technology trends customer insight june 2011

© dunnhumby 2009 | confidential

Customer Marketing

How dunnhumby are helping customers, retailers and manufacturers win

Presentation to the Chartered Institute of Marketing, 9th

June 2011Giles Pavey, Head of Innovation, dunnhumby

2

Winning with customers


customers

Only two sources of competitive advantage:

- the ability to learn more about our

customersfaster than the

competition and

© dunnhumby 2009 | confidential© dunnhumby 2009 | confidential

competition and

- the ability to turn that learning into

actionfaster than the

competitionJack Welch

Jack Welch Former CEO General Electric

9

the customer model


£300m+ revenue from 150+ clients

1010


11


62 MM 75 MM 238 MM 300 MM adults 310 MM 350 MM Customers 500 MM accounts

12


Facebook announcement; Nielsen Netrating of Google Audience estimated for adults only


13



How do you drink from the fire hydrant?


Things should be made as simple as possible, but not


but not simpler

Jack Welch

Albert Einstein

16

How do we do it?


dunnhumby’s blueprint for business success through customer centricity

Data

Insig

ht

Acti

on

Transaction

history

Demo-

graphics

Research

results

Customer

segmentation

Propensity

models

Customer

KPI's

Acquisition

DM

Product

development

Pricing

Strategy

ATL

Advertising

Retention

Ch

an

ges in

Cu

sto

mer

beh

avio

ur

Call centre

dataProspecting

models

lin

k

lin

k


Data

Insig

ht

Acti

on

Retail

strategy

Retention

programmes

Ch

an

ges in

Cu

sto

mer

beh

avio

ur

data

DM

responses

models

Customer

journey

Capture changes in customer behaviour via

data and begin the journey again

18

dunnhumby’s “win win win” approach

Retailer Value Creation

Grow Like for Like sales and Net Margin via better decisions throughout the business

Insights to Suppliers Media to suppliers


Commercialise the unique customer data

asset with suppliers

Sell targeted communications and in

store media to suppliers

More Relevant Customer Experience

Improved channel, promotions, products, prices and communications

19

Customer Data

Customer Insight

Customer Management

Long Term Customer

Loyaltyenables...to

drive...

to

grow...

Customer segmentation Communication strategy

– Retention

Increased Customer

Clubcard has enabled Tesco to know their customers


– Lifestage

– Value & Loyalty

– Lifestyles

– Retention

– Growth

– Win-back / prospecting

Business strategy

– Price

– Promotions

– Ranging

– Availability

Customer Lifetime Value

– Sales growth

2020

this is a friend we know…

– she is a busy young lady

– she looks after her health and loves fresh produce

– she drives to the supermarket on a Saturday morning

– she has a cat

– she doesn’t pay attention to


we know 350m people around the Globe as well as we know Miss Jones

– she doesn’t pay attention to the price of products

– she does look out for promotions

Miss Jones

2121

lifestyles are built from “DNA profiles”

Miss Jones’s DNA Profile: a “time-poor, food-rich” customer – 25,000 products are used to

create a customer’s DNA

– we have a DNA profile for every

single customer

Over-

indexin

g


Under-

indexin

g

Dimensions

Really relevant to customers

● What are the key attributes of the products you choose?

● What are your favourite purchase channels?

● When do you buy?

22


● Promotional Behaviour

● Clubcard Offers

● Clubs

23

Range decisions based on sales AND shopper

metrics

The right product in the right store for the right customers…

• Retain lines popular with loyal

customers even if not top sellers –retain their whole basket

• Range rationalisation based on

Optimised merchandising in cleaning products


Increased facings of lower price

products at stores dominated by price

sensitive shoppers.

