Customer-centric retailing – Now you know what ... - Roland Berger

CUSTOMER-CENTRIC RETAILINGCCR in practice: Laundry detergents on the shelves– before ... ... and afterBy contrast, CCR is a customer-segment-specificapproach. Specific baskets of goods are determined foreach customer segment using indicators (e.g. indexedcustomer reach, loyalty). The prices of these basketsare then compared with those of relevant competitors.A differentiated pricing strategy can now be defined foreach customer segment according to each segment'sprice sensitivity.Price suggestions are determined at the product andproduct-category levels on the basis of information onsensitivity, margins and cross-purchasing. For this weuse tried-and-tested algorithms. The results are reviewedand released by category management.This superior understanding of customers can be usedas a basis for targeted investment in prices – and simultaneouslyto manage the price image.7. Improve the effectiveness of your promotionalbusiness/direct marketingThis new way of thinking in customer segments and targetgroups also changes promotional business, which isimportant for customer footfall. Up to now, the productschosen for campaigns have depended very much on whatshare of advertising costs was picked up by the industry.Now, for the first time, offers can be tailored to targetgroups and timed according to the consumption patternsof the individual customer segments.At last, retailers receive direct feedback on their advertisingspend and how successful it has been in each targetsegment. The aim of optimization is to select products insuch a way as to advertise those that are simultaneouslythe most attractive and the most profitable products atthe right moment. This makes it possible to significantlyimprove the design of promotional leaflets in terms ofdistribution, number printed, products chosen andpictures used.For example, you can only tempt the so-called "smartshopper" segment with brand-name candy at the beginningof the month. By the end of the month, this segment(which otherwise generates high sales) has run out ofcash. The number of confectionery products in the leafletcan thus be reduced late in the month.CCR can also improve the efficiency of direct customercontact via the Internet or mailings. Campaigns, customerinformation or specific service offers that are tailored toa target group can increase footfall and sales; they havealso been proven to boost customer satisfaction.10