Boots has created an internal strategy aimed at capitalising on the data its “very broad” customer base shares with the retailer.
The team at Boots has mapped out a customer matrix, highlighting the various shopper types it attracts. According to Dave Robinson, head of personalisation at the retailer, the company sets goals for each of its customer segments in relation to how they use the various shopping channels available.
Most retailers will report similar practices within their own businesses, but Robinson – who was speaking at RBTE 2017 in London – highlighted some intriguing intricacies surrounding the process.
For example, the main target for traditional shoppers is to encourage them to access different channels, because “omnichannel” shoppers are viewed higher spenders. For already well-engaged customers, greater attention is paid to boosting and measuring their satisfaction levels.
For new customers, Boots sets itself a target to quickly move them to five or more transactions a year.
Robinson explained: “The average number [of transactions] for an active customer is 12-15 times a year but for a new customer we [quickly] want to get them to about five, which is when data starts to become available for us to be able to use in different ways.”
For years, the Boots Advantage Card provided the main source of data for helping Boots understand its customer demographic, transaction behaviour and response to marketing. But with the use of an in-house analytics team, the retailer is apparently developing a better understanding of its customers’ behaviour across its pharmacy, optical, customer support, online and multiple other divisions.
“Where things are changing for us is we’re using the data as fuel for more outputs – it’s about the content we show our customers or the prompts we give our colleagues in the shops to have better conversation with the customers.”
In terms of wider technological developments at Boots, the company relaunched its mobile app six weeks ago and is “making great strides” with it mobile strategy, according to Robinson.
The app was rolled out in conjunction with its parent company Walgreens, and much of Boots' digital development is now driven from the US following the takeover and the creation of Walgreens Boots Alliance in 2015.
With just 5% of sales coming from online, the focus at Boots UK remains on encouraging a connection between the digital and the physical retailing aspects of its business – not necessarily growing digital.
“We obsess less about where the channel growth comes from and [look at what] overall is driving sales,” Robinson said, adding that around three-quarters of online orders are picked up in-store.
“If online can provide a customer with information and the store can be the fulfilment part, that’s a great outcome. The 5% [online shoppers] is more like 25% if you understand what’s actually happening in the shop.”
He added: “The more ways you experience the brand, the higher value spend [that is] over time. We try and do what we can [to encourage people to spend across channels].”