Lecture 3 Flashcards
Which technology transform customer retail experience?
- Bots
- Augmented Reality
- Blockchain technology
- Predictive Analysis
- Processes and activities of store management, channel and brand management and supplier management.
Processes and activities of store management, channel and brand management and supplier management
Consistent processes and activities across all levels of businesses will bring higher ROI and customer loyalty.
Creating a consistent customer experience
- New channel buying behavior
- Consistent brand message and experience
- Customer-centric
- Data management
- Invest in analytics
New channel buying behaviour
Buy online and pick up in stores etc which requires coordination between e-commerce, supply chain, brick and motar stores, planning, merchandising.
Online channel needs to know inventory available in store that can be offered. Stores should reserve the goods after receiving the order and provide good service.
Supply chain and planning need to have appropriate visibility into the movement of inventory and marketing needs to effectively showcase offering to customer.
Market segmentation
A group of customers who are attracted to the same retail mix as they have similar needs.
Analyze customer data and identify target customers
Retail Analytics
Are applications of statistical techniques and models that seek to improve retail decisions through analysis of customer data.
Such as Data Mining:
is an information processing method that relies on search techniques to discover the buying patterns of customers using large databases.
1. Market basket analysis
items bought during a single trip
2. targetting promotions
insights into assortment decisions and promotions
3. assortment planning
Which products are the most valued customers purchase and ensure that the products are available at all times.
Identify market segment
using life time value (predictive analytics)
Lifetime value (predictive analytics)
Expected contribution from customer to the retailers profit over entire relationship.
- using past behaviors to forecast future purchases, gross margin from purchases and cost associated with value of purchases
- classifying customers based on Frequency, Recency and Monetary value of purchases. (RFM)
Instead of acquiring new customers, prioritize retaining nurturing existing customers.
Recurring revenue > new revenue as it costs less to keep existing customers than to acquire new ones.
Recency
Most likely predictor of who us more likely to respond to an offer. The more recent a customer has made a purchase, the more like will continue.
Remind customers to revisit the business soon
For lapsed customers, can offer then incentive
Frequency
Affected by type of product, price point of product and need to replenish product.
If life cycle can be predicted, marketing efforts could be directed to remind them
Monetary
More emphasis to encourage those to spend more
Better ROI but also alienates customers who are consistent but not spending much
Grouping customers into segments
- How much customers spend
- Seasonality and frequency of purchases
- Basket size of each transaction
- Channel usage
- Categories in which customers purchase
- Discounts vs full price shoppers
- Margin per customer
