© AbsolutData 2014 Proprietary and Confidential 1

Behavioral segmentation for A leading U.S. Sports goods' retailer

1

A leading U.S. sports goods' retailer captures various customer related Transactional data gathered through Point of Sale

The client had Transactional data for 12 M customers containing variables like: Purchase Characteristics (recency, frequency & monetary value of purchase) Store Level Data Type of Goods/Category Purchased etc

Objectives: Identify a set of distinct & actionable value based customer segments In-depth profiling of these customer segments to understand their needs, attitudes & psychographics Provide actionable insights to customize marketing programs & messaging

Project Background(Situation before we went in)

Initial Diagnosis

© AbsolutData 2014 Proprietary and Confidential 2

A detailed PowerPoint report highlighting the following was delivered to the client: Detailed Profiling of Identified Segments Marketing Strategies for each identified

profitable segment

OutputCollection of Psychographic Data of Customers through Quantitative Research

Behavioral Segmentation using Customer transaction data provided by the client

Detailed Profiling of Customers using Transactional data & Quantitative Research Data

Build Identification Model using the segmentation variables and Customer transaction data provided by the client

Methodology

© AbsolutData 2014 Proprietary and Confidential 3

How do we migrate

customers into the best customer

loyalists segments?

Cross sell in off season

Cross sell in off season

Cross sell in off season

Cross sell in off season

Capture share from other retailers

Capture share from other retailers

Cross sell in other categories

Which customer segments have the highest opportunity for conversion?

For each segment, what is the nature of the opportunity? Why is that the opportunity?

Increase loyalty

Increase GM %

How do we retain or increase share

with our best customer

segments?

Summer Sports2

Winter Sports3

Back to School and Team4

Fitness Equip Purchasers5

Golf Purchasers8

Outdoor Purchasers9

Cherry Pickers

Sports Enthusiasts

Spring Training1*

Workout Apparel Purchasers6

Increase dollar spend

Increase visitsAction Sports Purchaser7

Impact: Case identifying opportunities across key segments – Sample output

(a) *Numbers represent priority order

For each of the seasonal segments, there is an opportunity to increase frequency of visits in the off-season.

Also, they spend less % of their purchases on Workout apparel and Fitness Equipment then Best Customer/Loyalists

Fitness seg. purchases a significant amount from other retailers

Workout seg. are a casual shopper that does not purchase heavily across categories

A leading U.S. sports goods' retailer enjoys healthy share with Action seg. but they don’t visit frequently

Golf seg. makes the majority of their golf purchases at other retailers

Outdoor seg. doesn’t purchase much outside of Outdoor equipment

Cherry pickers carry lower margin than other segments

Need to keep A leading U.S. sports goods' retailer best customer base strong

Based on AbsolutData’s recommendation, the client built loyalty and relationship building

programs for their profitable segments