Consumer Insights Unit
Applied Customer Analytics – Principles and Practice
Company Overview
 Founded in 1966; based in Minneapolis, Minnesota
 $50+ billion revenue, Fortune 100 company
 World’s #1 Consumer Electronics retailer
 4000 stores* in Americas, Europe and China
 180,000 Employees
* 2430 Carphone Warehouse stores
Locations
STORE COUNTS
BEST BUY
U.S.
1092
Mexico
5
UK
2
Canada
66
GEEK SQUAD
Stand-Alone Stores
5
BEST BUY MOBILE
Stand-Alone Stores U.S.
Stand-Alone Stores Canada
98
4
FAMILY OF BRANDS
The Carphone Warehouse
2430
Five Star
158
Future Shop
144
Magnolia Audio Video
6
Pacific Sales
35
AudioVisions
3
The CIU Purpose and Mission
We define consumer insights as finished intelligence that drives the business.
What is the value of Consumer Insight?
Consumer Insight is information about consumer behaviors, attitudes
and values which is derived from research, employees, and data
analysis and is directly relevant for the growth of a business
CIU Vision Statement
Providing a clear, relevant,
actionable, measurable, and trusted
view of the consumer to the enterprise
CIU Mission Statement
To ensure locally relevant consumer
insights are generated, shared,
understood, and used in driving
business actions in service of the
consumer and growth of the global
enterprise
What CIU Analytics does
What CIU Analytics does
Happy Customers
CIU Analytics
CIU Analytics as a capability includes…
•
•
•
•
•
•
•
•
Customer segmentation
Purchase path and purchase basket analysis
Descriptive and differential statistics
Predictive modeling
Constrained resource optimization
Test and measurement
Market share measurement
Econometrics
What it takes to provide quality analysis
Translation/
Communication
Analytic Talent
Analytic Tools
Data
Accessibility
Data
Architecture
Hardware
We cannot do analytics on data we don’t have.
Stop Guessing:
Analytics Can Tell You Who Your Customers Are
• Start with 30-40 modeled variables – “Feature Vectors”
• Each feature vector is like a gene, which describes a facet, or set of customer behavior traits
• 8-15 Feature Vectors are used to define Action Clusters, all 40 can be used to create sub-groups
5-dimensional typical segmentation ≈ 16,000 views
12-dimensional Action Clusters
≈ 3,138,000,000,000 views
30 Feature Vectors
≈ 17,400,000,000,000,000,000,000,000,000,000 views
Most segmentation
approaches only focus
here
Preferred
Channel
Preferred
Product
Categories
Time until
Repurchase in Key
Categories
Econometric:
Real-estate &
Unemployment
Annual
Spend Level
Annual
Transactions
Age +
Income +
Geography
Length of Time
as Customer
Recency +
Frequency +
Value
Response to
Media
Breadth of
Categories
Shopped
Return /
Exchange
Behavior
Use of Service
Programs
Use of In-House
Credit Card
Participation in
Loyalty
Program
Case Study on Decision Optimization: Foresight
Customer Strategies
Articulates and Optimally Funds Top Initiatives
Media Types
Computes Optimal Media Effectiveness
Optimize Across Identified
Strategies
Cluster 1
Cluster 2
Cluster 3
Cluster 4
Cluster 5
Optimally Funds Across Action Clusters
Optimize Across Customer
Action Clusters
Cluster 1
Cluster 2
Cluster 3
Cluster 4
Cluster 5
Customer
Cluster 1
Cluster 2
Cluster 3
Cluster 4
Cluster 5
Foresight optimizes resource investment against the Action Cluster portfolio to maximize business
objectives. It includes dimensions of customer strategies (or initiatives), media types and
geography, and is constrained by budgets and policies.
Optimize
Across
Available Media
Allocates Against Policy and Budget Constraints
Bounded By
Budget Constraints
Cluster 1
Cluster 2
Cluster 3
Cluster 4
Cluster 5
Annual Budget
Geography
Allocates to Stores / Regions / DMAs
80,000+ Total Decisions
Optimize
Across
Geographies