Sales increase +16%

Units increase +48%

• Range rationalisation based on product substitutions – remove unnecessary lines, retain unique

lines

• Product mix tailored to the profile of customers that shop the store

24

Winning house brand new product development

540 new lines, designed to win against limited range discount formats

dunnhumby helps by using customer data to analyse

• The most important products for price sensitive / less affluent customers, by category


category

• Into which stores to focus distribution of these products

Results

Between 3% (beauty) and 11% (Household) penetration of weekly users

Typical customer buys 2.1 “discounter” items per week

The Clubcard Statement is at the heart ofTesco’s contact strategy

● c. 15 million customers mailed every quarter

● Delivers in excess of £160m ‘Reward’ to customers

● 7 million variations of product coupon offers

● Significant impact on revenue 6 x per year

● A valuable tool for suppliers – helps off set costs

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● A valuable tool for suppliers – helps off set costs

● dunnhumby provide targeting and coupon sourcing

We run similar customer communications in most of our markets with our retail partners

Voucher redemption: 95%+; product offers : 20%+

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Every till transaction is an opportunity

Deliver relevant offers based on customer’s purchase behaviours over

time and today

dunnhumby source offers both solus

and as part of integrated campaigns

with other media


with other media

Typical redemption: 17.5%

27

In store & on the road

Trolley TalkersPump

Talkers Lorry


In Store TV

Floor Stickers

Coupons @ TillSampling

In store & car park

6 sheets

28

At homeLoyalty

Themed Mailings Magazine


Clubs

Coupons @ Till

Web &

Internet

29


Putting the customer first in the digital world

30


we can populate “my favourites”

from your store shopping

increasing “click through” and

reducing “abandoned” visits

31

credit card tells us more about


strong synergy between

credit card and shopping

drive behaviours in and out of store

credit card tells us more about

how you live your life

gives added benefits

What you buy and when you buy tells us a lot about you

Film buff

Blockbuster lover

Hi-tech

Early adopter

First to buy

Blu-ray £14.99

These purchases indicate radically different customers, even though they are buying the same product


Launch Month 3 Month 12

£11.99 £10.99 £4.99

Film buff

Blockbuster lover

First to buy

Low-tech

Blockbuster buyer

Prepared to wait

Gift purchase

Discount shopper

Mainstream movies

We can replicate this across all categories

F&F Couture sequin jacket £90

F&F Faux leather biker jacket £20

Fashionista

Couture

Small size

High price

New release

High price

High performance

Camera buff

Early adopter

Brand buyer

Canon EOS 7D 15-85 IS £1,899

Nikon D5000 SLR £499


F&F Boyfriend Jacket £18

New release

Low price

Youth culture

Latest craze/trendy

Low price

Promo purchase

Large size

Brand buyer

Promo purchase

5-star review

Upgrade camera

Entry level

Easy to use

Low spec

Long warranty

Sony Cyber-shot W270 £159

Combining this data can help us be predictive of future behaviour in non-food

Previous purchases in same category

Previous purchases of the same product

What you browse & search

What products you click on High

Predictive PowerStated preferences

Browse & search history


Nothing

Grocery purchases

Other purchases in non-food

Predictive Power

Low

Previous purchases in adjacent category

Lifestage and Price Sensitivity

Stated preferences

Predicting what you’ll buy, not when you’ll buy

Understanding how different customers search can tell us where we are winning

Canon EOS

7D

www.which.co.uk

Digital

Camera Digital SLR

First-time buyer

Upgrade customer

Camera buff

Digital Photography


www.which.co.uk

Amazon.comTesco.com

Jessops.com

PURCHASETesco store

Sony.comCanon.com

JohnLewis.com

PURCHASEJohnLewis.com

Review.com

PURCHASEAmazon.com

We can help customers find what they want

This customer has searched ‘kettles’ on Direct

We use what we know…

● Price Sensitive shopper

● Promotions purchaser

● Previously bought Tesco brand small electricals

● Previously bought a silver toaster


● Previously bought a silver toaster

… to deliver RELEVANT RESULTS…

#1 #2 #3 #4 #5

Right offer… …right channel …right customer…

Website

Email

Ensuring we have the right dialogue with each customer will be key

Product Promotions &

Coupons

Category Offers


Clubcard

Email

Mobile

Who gets whatdriven by insight

Catalogue

Who and whenBanner Ads

Messages & Editorial

Supplier Media & Advertorial

38

Coming soon to the UK

Helping me live my lifeOnline Communities


Smart Trolley

E-Cash / Payment vehicles

Offers direct

to phone

Helping me live my life

40


technology trends customer insight june 2011

Business

dunnhumby dunnhumby

accounts dunnhumby

communications dunnhumby

availability dunnhumby

week dunnhumby

indexingdimensions dunnhumby

clubs dunnhumby

clients dunnhumby