The Intelligent Share of Wallet

Door Drop from Push to Pull:
.
How to adapt Door Drop to the Pull Society –
facing consumers in the driving seat!
Morten Hovmand Buch, Innovation & Channel adviser Coop Denmark
Presentation of
Coop
Coop is Denmarks largest retail enterprise and is owned by its members.
37,4% in marketshare, No. 2 has 32,5% of the market (2014)
Every week 5.5 million customers visit one of our stores (the size of
Denmarks population!) and we distribute 4,2 million Door Drop every week!
Coop Danmark operates the 7 chains in DK: Kvickly, SuperBrugsen,
Dagli’Brugsen, LokalBrugsen, Irma, fakta, fakta Q and 1 chain in Germany:
fakta Tyskland and 1 online store: coop.dk
We have a total turnover of approximately 50 billion DKK (6,7 billion Euro)
and 1.200 stores across Denmark. We are all about 38.000 employees.
Large supermarkets
Supermarkets
Discount Stores
Local Grocery Stores
E-commerce
My topics
How can Door Drop interact in the future conditions?
Strategic challenges facing Door Drop
The journey from Push to Pull media
• The Intelligent Share of Wallet (2013..)
• Premiere of choose your own (2014)
• The little mailbox.dk (2016…)
Proof of Concept /Perspectives
3
Future conditions Door Drop channel:
The customer uses multiple platforms
to get the best offers (24/7/365)
Effort: Focus on actual behavior
Kick Back: Return on Involvement from
the consumers!
The challenge (and goal)..4 years ago
Read
DD
5
Coop membership
programme
Programme facts:
1.6 million members
0.85 million email permissions
12 million visits to coop.dk
Turnover
Visits
The Intelligent Share of Wallet
- A retail tool which selects the
households that spend the most money
Big data model:
input, analysis and explanatory variables
1
The "key"
to
understand
the
household
Share of
Wallet
Unique consumer insights
2
Behavioural and
purchasing data
3
Data
input
Data
mining
Output
8
Selection of the most attractive household
The Intelligent Share of Wallet
Three premises to the
model
1. Household
fundamental needs:
budget – using
member card or
available to grocery
consumption
2. The chain (ex. Irma)
share of wallet
3. The competitors'
share of wallet
2
1
Provides answers to:
Who are they?
How much money do they
spend?
Why choose the chain?
Why choose the
competitor?
3
9
Each household is scored according to
consumption in the unique retail chain
Large S-of-W
/consumption (high ROI)
All private
households
Intelligent Share of Wallet
in DK
(2,7 million)
Small S-of-W
/consumption (low ROI)
Selection
Distribution plan: active members first - then
choose households based on model
Total Circulation of Door
Drops, Distribution plan
Share, member
behavior
Intelligent Share of
Wallet, model
Share, not selected
or
To DD-sign
11
Distribution: From all households on a route to the selection
of households with high scores (consumption)
1
Now (-2015)
Before
2
1
3
1
5
2
3
3
5
2
7
7
4
4
9
6
8
9
6
8
12
2012
2013-
•Declining effect
Old Push Marketing
.
”70% Yes”,
All Door Drop to all
household in an fixed
area
30% No Thanks
To all Door Drops
Share, member
•Door Drop
read
behaviorless
(25%)
/ Starting ”Pull” marketing
/ Focus on single
byhousehold
the consumer
and Actual
behavior
Intelligent Share of
•Negative
environmental attitude
Wallet, model (40%)
/ Active members first –
then (digital
choose households
•Digital structural change
based on model
offerings increases, the early start of
The Push Society)
•“No Thanks”
to Door Drop increases
35% No thanks
To all Door
Drops alternatives)
(consumer
seeks
2014-15
Share, member behavior
(18%/-7%)
.
Intelligent Share of Wallet,
model (33%/-7%)
•“No Thanks” increases
rapidly closing the channel
• A tax on Door Drops was
close to being approved
•Consumers want to control
the mailbox
49%/+14% No thanks
•Consumers likes their
favorite Dorr Drop
• There was a white spot!
In Denmark we (still)
love Door Drops!
….but we want to be in
the driving seat!
3
Oct. 2015: www.denlillepostkasse.dk
GOAL: Re-access to:
No Thanks – and
receiving Door Drops
Coops ”choose your Door Drop”
More Consumer Power
• Get The Door Drop where ever you live (like)
• Don’t matter if your Yes or No-Thanks
• 100% free selection
• Sold in a similar way as a convenience product
More Business Value
• Coop is the owner of the ”consumer-permission”
Able to Target offers to consumers
Able to integrate other media and membership-data
Capable of switching distributor
2015
Share, member behavior
(18%)
.
Intelligent Share of Wallet,
model (33%)
2016Share, member
behavior (30%/+12)
Intelligent Share of
Wallet, model (40%/+7)
+ 19% No Thanks – and
receiving Door Drops
49% No thanks
30% No Thanks
To all Door Drops
# 100% Pull PermissionMarketing
# The consumers controls
and select their favorite
Coop Door Drop directly
* Opening Up - Again
Access to members and
customers, +19%
…..2017-18
Share, member
behavior (47%/+7%)
Intelligent Share of
Wallet, model (23%/+3)
29% (+10%)
No Thanks – and
receiving Door Drops
….and e-mails
30% No Thanks
To all Door Drops
# 100% Pull Society (The consumer
rules) …Going to 29% (+10%)
# Facing the future conditions from
the consumers
# Starting dialog with a ”new”
channel to “print readers”
# Having more qualified access to
members and potential customers
"Live“ selection (distribution) to the most buying household
- Large variation in consumption on the same road
Member/consumption score
Low
Middle
High
Member
Pitt stop (may 2016)
- before the consumer seats the next direction
3
Many thanks for
listening
morten.hovmand.buch@coop.dk