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© AbsolutData 2014 Proprietary and Confidential 1
Behavioral segmentation for A leading U.S. Sports goods' retailer
1
A leading U.S. sports goods' retailer captures various customer related Transactional data gathered through Point of Sale
The client had Transactional data for 12 M customers containing variables like: Purchase Characteristics (recency, frequency & monetary value of purchase) Store Level Data Type of Goods/Category Purchased etc
Objectives: Identify a set of distinct & actionable value based customer segments In-depth profiling of these customer segments to understand their needs, attitudes & psychographics Provide actionable insights to customize marketing programs & messaging
Project Background(Situation before we went in)
Initial Diagnosis
© AbsolutData 2014 Proprietary and Confidential 2
A detailed PowerPoint report highlighting the following was delivered to the client: Detailed Profiling of Identified Segments Marketing Strategies for each identified
profitable segment
OutputCollection of Psychographic Data of Customers through Quantitative Research
Behavioral Segmentation using Customer transaction data provided by the client
Detailed Profiling of Customers using Transactional data & Quantitative Research Data
Build Identification Model using the segmentation variables and Customer transaction data provided by the client
Methodology
© AbsolutData 2014 Proprietary and Confidential 3
How do we migrate
customers into the best customer
loyalists segments?
Cross sell in off season
Cross sell in off season
Cross sell in off season
Cross sell in off season
Capture share from other retailers
Capture share from other retailers
Cross sell in other categories
Which customer segments have the highest opportunity for conversion?
For each segment, what is the nature of the opportunity? Why is that the opportunity?
Increase loyalty
Increase GM %
How do we retain or increase share
with our best customer
segments?
Summer Sports2
Winter Sports3
Back to School and Team4
Fitness Equip Purchasers5
Golf Purchasers8
Outdoor Purchasers9
Cherry Pickers
Sports Enthusiasts
Spring Training1*
Workout Apparel Purchasers6
Increase dollar spend
Increase visitsAction Sports Purchaser7
Impact: Case identifying opportunities across key segments – Sample output
(a) *Numbers represent priority order
For each of the seasonal segments, there is an opportunity to increase frequency of visits in the off-season.
Also, they spend less % of their purchases on Workout apparel and Fitness Equipment then Best Customer/Loyalists
Fitness seg. purchases a significant amount from other retailers
Workout seg. are a casual shopper that does not purchase heavily across categories
A leading U.S. sports goods' retailer enjoys healthy share with Action seg. but they don’t visit frequently
Golf seg. makes the majority of their golf purchases at other retailers
Outdoor seg. doesn’t purchase much outside of Outdoor equipment
Cherry pickers carry lower margin than other segments
Need to keep A leading U.S. sports goods' retailer best customer base strong
Based on AbsolutData’s recommendation, the client built loyalty and relationship building
programs for their profitable segments