Founded in 1924, the Damiani brand excelled in Italian and International markets, becoming an ambassador of Italian style and a synonym of excellence and the best Italian jewelry tradition. The innovative marketing and communications strategy and the proven experience of the management team are two key elements that contribute to Damiani’s leadership position in the jewelry market sector. With a new customer centric strategy, Damiani is now able to better track different customer needs and tastes and is working to anticipate trends without excluding any channels and making the best consistency between traditional and new media experience.

2. DAMIANI GROUP & THE NEW
CUSTOMER CENTRIC STRATEGY
CRM & CUSTOMER ANALYTICS PROJECT
Social Business Forum - Milan, 7th July 2015
Francesco Giovagnoni
World-wide Marketing Communications and PR Director - Damiani International S.A

3. DIGITAL ADOPTION
3

4. AGENDA
Luxury Industry
Company Overview
Damiani Customer Centric Strategy
Damiani CRM & Analytics Project
Social Listening, Predictive & Machine Learning: the last wave

5. AGENDA
Luxury Industry
Company Overview
Damiani Customer Centric Strategy
Damiani CRM & Analytics Project
Social Listening, Predictive & Machine Learning: the last wave

6. INTRO - LUXURY
NEW CONCEPT OF LUXURY
6

7. HERITAGE – TREASURING – MADE TO MEASURE
NEW CONCEPT OF LUXURY
Patek Philippe Adv
Gucci Institutional Campaign
Damiani Adv
7

8. All the top brands produced in Italy because in this country there is a strong know-how preserved thanks to tradition
that has been passed down during the years.
MADE IN ITALY
NEW CONCEPT OF LUXURY
8

9. DEMOGRAPHICS AND DIGITAL ADOPTION
The key macro-trend impacting luxury market in coming years is generational shift
Altagamma - Bain Luxury Study 12th
edition – October 2013
Baby Boomers
55+
Retired/Retiring mainly
men
Generation X
35-55
At the top of the
carrer
Man and Women
Generation Y
20-35
First earning money/
2nd genration
Only Children
Generation Z
0-20
Spending dadìs money
Spoiled kids
Exclusivity & Status Sense of Belonging Uniqueness
Scarcity 24/7 availability (at click)
Detached Selling Ceremony Tailored Entertainment
Personal Relationship Customer relationship 360° Experience
Bricks & Mortar Multichannel Omnichannel
9

10. DEMOGRAPHICS AND DIGITAL ADOPTION
10

11. Office
PC
Breakfast
Tablet
Transfer
Mobile
Office
PC
Meeting
Tablet
Sleep
Tablet
After
Dinner
TV/Tablet
Lunch
Mobile
CONTINUAL DIGITAL USAGE
11

12. Sales/EUR ml
Cost Structure
Base 100 - Sales
SG&A
Operating
Margin
Brand A
979
100
Brand B
2841
100
Brand C
7671
100
36
47
17
31
38
31
36
17
47
Luxury Goods are a fixed cost business and Scale directly influences the revenues
Source: EXANE BNP
Paribas
SCALE IS KING
12

13. AGENDA
Luxury Industry
Company Overview
Damiani Customer Centric Strategy
Damiani CRM & Analytics Project
Social Listening, Predictive & Machine Learning: the last wave
13

14. DAMIANI GROUP
COMPANY
Damiani is a historic player in the Italian market in the production and sale of jewelry and high-end
watches. Founded in 1924, the Maison Damiani stood out on the Italian market and internationally as
an ambassador of Made in Italy and as a synonym of the best traditional Italian jewelry. Creativity,
excellence, tradition and roots in the gold district of Valenza are the key elements that drive for
almost a century, the company - now led by the third generation of the family - together with a deep
passion for art that has been handed down from father to son.
A worldwide multibrand
company in the Luxury arena.
One of the few brands of Made
in Italy that is not a member of
any group
14

15. THE WORLD OF JEWELRY
TOP Jewelers at Net Sales Retail Equivalent:
Damiani is the 6th
REASEARCH SOLE 24ORE – EXANE BNP PARIBAS
15

16. AGENDA
Luxury Industry
Company Overview
Damiani Customer Centric Strategy
Damiani CRM & Analytics Project
Social Listening, Predictive & Machine Learning: the last wave
16

17. A NEW MARKETING APPROACH
RELATIONAL
MARKETING
ATL vs BTL
17

18. CRM & CUSTOMER EXPERIENCE @ 360°
CRM
CUSTOMER
EXPERIENCE
from
INSIDE-OUT
to
OUTSIDE-IN
18

19. CHALLENGE vs OPPORTUNITIES
Change
Management
Leap Frogging
70% fo the projects fails because of:
1. No support from the top line
2. Ineffective change management
(cultural restrains win)
19

