How Customer Segmentation Solutions Improved Cross-Selling Opportunities in Hundreds of Stores for a Major Retailer? 

Aug 23, 2022

Highlights of the Case Study: 

Particulars Description 
Client A major retailer in Britain partnered with Quantzig to build cross-selling relationships with customers across all its stores. 
Business Challenge The client wanted to leverage Quantzig’s customer analytics solutions to create customer profiles based on lifestyle changes and income groups.   
Impact Quantzig used machine learning and AI-based models to profile customers across several parameters to provide the client with a targeted customer base for different product segments. 

Game-Changing Solutions for the Retail Industry 

The retail industry has seen a completely revamp due to customer segmentation solutions. Cross-selling to the existing customer base is one tested strategy for generating new revenue streams for many retailers. Focusing on customer retention over customer acquisition is perhaps one of the cleverest approaches to growing a business as there is already an established relationship and familiarity with the needs and wants of the customers. This approach requires identifying target customers based on the demographics, which can be challenging for retail players as the concept behind customers’ spending and purchase decision is not very well understood.    

Quantzig’s customer analytics solutions enable retailers to resonate with customer tastes and preferences. Our robust customer segmentation and behavior analytics solutions ensure in-depth insights into customers’ profiles to optimize cross-selling efforts. With these insights, the retailer can sell a second product by capitalizing on the demand for the primary product.   

The Challenges of the Retail Client 

Our client is a major retailer in Britain that wanted to increase the spending by existing customers and increase the conversion rates and average order value. It partnered with Quantzig to build cross-selling relationships with customers across all its stores. The client wanted to leverage Quantzig’s customer analytics solutions to segment the customer base into homogeneous groups, interpret patterns, and choose the factors that impact customers’ spending decisions. Our client wanted our analytics solutions and target market strategies to create customer profiles based on their lifestyle changes and income groups. These data-backed insights would help the client to increase ROI and customer loyalty. 

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Customer Segmentation and Profiling Solutions

Quantzig’s market analytics team identified target customers for cross-selling and determined that cross-selling the new product would significantly increase individual customer spending and store profitability.   

Our robust customer segmentation solutions recognized customers one on one and effectively implemented cross-sell across categories based on our flexible target feature. A “combined filtering” decision engine was used, which recommended items similar or deemed similar to the items that like-minded consumers had previously preferred based on a detailed view of customers’ transaction history and trends.  

Finally, our analytics solutions driven by machine learning and AI-based models helped analyze customer ratings of products based on social media interactions and track other aspects of the customer lifecycle. This enabled our client to come up with the data-backed suggestion for the offerings that best complement the original purchase of the customers. 

Impact Analysis of Quantzig’s Customer Segmentation Solution  

Segmentation-based cross-selling became our client’s key enabler that helped it gain the top supermarket position in Britain. Our interventions had far-reaching benefits for our retail client and the consumers who benefitted from the solutions.  

For the retailer:  

  • Gained customer loyalty and developed customer equity   
  • Enhanced market standing  
  • Promoted product diversification  
  • Explored and entered new markets  
  • Achieved balanced growth between existing and new customers, high and low-margin segments, and products  
  • Enhanced profitability  
  • Reduced customer attrition rate  

For its customers:  

  • Found a curated mix of products to choose from 
  • Widened the products and services offerings  
  • Convenience of multi-service shopping, ease, and flexibility 
  • Increased customer satisfaction with tried and tested brand 
  • Offered products at a comparatively lower price  

Key Outcomes 

In the modern digitized world, retailers must create user interfaces and processes that maintain the continuous flow and access of data. This helps streamline operations and, at the same time, helps derive insights into what the customer wants. The retailer can leverage this information to improve and innovate existing product lines, cross-sell new products, and thus create a large share of loyal customers, leading to repeat sales and brand longevity. 

Our intervention helped the client create a database of customers for targeted cross-selling of products, which led to higher sales and revenue along with loyal customers who would continue to choose our client for future purchases. 

A Broad Perspective on the role of Customer Analytics Solutions in the Retail Sector: 

In the current competitive environment, companies in the CPG industry must utilize customer analytics to make quick yet informed decisions and pull off maximum returns. But how exactly do CPG companies make the best of customer and product data? The ability to collect and interpret comprehensive data related to customer lifestyle is becoming highly important for CPGs as it offers more insights than traditional approaches such as advertising, market surveys, promotional campaigns, etc. Customer analytics is crucial to achieving quantifiable insights that can help CPG organizations expand their consumer base, increase customer spending, and thus gain a larger market share with added revenue.  

Key Takeaways 

  • Developed a data-backed targeted customer bank for cross-selling products 
  • Increased customer spending leading to higher sales and revenue 
  • Enhanced customer satisfaction leading to brand loyalty 
  • Gain insights into NPD and future inventory pipeline 

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2) How Retail Demand Forecasting Helped in Optimizing Supply Chain Operations by Forecasting Demand for Five Years? 

3) How Inventory Management Solutions Helped a Pharma Retailer To Improve Overall Supply Chain Agility? 

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