In Action

Habaca Helps Statoil drive product offers through better customer understanding

Habaca Help Statoil Target key Customers for more effective product offers

The Company

With over 50 retail outlets on their forecourts nationwide, Statoil have placed a strategic importance on their Fareplay convenience stores. Statoil approached Habaca to carry out a detailed market basket analysis and customer profile, focusing on their food counter. The objective was to ensure that the right products are being offered in the right place at the right time and to the right people.

Critical issue

Statoil are focusing on the fast food side of convenience retail;

1. Increasing average spend per customer - Moving people from lower to higher price point items.

2. Increasing average basket size.

3 A Destination Shopping venue - By understanding the different groups who visit their stores, provide appropriate products that will give them a critical competitive advantage over their competitors.

Through Market Basket Analysis and Segmentation, product category management want to implement a decision support system that would allow them to better meet the needs of the customers using the Fareplay outlets.

The Project

Statoil hold demographic information on a subset of their customers through a variety of fuel loyalty cards. In order to build in-depth customer profiles, a link between the loyalty card demographics and the purchases on the EPOS system was created. According to Michael McCormack (Retail Business Manager) "Profiling and market basket analysis will enable us to deliver what people want, when they want it and how they want it. It's critical to the success of Fareplay that we understand our customers."

Project Steps:

Using the Clementine software from SPSS, Habaca's analysts developed in-depth models to address the following issues

Customer profiling

The customer demographic and transactional information was used to develop a detailed view of who the Fareplay customers are, when they are visiting and what they are purchasing.

Customer profitability analysis

The customers were segmented on the basis of their profitability using both their fuel, food and shop transactions. This gave Statoil a clear insight into their "most valuable" customers.

Market Basket Analysis

The goal was to analyse the "shopping basket" of customers, to discover products that were often purchased at the same time. Examining the typology and the sequence in which products or services are usually purchased together, helpful association rules were discovered that help in up-selling or cross-selling activities.

The Results

By merging the demographic data from the fuel loyalty cards with their transactions on the EPOS system, Habaca were able to develop profiles of the various customer types that used a Fareplay outlet, when they used it and what they purchased. A profitability analysis yielded insights into which customers were the most profitable, based on product margins, and the products they were buying. This information can be used to develop specific targeted promotional campaigns and product line selection

Conclusion

Having completed the initial project Michael McCormack explains his vision "Data mining has proved itself to be a powerful tool in driving our decisions. As our customers change, so to must our product offerings, while the initial project was a success, the real value of data mining will be the ability to monitor and adapt our service to deliver a more superior service than our competitors, we are really excited by the opportunities that data mining will give us.