The food retailer turned to Antuit to design and build an insights-driven solution. The companies established a foundation of the problem and business needs, resulting in a recommendation for an offer optimization strategy. Antuit consultants analyzed performance of previous campaigns to understand which aspects of direct marketing are important for achieving customer retention and sales uplift. The overall results were further scrutinized based on customer’s profiles such as price sensitivity, lifestyle, overall loyalty along with product attributes such as seasonality, price and richness of offer. Primary conclusions for using an offer optimization approach included addressing these issues from previous campaigns: Products selected for promotion were unable to satisfy the marketing intent, Products and offers were not relevant to potential shoppers, The promotions failed to drive measurable traffic growth or sales growth, Expensive basket-level offers did not deliver a measurable increase in basket size. Antuit provided the skill set and tools to make the marketing communications relevant to the complete universe of shoppers. Specifically, Antuit had the retail knowledge and the ability to work within the client’s IT infrastructure, enabling a quick customized solution development in a cost-effective manner. The solution addressed the most important need in the client’s equation: the relevancy of offers for the shopper. To accomplish this, Antuit scored each offer for each customer to establish relevancy. The offer targeted shoppers only when the shopper matched the targeting intent and exceeded the relevancy threshold. Further, Anutit filtered the offers to prevent private label cannibalization, to avoid offer repetition and to minimize the overlap of value between offers. The solution also made basket builders more tactical and cost-effective by dynamically allocating the spend threshold to ensure stretch in customer spending. The retailer faced vendor budget constraints for each offer and needed to maximize spend on promotional communications. Given these challenges, Antuit developed an optimal allocation algorithm for each shopper that maximized relevance while keeping business constraints and objectives such as vendor budget, revenue, profitability within recommended limits.
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