Industry: retail
Objective: align multiple sales channels

A leading retailer in central Europe struggled to synchronise stationary sales and online sales programs. As responsibilities were located at different levels of the organisation, the operational managers perceived the parallel sales channel as threat to their own ability to achieve their objectives and sales targets.

Matching and applying Data Science to the portfolio of online customers as well as loyalty card owners, helped to identify customer clusters, with specific profiles. This led to the conclusion of following customer groups:

  • buying online only
  • buying stationary only
  • buying via both channels
Differentiating criteria were:
  • distance of home address to the next shop
  • demographics
  • length of the customer relationship
  • purchased products (segmented)

As the general performance assessment of the company could not be changed, “total Customer Lifetime Value” was introduced as combined KPI, to balance the interests of the two different stakeholder groups. Also, joint marketing committees, staffed with representatives of the online, as well stationary division were established and measured upon the marginal increase of ARPU, benchmarked against a neutral reference group of customers.

As a result, legacy hurdles of communication between the division diminished over time. On average ARPU increased in excess of 8%, for specific customer groups increases in excess of 20% ARPU have been observed within the first 12 month after the project.

Amongst others, the integration of the KPI as well the supporting CRM analytic algorithm in the deployed SAP reporting environment of the firm was a major challenge for the team.