LCBO Customer Insights for Sale Customer Insights & CRM Pam - PowerPoint PPT Presentation

LCBO Customer Insights for Sale Customer Insights & CRM Pam Lawson May 27, 2016

Customer Insights Analytics Capabilities

The Relationship • In 1999, LCBO introduced Air Miles rewards as a value- added feature • Highest penetration loyalty card in Ontario: 75% Air Miles Penetration

The Relationship • 68% of Air Miles customers purchase at LCBO • 4.6 Million collectors at LCBO that are Ontario residents. • 50% of LCBO Customers have Air Miles: • 54% Vintages, 53% Wines, 37% Beer, 42% Spirits • Profile: GenX, families, boomers, seniors • A household card

Air Miles Advantages • Understand what products customers are purchasing, and where and when they’re purchasing them. • Products and categories • Stores and regions • Frequency

Air Miles Advantages • Determine the value/cost of customers. • Customer value

Air Miles Advantages • Linkages to other consumer databases • Demographics • Psychographics • Usage and attitude studies

Air Miles Advantages • More effective advertising and promotions through targeting

Types of Analysis using Air Miles • Purchase Cycle • Affinity Analysis • Brand Switching • Top Shoppers • Market Customer Analysis • Share within a Category • Surveys

Purchase Cycle • Determining average length of time it takes for a customer to make a repeat purchase of the same product • Usually calculated in days (i.e average/mean/mode # of days) • Helps determine the number of repeat customers vs. single visit customers

Brand Switching (Lost, Loyal & New) A/M Customer Profile Previous Promo Post X The Lost The Lost Cherry-Pickers X X X Bar-Stockers Bar Stockers Loyalists X X X Loyalists Cherry X X Won-Overs Late -Risers Pickers Won-Overs Asleep-at-the-Wheel X X Late-Risers X • This type of report takes a look at customers before, during, and after, a time period to find out whether a promotion/new brand/price change made an effect. • Some customers shop in all three time intervals, while others shop only during one or two periods. (Venn diagrams are particularly useful here.)

Affinity Analysis Category • Products in an AM customer’s basket over a fixed period of time. • What else does a person who buys a particular product normally buys over time .

Affinity Analysis/ Sourcing Reports • These reports usually conducted in conjunction with Brand Switching reports • Explores the story of shoppers who are Loyal, Lost, and New to particular product • What products are these people buying now?

Top ABCDEF Average R13 Spend ABCDEF Revenue Shoppers ABCDEF Non-Top Shoppers $100 $79 ABCDEF Top Shoppers $80 $60 $40 $13 $20 $6,675,128 $3,646,617 $- ABCDEF Non-Top ABCDEF Top For any product, set, Shoppers Shoppers subset, etc… we look at the mean spend over a time interval and those customers who spend more than that value are considered as ‘Top Shoppers’.

Market Basket & Customer Analysis • Looking specifically at product /set/etc.. combinations • How many AM customers purchased these products together • This report shows the combinations of products purchased by AM collectors • These reports show the popularity of products bought together. • It’s used to identify promotional operations and for selecting customers to target for email campaigns

Market Basket & Customer Analysis

Share within a Category • This report determines how much spend customers allocate towards a subset of a larger set • i.e. Vintages Releases compared to all of Vintages • Over time, patterns can emerge where spend in certain sets/subsets increase or decrease

Surveys Profiling Customers • Age • Gender * • Income • Postal Code • Education • Psyte Clusters • Segment • Ethnicity Loyalty One shares Postal Codes • Engagement level with LCBO once a year. This information is available Psyte HD clusters (Life stage through data collected from LCBO segments by Postal Code) are surveys. available through Pitney Bowes. * Air Miles is a household card

