Whether the goal is decorating a baby's room or building a man cave, do-it-yourselfers are alive and well and buying lumber and other home improvement products from big box retailers across the globe.
In the US, DIY brings to mind chains like Home Depot, Lowe's, and Menards. In Europe, DIY is synonymous with Leroy Merlin, which operates close to 300 stores in about a dozen countries under a variety of retail identities. On both sides of the Atlantic, business analytics is a DIY trend, especially as retailers seek to understand customers better.
I recently spoke with Luca Bianchi, CIO of Leroy Merlin Italy, which operates 46 stores across the country. He shared his insight on the company's recent transition to in-depth marketing analytics from basic business intelligence reporting. It seems like he could be speaking from the perspective of any retailer, anywhere.
"Trade is the transition from the traditional way in a cross-channel, integrated way, and we need to create a relationship between us and each client," Bianchi said. "And the analysis can give us great help in making a difference."
In Italy, where the corner specialty shop remains a neighborhood fixture, understanding customers, optimizing marketing campaigns with customized offers, and enhancing customer loyalty is particularly important -- if not challenging.
"Having an analysis and marketing tool that helps us identify and know our strategic customers and build strong relationships with them focused on their DIY projects will be crucial to our future success," Bianchi said.
As CIO, he works with users in the implementation of tools that support his company's marketing strategy. For this project, Leroy Merlin Italy assembled a dedicated team of people with the necessary skills to ensure success. The team included Edoardo Rozzoni, CRM director; Anna Canazza, IT project manager; and Gianni Bientinesi, market research and studies manager.
The team will initially:
Analyze in-store data collected as part of a proposed relational card (Carte Idea) for strategic customers
Segment customers according to their needs and their life cycles
Develop one-to-one personalized and relevant communications focused on each customer's needs.
The team could extend this effort to all of the brand's cross-channel customers in Italy.
"From a marketing point of view, for us it is very important to have one relationship between the sales point, the brand, and the customer -- and to be able to analyze the data we receive every day to create value for our customers," Rozzini says.
As the team works out the scope of its marketing analytics undertaking, one thing is certain: Leroy Martin wants to "know customers more deeply," Bianchi says. And that means collecting more data about them.
Today the retailer knows customer addresses, phone numbers, and information from a single invoice. Tomorrow it wants to link in information on more qualitative factors that go beyond the traditional customer database, like type of building and customer projects.
"We need more than traditional data," Bianchi says. "We need the possibility to have other indicators or elements that can give us the ability to analyze more and create different targets of customers." The goal is to create a "personal and deep relationship with our customers. We'd like to be top of mind when they want to buy something concerning housing in general."
Share your thoughts on how best to gain customer insight through analytics on the message board below.
Without knowing more than what you mentioned in that comment, I wonder how much of that "supporting Main Street" mentality is actually rationalization.
For instance, not only are the trips to the local store presumably quick, but you mention that they're for DIY projects -- whereas you relegate "major" purchases to Home Depot. I wonder how much of that is a mental thing... the DIY projects are "small" and "no big deal," and to maintain that idea of them being "no big deal," you go to the smaller store, because they suddenly become a much bigger deal if you're in a Home Depot.
Similarly, by placing so much emphasis on the exceptional service you had at Home Depot for an appliance purchase, I might wonder whether you expected or are used to bad service or stressful shopping experiences for major purchases and projects (particularly given your sardonic "till somebody else there ruins the good feeling!"). If this theory is correct (and even if it isn't for you personally, it might be correct for someone else with similar shopping habits), big purchases mean stress. By going to the local store, you (or our hypothetical person with similar habits) are psychologically limiting the stress of the purchase and the project -- because of the mental connection with big box stores and stressful experiences.
Anyway, just a thought about one particular type of "Main Street supporter." Your experiences may vary. ;)
@Lyndon_Henry, blogger Maryam Donnelly has written about using lifecycle email campaign management and how companies can find value in that. But I would agree, consumers involved in continuous home improvement may be difficult targets here.
I'm thinking "lifecycle" in terms of what stage of buying relationship the customer is with the retailer. If a commercial customer of a home improvement chain, for example, are they in pre-build stage on projects or build stage? Where they are would determine how much and on what they're spending, and a retailer who is aware of that can deliver better targeted marketing.
Well, the term is rather confusing in this application. Where I come from professionally, it's always referred to the life of, say equipment, and things like ... rolling stock. You know ... Buses have a life cycle of 12-15 years, electric railcars have life cycles of 25-35 years, and so on.
Now, applying this to a customer's relationship with a retailer ... I'm still wondering, is this a valid data input for something? I'll be in the pre-build stage, then build stage, then another pre-build stage, another build stage, over and over, with one DIY project after another, with retailers like Home Depot, Lowe's, IKEA, etc., etc. As far as I'm concerned, my "life cycle" relationship with them probably goes on and on, until either they close their doors forever, or I drop dead.
So I wonder what "life cycle" they would fit me into...
@Joe, I think another factor that comes into play is simply wanting to buy "local" or from the small guy. In the case of DIY, for example, I'll go to the local Ace store rather than the Home Depot, Lowe's, or Menard's that are all within a short drive when I want certain items. The owner lives in the neighborhood, and I like the idea of supporting a neighbor. But for bigger items, I'll go to Home Depot. We had such exceptional service there for an appliance purchase last year that it'll be my destination among the chains till somebody else there ruins the good feeling!
Precisely, Beth. I -- and many other customers, doubtlessly -- are willing to pay a premium for superior customer service. Part of that superior customer service is the company knowing us.
Case in point: Some time ago, there was a point when I was regularly asking for an extra straw from a drive-thru I had begun frequenting (because sometimes I might drop one on the floor, or it would be broken, or something else). Eventually, the drive-thru attendant who worked that particular shift started to remember me, and would give me the second straw unasked.
This instilled me with warm, fuzzy feelings about the location, which made me want to go there all the more often.
Could you get your analytics to do that for you? Sure, but it would probably be a very complex implementation, and it would certainly be little substitute in this particular regard for an attentive, conscientious employee.
Joe -- you make an interesting point, though, when you say, "Of course, in the old days of the corner specialty shop, the only analytics effort you needed was a mindful owner who took time to get to know his customers by talking with them every day." From what I understand in talking with the folks at Leroy Merlin, the corner shop is still very much a force to be reckoned with from bigger retailers. So I think it's that presence of the local hardware store, for example, that in part drives Leroy Merlin's need to get to better know each and every customer.
Indeed, Beth. A customer buying plumbing supplies, for instance, unless he's a plumber or contractor, is probably working on a very specific, probably short project. The customer buying lots of lumber, however, seems more likely to have a much larger ongoing project, or may even be a hobbyist.
(Lots of people work with wood as a hobby, but few work with plumbing as a hobby.)
There may even be a seasonal element, Beth. In addition to the obvious (DIY tax software the first few months of the year, sunscreen in the summer, cookbooks in November), there could be some hidden seasonal purchases. For instance, people with Seasonal Affective Disorder may be more prone to make certain food purchases in the winter.
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