Challenge
Our client, a retailer specializing in hard-surface flooring, needed a better way to understand the performance of its investments across sales, marketing, product, and market/store processes. The client was looking for help to overcome the following challenges in retail operations:
- Lack of a comprehensive model to effectively allocate marketing resources.
- Difficulty in centralized executive team decision-making due to siloed performance criteria across departments.
- Absence of a unified approach to analyze company-wide expense management and ROI.
- Inefficient understanding of resource allocation benefits that made it difficult to adjust in-store operations and staffing.
Solution
Bridgenext collaborated with a cross-functional executive stakeholder team to help identify patterns and segment customer and business actions that would ultimately inform investment and forecasting decision-making. Examining more than 25 data sources, we gathered data from sales and performance, product assortment, marketing, and market & store-level operations. We also conducted stakeholder interviews with every member of the team individually to understand how the team ran its area of the business, including the metrics relied upon, priorities, and the pain points experienced. The goal of the program was to uncover insights that would:
- Increase investment and productivity
- Improve return on marketing spend
- Lower costs and create efficiencies in operations
- Strengthen competitive position
Ultimately, this effort led to the development of a Cluster Analysis Framework aimed at optimizing marketing spend using advanced retail analytics.
- This examination pinpointed 8 distinct clusters of stores showcasing comparable traits across 6 key indices: demand, competition, staff, loyalty member, marketing investment, and store performance.
- Furthermore, 165 DMA (direct market access) deep dives were generated to offer specific insights into the factors influencing performance in specific metropolitan regions, facilitating more precise marketing investments.
Some highlighted findings include:
- Highest-performing stores have a strong concentration of loyalty members relative to lower-performing stores.
- Lowest performing stores are concentrated in the mid-West where there is more competition.
- Staff Performance & Loyalty Member Performance are tightly coupled, indicating relationships are critical.
Results
By collaborating with Bridgenext, the client is now able to look at its business in a completely new way. The client can create informed strategies on where to invest, maintain, or divest resources. The retailer now knows its top markets and the factors that drive revenue and profitability for its business.
Benefits provided by data analysis include:
- Improved Marketing Effectiveness: Concentrating dollars in areas with the highest market opportunity to maximize impact.
- Customer Persona Understanding: Articulating the value of its loyalty member community and planning for new ways to service this most valuable customer segment.
- Physical Store Strategies: Understanding how factors, like physical location, competitive presence, local construction, and building trends, in a particular market affect the success of its retail locations and planning accordingly.