Surveys & Where do Top Beer Customers live? POS Data Examples

Surveys & Where do Top Beer Customers live? POS Data Examples

Thank you

LCBO PSM Trade Symposium May 27, 2016

2.9M Air Miles Collectors are active at LCBO Demographics Gender Lifestage Segments Gen Y Single/Couple Senior 4.1% Male 39.5% 15.9% 10.5% Female 30.2% Other 30.3% Empty Nester 15.4% Age 26.2% 15.9% 19-30 18.1% 31-40 19.7% 41-50 Household with Child 29.0% 51-64 27.9% 17.2% 64+ Household with Teen

2.9M Air Miles Collectors are active at LCBO [cont’d] Air Miles Program Engagement Dream vs. AM Cash Collector Tier 1% 12% 87% 72% 28% 10+ Partners Brand Engagement Partners Visited 1 - 3 Partners 7.4% 23.8% 24.1% 9.4% Premium 7 - 9 Partners High 17.2% 21.3% Mid 4 - 6 Partners 44.7%

2.9M Air Miles Collectors are active at LCBO [cont’d] Air Miles Channel Engagement Contact Language 28% 44% 48% 8% 72% 92% EN FR Mailable Emailable Web Active Mobility

There are some differences by Category • Beer Collectors tend to be younger than Wine and Spirits Collectors • Beer and Spirits Collectors tend to be Male • Wine Collectors tend to be Female • Spirits and Wine Collectors have a longer tenure in the Air Miles Program than Beer Collectors • Beer and Wine Collectors shop more Partners than Spirits Collectors

Air Miles Collectors love to earn Air Miles at LCBO Participation Perceptions Young Adults 68% 57% 58% Air Miles Would select WINE Have purchased a encourages them to with a BAM Offer BAM Offer in the collect more Miles over another past (Baseline: 59%)

We have created segments that Suppliers can leverage to target Collectors based on their engagement at LCBO • Reward – Always looking for BAM Offers • Premiumization – Upsell to more premium BAM Offer products • Frequent Engagement – Target regularly to switch product through bonus • Occasional Engagement – Target mainly during peak seasons • Bonus Introduction - Engage with richer BAM Offers on New products • Growth Potential – Engage with richer BAM Offers on established products

LCBO Collector penetration is very high based on LCBO locations • Overall, 86% of LCBO Active Collectors live within a 5km radius of an LCBO location • Top 5 location for Bonus Miles Issuance in last 12M: Hawkesbury (Store 83) 1. Ottawa (Store 624) 2. Toronto (Store 164) 3. Ottawa (Store 38) 4. Toronto (Store 10) 5. This can help improve targeting for in-store • tastings with BAM Offer products, and eCommerce BAM Offers

And geo-targeting helps to target based on penetration • LCBO sees strong Active Collector Penetration in much of the downtown Toronto and Mississauga core (+65%) vs. Overall Air Miles program • This data can be combined with BAM Offer Engagement Model for email and DM campaigns to optimize targeting

So, how does a Supplier create a strong BAM offer? 1 Define the objective Product Sales Margin Volume Launches TARGET Determine the offers that AIR MILES 2 Customer Geo LCBO Engagement Segments Location Customer Profiles Model will change customer behaviour CONTACT LCBO AIR MILES Channels Channels Measure the impact and 3 optimize future campaigns Measure Optimize

Examples: Best Offers to drive Sales Optimal offers: Objective: Sales + Category: Beer (single Buy 2 Get 5 AM cans) Offers to Test | Multiples Units Buy 2 Get 2 AM  Sales Buy 3 Get 4 AM Buy 4 Get 3 AM Offers to Avoid | 1:1 ratio  Buy 1 Get 1 AM - - + ROI 33

Examples: Best Offers to drive Margin Objective: Margin Optimal offers: Category: Spirits Offers to Test | Upsell (Move customers to + (mid) larger format) Buy 2 Get 15  Buy 500ml Get 4 AM AM, Buy 1 Get 8 Buy 1L Get 10 AM AM, Margin Buy 2 Get 25 Offers to Avoid | Overly rich AM (Same customer behaviour; Buy 1 Get 4 AM Use for product trial offers)  Buy 1 Get 10+ AM - - + ROI 34