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How a Retailer Creates Customer Value Through Segmentation, Targeting and Activation

By: Marco Colombo, Solution and Innovation Director, IRI

Establishing customer value is a crucial aspect of retailer marketing. Today, many organizations segment their customers by their RFM values (recency, frequency and monetization buying traits) as a way of understanding total customer value. The path to growth is a combination of many factors, and when done correctly, it can lead to significant increases in sales lift.

At IRI’s 2019 European Summit earlier this year, I presented with Conad on the customer value and segmentation strategies implemented in its stores. Conad is the largest supermarket retail chain in Italy with more than 3,000 stores and operating as a cooperative system since 1962. The retailer is structured across three levels: entrepreneur members (owners of retail outlets), cooperatives (large-scale distribution centers) and the national consortium (a service and market-oriented body for member companies). Since 2009, Conad has seen immense growth due to its unique structure, developing strong relationships with the local community and strategically placing stores close to where shoppers live and shop.

Conad Reshapes Stores with Shopper Focus

Conad’s strategy is focused on transforming stores from places where shoppers can purchase products to stores where shoppers can find solutions for their needs. To keep up with the evolving consumer shopping landscape, Conad began a journey to reshape its stores from point-of-sale vehicles to location-focused operations where relationship-building and aggregation happen.

To further develop its consumer relationships, Conad saw the value in understanding who its customers truly are. It implemented a customer database that would provide a single source of truth detailing comprehensive shopper behavior and as well as store locations’ distance to its  customers. 

IRI Supports Conad’s Shopper Engagement Strategy

Conad and IRI worked together to decipher and segment shopper data via the following five stages:

  1. Conad initiated shopper data collection
  2. IRI provided data management
  3. IRI provided reporting automated analytics
  4. IRI provided advanced analytics
  5. IRI provided consumer activation

To better understand shoppers, provide better products, and establish stores in better and more convenient locations, it all starts and ends with data. By working with IRI to decipher the collected shopper data, Conad was able to create customer value by activating customers in these four areas:

  1. Basket Segmentation and Trip Missions: Building trip mission clusters based on basket size and content
  2. Customer Behavior RFMReg: Tracking the most valuable customers’ performance
  3. Customer Spend: Focusing on key purchase axis to identify high-medium-low customers.
  4. Preferred Point of Sale: Qualifying customers by adding modeling to behavioral dynamics

Related IRI solutions: IRI Retail Private Cloud - Supplier Collaboration Gateway - Consumer Insights

Conad was able to engage shoppers with relevant and targeted ads, implement mass initiatives to segment stores and provide location-based product assortments, accurately target shoppers to drive frequency and increase average basket size, and send personalized custom messages to reward loyalty and support category growth. IRI supported Conad's mission to uphold its motto, "customers don't buy products and services but relationships, stories and magic."


Are you interested in learning more about establishing customer value initiatives and achieve better segmentation, targeting and activation strategies? Contact your IRI representative or email me at Marco.Colombo@IRIworldwide.com.


 
 
 

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