As of 11 January, 2018 Symphony EYC became the Customer Intelligence Division of Symphony RetailAI.
Article reproduced courtesy of Abrafarma Future Trends, Excelência Year VI, number 6, February/2017, https://www.abrafarma.com.br/
At the recent annual convention of Abrafarma, the Brazilian Association of Pharmacies, Adriano Araujo, Symphony EYC ‘s General Director Latin America, gave an enlightening presentation on Big Data and their importance in business today. Here are the most significant highlights of Adriano’s presentation.
The expression Big Data has increasingly been mentioned and used by companies as an ally in order to boost business. 90% of the data available worldwide has been generated over the last couple of years. They include information of all kinds: how you paid for something, if you paid in installments or not, how you behave on social media. Everyone leaves valuable digital trails. On the other hand, technology is increasingly accessible, and new ways of interacting with data are being developed. ‘Computers can make use of artificial intelligence to identify clients that can potentially stop shopping’, he says. There are several different Big Data applications, and they drive the main retail decisions. According to a McKinsey study, Big Data can help a retailer increase its operating margin by 60% by taking into account four strategic items ‒ price, promotion, product, and customization. More specifically:
There is a low correlation between being less expensive and being perceived as cheap. We need to identify which products are important for customers, and offer them at low prices. ‘Grant low prices for those who want low prices’, says Araújo. This strategy can increase sales, improve price perception and customer loyalty.
According to Araújo, between 40% and 60% of promotions do not work. Big Data solutions can help you better understand the effects of a promotion, and figure out the bottom line in sales. But we should also analyze the indirect effects identified in customer data. Aggressive promotions with more replacements and purchase anticipation might have lower overall impact when compared to less aggressive promotions. Big Data also measures customer behavior in order to understand the effects that promotions have on them. It also helps categorize customers and serves as a way to check their impact on revenue, as well as on margins. It helps guide retailers when they have to decide whether to continue, review or quit implementing a particular type of offer.
Big Data is essential to help retailers choose the product mix that should be marketed at the point of sale. It may bring significant assortment and space optimization gains.
Three main gains:
1º – To effectively process a range of variables
2º – To understand differences between stores from the customers’ point of view
3º – To scientifically understand the concept of Transferable Demand, key to understanding assortment: product loyalty with product interaction.
Finally, the product mix of a store will be determined by its customers’ profile. It is common for a pharmacy located in a lower class area to have upper class customers. This is all taken into account.
Big Data makes it possible to promote offers in an individualized way. Araújo mentioned a real case: one particular retailer served by Symphony EYC had 3 million direct mails sent to 99% of its customers, each one with a unique combination of offers. The offers were sent through the best channel to communicate with them (mail, email, SMS or social media). If customers did not respond by their preferred media channel, the materials would be sent again using another channel. The result of this marketing strategy was a 0.9% increase in sales. Despite the expansion of digital media, paper is still the best channel for this kind of promotion. ‘We get 200-300 e-mails a day, including bills. But when we send a print offer to customers, it has a surprising effect’, he says. Araújo also emphasizes that ROI for a customer that is already inside the store is sevenfold higher than the ROI obtained among those buying from the competition.