabilities provided by the TIBCO platform, Orchard
established a completely new communications channel to connect with customers
on a more personal level, one to one. “The whole idea is to reach people wherever
they are,” says Joe.
Instead of impersonal newspaper event invitations and offers that have a
strong chance of not being seen at all, each customer is more likely to learn about
promotions and respond. With the personalized email channel, traffic is building,
shoppers know about special offers, and they tend to be more motivated to
browse, shop, and buy. Anonymous transactions have become personal, and
known customers earn rewards and save money.
INCREASING FOOT TRAFFIC, TRANSACTIONS/MEMBER, AND MEASUREMENT
Club Orchard provides points to customers based on how much they spend, and
as a result, the team is seeing increased foot traffic and transactions per member.
Twenty-two percent of all birthday rewards and 21 percent of all point accrual
rewards are redeemed. Club Orchard point accrual purchases bring in more than
twice the revenue as similar non-club offers. The loyalty program is driving a
sizeable percentage of store transactions.
FUTURE
With the success of the loyalty program, the company is expanding Club Orchard
and is committed to continuous learning. With a goal of making customer
communications more relevant, they’re able to test performance of creative
content, specialized promotions, and cross-sell offers to give customers a better
experience. “We’re focusing marketing investment where returns are highest,”
says Joe. “We have a powerful test-bed for gaining insights and extending them,
so we’ll find new ways to drive frequency and build wallet share.”
ORCHARD SUPPLY
HARDWARE
Orchard Supply Hardware
operates neighborhood
hardware and garden stores
focused on paint, repair, and
the backyard. The company
was founded as a purchasing
cooperative in San Jose,
California in 1931. It currently
operates 72 stores in California
and three stores in Oregon, with
stores averaging approximately
32,000 square feet of interior
selling space and 8,000 square
feet of exterior nursery and
garden space.