Put your customers at the heart of your company
Retailers need new formats to keep up
Customer-centric retailing (CCR) is the key to mastering the retail challenge.
CCR is a new retail approach that aims to help retailers understand their customers better, identify the right target segments for their business and address these segments more effectively. It improves their customer focus and offers new insights into customer behavior. Essentially, it puts the customer back at the heart of organizational strategy, underpinning all market-related activities. This requires a new dimension in customer understanding.
CCR offers this new dimension. Specifically, it capitalizes on the potential of loyalty card transaction data, using this data to derive customer segments based on actual purchase behavior rather than just socio-demographic characteristics. It is the key to achieving a comprehensive understanding of customers' purchase behavior and needs.
CCR is more than just a tool for category optimization, however: it is a holistic management approach. To fully leverage its potential, retailers must apply CCR on all levels of the organization and in all functions, backing it up with a systematic change process. A number of major retailers such as Metro, Tesco and Carrefour have already done this and achieved a successful transition to a truly customer-centered organization.
Using CCR to optimize the marketing mix
Retailers can use the insights provided by CCR to effectively optimize their marketing mix. This involves four dimensions:
CCR delivers tangible results. European retailers who have implemented the approach have seen three main benefits:
Roland Berger Strategy Consultants has worked with a number of retailers and suppliers across Europe to help them design a customer-centric strategy. We have also helped our clients implement CCR across their organization and optimize the marketing mix accordingly.
Interested in discussing the potential of CCR for your organization? Our experts will be happy to meet you and give you further insights into the approach. We can also present detailed examples of previous projects and examine with you the possible areas of application for your organization.
CCR is a new retail approach that aims to help retailers understand their customers better, identify the right target segments for their business and address these segments more effectively. It improves their customer focus and offers new insights into customer behavior. Essentially, it puts the customer back at the heart of organizational strategy, underpinning all market-related activities. This requires a new dimension in customer understanding.
CCR offers this new dimension. Specifically, it capitalizes on the potential of loyalty card transaction data, using this data to derive customer segments based on actual purchase behavior rather than just socio-demographic characteristics. It is the key to achieving a comprehensive understanding of customers' purchase behavior and needs.
CCR is more than just a tool for category optimization, however: it is a holistic management approach. To fully leverage its potential, retailers must apply CCR on all levels of the organization and in all functions, backing it up with a systematic change process. A number of major retailers such as Metro, Tesco and Carrefour have already done this and achieved a successful transition to a truly customer-centered organization.
Using CCR to optimize the marketing mix
Retailers can use the insights provided by CCR to effectively optimize their marketing mix. This involves four dimensions:
- Define the right category mix and space allocation to address the relevant target segments. Sample questions: What is the appropriate mix between food and non-food assortments? What is the best mix within food and non-food category space?
- Review the category destination strategy. What assortments do the relevant customer segments focus on? How can I improve the assortment structure to leverage my sales potential? Which assortments can I use to generate additional competitive advantage?
- Review the pricing strategy. What is the right price level for each customer segment? Are my price levels simply based on competitors' prices or on the needs and price elasticity of my customer segments?
- Review the promotion and placement strategies. How can I address my target segments with leaflet promotions? How can I improve my promotional mix? How should I adapt my shelf layout?
CCR delivers tangible results. European retailers who have implemented the approach have seen three main benefits:
- Customer-centric strategy and marketing actions improve sales and gross profits
- A customer-focused marketing approach enables more efficient allocation of marketing spend, leading to cost savings and higher returns on marketing investments
- Transaction- and need-based targeting of customers improves customer satisfaction and loyalty
Roland Berger Strategy Consultants has worked with a number of retailers and suppliers across Europe to help them design a customer-centric strategy. We have also helped our clients implement CCR across their organization and optimize the marketing mix accordingly.
Interested in discussing the potential of CCR for your organization? Our experts will be happy to meet you and give you further insights into the approach. We can also present detailed examples of previous projects and examine with you the possible areas of application for your organization.
