Loyalty one webinar Delivering on the Promise of Shopper-Centricity 2013-07_23

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Customer Centricity Fuels Sustainable Growth by Graeme McVie, LoyaltyOne US Vice President Two main trends in the retail environment are driving the need for a customer-centric approach: heightening customer expectations, and evolving & expanding competition. When properly implemented on an enterprise-wide level, customer-centricity can capture a larger share of customer spend, loyalty – and profits. See how.

Transcript of Loyalty one webinar Delivering on the Promise of Shopper-Centricity 2013-07_23

PowerPoint Presentation

Delivering on the Promise of Shopper-Centricity

July 23, 2013

Graeme McVie VP & GM, Business Development & Client Service

gmcvie@loyalty.com; 301 652 0694

The Path to True Sustainable Competitive Advantage

All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited. Page 2 Page 2

Well address the question: Do retailers really need to become more shopper-centric?

Showcase best practice approach to shopper-centricity

Layout roadmap to become more shopper-centric while achieving shorter-term objectives

1 2 3

Do retailers really need to become more shopper-centric?

All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited. Page 4 Page 4

POLL QUESTION

Whats your opinion?

1. Retailers use shopper data when making decisions: a) All of the time b) Most of the time c) Some of the time d) Rarely e) Never

All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited. Page 5 Page 5

POLL RESPONSES

0% 10% 20% 30% 40% 50%

a)All of the time

b)Most of the time

c)Some of the time

d)Rarely

e)Never

Retailers use shopper data when making decisions (% of Responses):

All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited. Page 6 Page 6

Commodity Price Changes Over Last Decade

+271% +189%

+279% +327%

WHEAT CORN

SUGAR CRUDE OIL

All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited. Page 7 Page 7

U.S. Consumer Spending (Year Over Year % Change) 2000 2010

~-1%

~+3%

All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited. Page 8 Page 8

Five 24%

Six 28%

Seven 19%

Eight 5%

One 1%

Two 2%

Three 7%

Four 14%

Consumers are shopping multiple channels .

3%

8%

8%

14%

21%

24%

31%

35%

35%

36%

I purchase my groceries online andhave them delivered

I research products on blogs

I use social media sources to researchproducts

I look for updates fromretailers/manufacturers via email

I visit online deal sites

I research products on websites

I download coupons from couponingsites

I download coupons from retailerwebsites

I download coupons frommanufacturer websites

I download recipes off websites

and are doing more research on the internet

# of Channels Shopped % of Consumers

All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited. Page 9 Page 9

Traditional retailers are stepping up

their game

Safeway: Lifestyle stores, Just4U

Kroger: Targeted marketing, Vendor Collaboration

Walgreens: Loyalty program launch

New types of competitors are gathering pace

Amazon: Selling groceries, opening DCs close to urban areas, offering same day delivery

Alice: Enabling manufacturers to sell directly to consumers

Drugstore.com: Online pure play with niche offering

Target: Red Card, targeted marketing, new localized formats/assortments

Alternative formats are proliferating

Aldi: Ultra low cost, lots of private label

Whole Foods: Organic, fresh, healthy

Club stores: Low prices, larger pack sizes

Dollar stores: Lots of stores, simple prices, small foot print

All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited. Page 10 Page 10

Focus Still Mainly on Quarterly Financial

Objectives

Shopper Insights not Sufficiently Specific

or Timely

In the past, shopper insights grouped shoppers into large generic segments reducing relevance and value

Static shopper insights did not allow for changes in behavior over time

Shopper Insights not Easily Connected to

Actions

Disconnect between shopper insights and concrete actions

Decision-makers have to use judgment to translate insights into actions

Negative Feedback Loop

Retailers need to hit their quarterly financial objectives

Using the same tried-and-trusted approaches minimizes short-term risks

Limited appetite exists to fix the car while driving it

All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited. Page 11 Page 11

POLL QUESTION

Whats your opinion? 2. Which of the following decision areas do you

believe makes best use of shopper data on a regular basis when making decisions:

a) Corporate strategy b) Merchandising c) Marketing d) Store Operations e) Real estate planning f) Supply chain/logistics

All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited. Page 12 Page 12

POLL RESPONSES

0% 10% 20% 30% 40% 50% 60%

a)Corporate strategy

b)Merchandising

c)Marketing

d)Store Operations

e)Real estate planning

f)Supply chain/logistics

Which of the following decision areas do you believe makes best use of shopper data on a regular basis

when making decisions (% of Responses):

All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited. Page 13 Page 13

Merchandising

Marketing

Store Operations

Traditional Focus

Performance Objectives

Category-centric

Campaign-centric

Store-centric

Category sales & profit

Campaign response

Store sales & direct store costs

All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited. Page 14 Page 14

Store

Week 1

All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited. Page 15 Page 15

Week 2

Store

All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited. Page 16 Page 16

Store

Week 3

Organic Milk

All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited. Page 17 Page 17

All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited. Page 18 Page 18

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