electronic retailer

Background

A major electronics retailer delivers catalogues to all the households in their franchise areas on a fortnightly basis. This current approach allows no provision for targeting and so generates a high percentage of wastage.

This retailer wanted to review their approach to catalogue distribution and develop a method aimed at reducing cost whilst maintaining store revenue.

Situation

This retailer’s transactional data was combined with Westpac Business Insight data to calculate the total spend value of each geographical unit and then the catalogue delivery walks in line with that. These data sources were also used to understand this retailer’s market share within various regions, which provided clues to their penetration versus potential in different areas.

This analysis identified distribution walks that were currently not receiving a catalogue, but were in areas where there was a high market share, ie: representing households that were spending large volumes in stores. These households were flagged as worthwhile to add to the catalogue distribution strategy.

Based on the spend value and market share information, it was also possible to propose an ideal distribution frequency for delivering to each of the households in various stores’ catchment areas.

Result

This project enabled Datamine and the retailer to modify both the catchment area and frequency of catalogue distribution, based on actual customer spend and penetration, in order to optimise catalogue costs, without creating an adverse effect on sales.

Test and control groups were selected to ensure that the trial stage of this catalogue distribution approach was measured accurately. The trial was thoroughly reviewed before being rolled out nationwide.