20. DIGITAL STRATEGY: STEP BY STEP
Phase 1 Phase 2 Phase 3 Phase 4
• Ph.1.a New Internet Site –
Adaptive & Google Friendly
• Ph.1.b Data Collection &
Enrichment
• Ph.1.c Social networks
Activities: Facebook
Sub-Phases
Sep.11 Sep.12
• Social Media Development
• New Internet Site Revision
(Responsive)
Oct.13 May.14
• CRM Project Definition
• CRM Sw & Partner
Selection
(Dynamics CRM & NTTsight)
• CRM Project
Implementation
(Unified Customer Management,
Advanced Marketing, Customer
Analytics)
Sep.14
• Customer Service
• Sentiment Analysis and Social Engagement
• Clusterization and “Relational Contact plan” –
on+off
20

21. AGENDA
Luxury Industry
Company Overview
Damiani Customer Centric Strategy
Damiani CRM & Analytics Project
Social Listening, Predictive & Machine Learning: the last wave
21

22. BRAND + Chain MARKETS
DAMIANI
BLISS
ROCCA
EuropeDOS
Wholesale
Partnership
Franchisee
Japan
Americas
Far East
CONTACT
CHANNELS
Stores
Web + e-comm
CS: Call Center
Portal TP
360° VISION OF CUSTOMER
SALES
CHANNELS
SALVINI
NEW SPECIFIC REQUIREMENTS
22

23. CUSTOMER ANALYSIS: SEGMENTATION FOR OBJECTIVS
ACQUISITION DEVELOPMENT RETENTION
HIGHT POTENTIAL
POTENTIAL
HIGHT POTENTIAL
POTENTIAL
TOP
ELITE
PREMIUM
New Clients Active Clients
DORMANT
At Risk
TOT. PURCHASERS EXPENDITURE
23

24. CRM HELP US:
to win new customers or
competitors’ customers
to create a global database
of customers’ data
to keep actual customers
D) cross-selling and up-selling
JOIN BETWEEN TRADITIONAL AND NEW MEDIA
WITHOUT FORGETTING THE JOINING BETWEEN TRADITIONAL AND NEW MEDIA
24

25. MICROSOFT DYNAMICS PROJECT in DAMIANI
ON
www.damiani.com
store.damiani.com
- Tracking navigation of customers on
the web site
- Connection between web surfing
and customer personal data
(if present)
- Exposure
information clients
cluster
OFF
Retail
- Customer Master Data
- Product catalogue
- Stores and Salesforce
- Ticket
ON
Clickdimensions
Email Marketing
- Customized emails
and sms delivery
- Surveys and landing
pages creation
- Feedback on email delivery
(openings and clicks)
- Deliveries and bouncing receipt
ON
Social Networks
- Unique interface
- Contemporary Post
on all Socials
Networks
- URLs reduction
- Tracking of messages received on
socials channels such as Facebook,
Twitter, LinkedIn
- Conversion into customers
- Integration with customer care
- Search by ‘sentiment’
- Link between social profile and
CRM Master Data
25

26. MICROSOFT DYNAMICS CRM & ANALYTICS TOOLS
Phase 1 Phase 2 Phase 3 Phase 4
• Dynamics CRM
Implementation
Output
Oct.13 Mar.14
• Microsoft Social
Listening/Social
Engagement Activation
listen to customers and
influencers conversation online
May.14
• CRM Analytics Tool
(customer intelligence)
Analysis & Database Clustering
Sep.14
• Customer Service Tool
repair management & client
service
Phase 5
Jan.15 Mar.15
• Predictive & Machine
Learning for Clustering,
Churn & Recommendation
first experiments for advanced
RFM Clustering and churn
analysis in first half of 2015
26

27. CUSTOMER ANALYTICS INSIGHT
27

28. Activities:
• Database clustering (i.e. by purchase, boutique, line, product…)
• Marketing lists (i.e. by purchase, boutique, line, product…)
• Email marketing campaigns targeted to specific contacts
(i.e. different products to contacts with particular attitude to purchase)
DEM D.Icon to
prospects and
customers <2K€
DEM Battito d’ali to
customers >2K€
DATABASE CLUSTERING AND DEM
28

