Meat eaters superior in Woolies' eyes

Meat eaters superior in Woolies' eyes
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Lovers of red meat make safer insurance customers than those fond of a high-carb diets Woolworths has found through its big data work, which has also helped the insurance brand avoid "big splashy" TV ads.

By layering Woolworths Everyday Rewards and the Frequent Shopper Club databases with its insurers car crash database the retail giant has been able to support its two year old product without a large above-the-line spend.

“You see that customers who actually drink lots of milk and eat lots of red meat, so that is what’s in their shopping basket, are very very very very good car insurance risks,” Penny Winn, Woolworths Limited's multi-channel and logistics director, said.

“Versus those who eat lots of pasta and rice, fill their cars with petrol at night and drink spirits."

Winn, who was at Hobart’s MONA Museum to present at Southern Cross Austereo’s Engage Live, said the overlaying of data sets allowed Woolworths to avoid “big splashy ad campaigns on television” and bad insurance risks by going direct to consumers.

“What that means is we’re able to tailor an insurance offer that targets those really good insurance risk customers and give them a really good deal via direct versus above-the-line. It helps to avoid the bad insurance risks.”

“The great use of data enables you to make better decisions to then serve your customers better and tailor offers, I can’t tell you how significant that is.”

“Deep dives” into its data sets and the merging of databases via data firm Quantium, which Woolworths acquired a 50% stake of in May, has allowed Woolworths to pinpoint who their loyal and promiscuous shoppers are, what they are most likely to buy and tailor offers to them.

For example, only 7% of Big W’s customers are loyal to the store – but they represent 21% of spend – they are more likely to browse catalogues, be antique collectors and car enthusiasts.

In comparison, those that shop at more than one discount department store are likely to be after sports goods and baby wear.

The power has been transferred from manufacturer, to retailer and is now in the hands of consumers. According to Winn the shift is irreversible.

“Customers are in control and all of us need to fight harder for customers loyalty. At Woolies we are constantly looking at how we better service our customers.

“While everyone says ‘oh well, Woolies and Coles have got massive market shares’, you know, only 7% of our customers are totally loyal to Woolworths 93% of our customers shop elsewhere as well.”

To win loyalty Woolworths is focused on its loyalty programs, personalised communications and offering a multichannel business.

With the Everyday Rewards program Winn said they are focusing on both the rational and emotional side of their customers.

“Engage with your customer, give them reasons to shop. It’s not just appealing to the purse strings but also to their heart strings.” To do this Winn says the program needs to balance the discounts it offers on petrol and other financial incentives with invites to Carols in the Domain, birthday and Christmas cards.

Making sure the offers delivered to individual consumers are relevant is also key. “As you are walking by the Tim Tam shelf if you are actually on a diet you won’t get the special offer for the Tim Tams – that is not quite here yet, but watch this space.”

A multichannel business, where consumers can choose to either shop in store or online is another driver of loyalty, according to Winn.

“When a customer shops both online and in the store and we get that really engaged and sticky relations we get a much more engaged shopper and we get a bigger share of wallet,” she said.

“That is what it’s all about.” 

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