In previous blogs, we have looked at share of wallet and prioritizing the right products to drive growth. As relevance and personalization gains momentum, identifying the right shopper for your brand is important than ever before.
As you build your activation strategies, how do you identify the most engaged shopper at Target? To make your buyer conversations most efficient, leverage Target’s RFV (Reach, Frequency, Value) segmentation. As you know, RFV segmentation is value-based, measuring a guest’s overall Target engagement. It is a mix of trip frequency and average spend per trip based on total Target trips and spend, whether the trip includes an IRI tracked item or not.
Looking at branded snacks as an example, chart 1 below shows that Target’s share of wallet among the VIPs is impressive (as expected) but is low among Enthusiasts and Moderates. At the same time, the total spend among the Enthusiasts and Moderates is substantial, leading to more growth opportunity with these segments. While you could activate against either of these two shopper segments, let’s drill down further into Moderates as they have a large spend, high growth in spend versus a year ago and a low share of wallet.
Leveraging IRI’s TCN platform provides for more clarity on shopper behavior in branded snacks, you can see in Chart 2 that Moderates trail Enthusiasts and VIPs in many key shopper measures. These gaps in shopper measures provide a list of candidate measures to activate against. A more effective approach would be to use advanced machine learning algorithms to understand importance of each shopper measure and activate against it. For example, if repeat rate is one of the most effective measure to drive higher share of wallet, TCN provides avenues to further investigate and activate against households with low repeat rate. The possibilities are endless! And it all comes back to understanding share of wallet and how it can be used to identify levers to drive growth.
Finally, in our last article, we challenged you to guess where Target might be leaking its branded sales. If you guessed, Grocery, Walmart and Club, you were right. Also, any guesses on which retailers Target tends to leak the most? Log in to TCN today to find out or look out for insights in our next blog.
If this article got your wheels spinning and you would like to collaborate, do not hesitate to reach out to Paul Auberry (Paul.Auberry@iriworldwide.com) or Sri Pankanti (Sridhar.Pankanti@iriworldwide.com) to help you prioritize growth opportunities using advanced machine learning techniques and solve complex data problems.