If a retailer has taken the expense to implement a loyalty program, it is important for them to capitalize on the gold mine of consumer information they possess. With the loyalty data and transactions integrated into a solution, insights become accessible. ToolBox Solutions recommends the following types of analysis to better understand the shopper and how to meet their needs.
1) A demographic profiling review to understand overall appeal and how various categories appeal to different demographic segments. Purchase behaviour across segments such as age, gender and price sensitivity is used to validate assortment decisions and ensure that assortments continue to target a range of shoppers. Use it to see whether marketing efforts to a demographic segment impact penetration and sales for them.
2) A cross shop analysis that identifies what brands have loyal and exclusive shoppers and should have their products carried in higher distribution. It also identifies where substitution of brands is possible if two brands interact highly with each other. This would be excellent to validate delisting decisions to drives space for more private label products.
3) The performance of a category can be decomposed into changes in a) customers through customer penetration and b) changes in spend per customers through basket size, transaction frequency, units per transaction and unit price. This method adds far more colour to understanding the category and true drivers of performance especially when filtered on a demographic segment in a region.
4) Innovation which will be an important aspect of private label growth for retailers in upcoming years is best evaluated through measuring the amount of triers that can be attracted for a product and how many of them convert into repeat purchasers who are loyal to the product. It can also gauge the success of innovation before it is fully distributed to ensure the best items are being added to stores which have small square footage and limited space.
5) Cross promotion opportunities and understanding of the shopping mission that customers are on should be derived through analyzing transactions to determine the affinity of one product to another. Standard practice is to compare the percentage of co-purchases between two products versus the penetration of baskets that they have separately to derive a significance index. When used for products during a promotion, the analyst can determine the products that truly drove traffic into stores.
With Advantage Loyalty from ToolBox Solutions, all of these analyses are rapidly available for a retailer that is committed to understanding and servicing their customers!
Tags: assortment analysis, assortment optimization, loyalty data, loyalty programs, retail analytics, ToolBox Advantage