29. Purchasing behavior RFM Clusterization Touch point preferenceInterests
• i. e. @ Xmas:
• Earlybirds
• Lastminute
Upselling/Cross
Selling
• Avg Ticket
• potentiality
• Social Listening
• Tracking on web site
• E-comm journey
• DEM results
Macrotrend, Social
Listening
Life-time value Customer
engagement analysis
• Preferred touch points
• Customer engagement analysis
MANAGEMENT OF CUSTOMER RELATION PLAN
29

30. AGENDA
Luxury Industry
Company Overview
Damiani Customer Centric Strategy
Damiani CRM & Analytics Project
Social Listening, Predictive & Machine Learning: the last wave
30

31. MICROSOFT DYNAMICS CRM: SOCIAL ENGAGEMENT
31

32. CRM & TECHNOLOGY
TECHNOLOGY meets
Storage-Compute-Analytics:
• Accessibility and Mobility
• Cloud infrastructure
• Advancedmanagement and analytics tools
32
Descriptive
Analytics
Diagnostic
Analytics
Predictive
Analytics
Prescriptive
Analytics
What
happened?
Why did
it happen?
What will
happen?
How can we
make it happen?
Traditional BI Advanced Analytics

33. PREDICTIVE ANALYTICS: MACHINES LEARNING
Machine Learning is a scientific discipline that studies
and designs algorithms capable of learning from
data, looking for associations and relationships
betweenvariables.
With these algorithms it is possible to perform predictive
analysis based on historical data in order to support
organizationsto achieveknowledgeandabilityto react.
Sales forecasting
Demand forecasting
Sales lead scoring
Marketing mix optimization
Sales
and marketing
33

34. STATISTICAL CLUSTERING METHOD: K-MEANS
Set the number of desired groups, the algorithm according to certain variables will
groupcustomerssimilarto eachotherin clusters.
1
2
3
4
K-MeansSteps:
34

35. RFM ANALYSIS
RFM variables are created for each customer in order to identify a specific purchasing
behavior through the k-mean clustering method. RFM variables are then discretized
into valuesfrom 1 to 5.
• Recency:how recent is the last purchase? [Months]R
• Frequency:how frequently does he buy?[Units]F
• Monetary:how muchdoes hespend? [Euro]M
ManyothervariablesfromCRM can be usedfor clusteranalysisinsteadof RFM, for
example:
- SocialActivity Data
- Web NavigationData
35

36. DATA PREPARATION
Beforewe startto analyzedata,we haveto processthem with some steps:
• Customers with missing values in their recordshave
been removed
Missing values
• Geographic area values have been cleaned and
grouped into macro areas
Transformation
• The Agevariable has beenclassified into rangeof
values
Discretization
• Customers with purchasesolder than 5 years have
been removed
Data selection
Thedatasetusedin this analysisis referredto the beginningof the currentyear.
36

37. CLUSTER RESULT
Clusters defined by the algorithm need to be interpreted. In this case we compare the
average RFM values of every single cluster with the average RFM values of overall
clusters.
RFM
Clusters
Legend:
↑ Over the overall mean
↓ Under the overall mean
Overall Means:
• R = 34 [Months]
• F = 1,6 [Units]
• M = 4.530 [Euro]
Best
• ↓R
• ↑F
• ↑M
• # Cust.
Churn
• ↑R
• ↑F
• ↑M
• # Cust
First time
• ↓R
• ↓F
• ↓M
• # Cust.
Spender
• ↑R
• ↓F
• ↑M
• # Cust
New spender
• ↓R
• ↓F
• ↑M
• # Cust
Uncertain
• ↑R
• ↓F
• ↓M
• # Cust
21
4
13 k
49
2,5
8,4 k
21
1,1
1,4 k
48
1,1
3,4 k
21
1,3
6,9 k
46
1
0,8 k
1,1 k 2,2 k 23,8 k 11,5 k 5,3 k 17,4 k
37

38. CLUSTER ANALYTICS
Segmentationof customerscan be usedto exploretheirfeaturesand create marketingstrategies.
-
5,000
10,000
15,000
20,000
25,000
Best Churn FirstTime NewSpender Spender Uncertain
Avg Monetary by Cluster and Gender
F
M
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Best Churn FirstTime NewSpender Spender Uncertain
Products by Cluster
N of rings
N of necklaces
N of earrings
N of bracelets
Best Churn FirstTime NewSpender Spender Uncertain
Female 1,038 2,146 19,840 4,721 10,458 13,386
Male 75 126 4,046 606 1,113 4,032
-
4,000
8,000
12,000
16,000
20,000
Customer by Cluster and Gender
Female
Male
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
Total Monetary by Cluster and Gender
F
M
38

39. THANKS FOR YOUR ATTENTION
39